Lincoln Motor Co. dealers entered 2021 offering the fewest vehicles in years.
After discontinuing the MKZ and Continental sedans in 2020, the luxury brand builds just four nameplates: the Navigator, Aviator, Nautilus and Corsair. Sales tumbled 6.1 percent in 2020 to 105,410.
But even in the midst of a pandemic, profitability is up and dealers are pleased with the mix of models that they say are both attracting new customers and winning over former Lincoln sedan buyers.
Bill Dawes, chairman of the Lincoln National Dealer Council, is pleased with changes to the brand but is eager to know how executives plan to continue growing.
Dawes, 56, owner of the Bob-Boyd Auto Family, which includes a Lincoln store in Columbus, Ohio, spoke with Staff Reporter Michael Martinez. Here are edited excerpts.
Q: How was 2020 for Lincoln dealers?
A: It was a wild year with COVID. A lot of early consternation, a lot of ups and downs, especially early in the year. As the year progressed it became stronger and stronger for Lincoln dealers. Our profits were up, our volume was up. We were fortunate and I think we all know that. We got through a very difficult stretch with a lot of help from the company and went on to have a very, very solid year with growth and profitability.
Were you pleased with Lincoln's response to the pandemic?
We were more than happy. Bill Ford got out in front of a lot of it with the Ford name and what they were going to do to help the country, but then their response to the dealers on the Lincoln side was fantastic. They did, financially, they paused the Lincoln Commitment Program which allowed dealers to earn margin despite sales in the early months. Lincoln Automotive Financial Services provided great financial support; they did loan deferrals, floorplan assistance.
I think what's very notable is that the company had its own challenges: production, supplier issues, taking care of their employees and running their business. Yet they were very willing to listen to us and bounce ideas of how the dealers could be greatly taken care of in those early months. They listened and responded. I think their support was fantastic.
How was communication between the dealer council and management in the early days of the coronavirus pandemic?
I don't want to say daily, because it probably wasn't, but it seems like it. A lot of calls, a lot of Zooms. We wanted to talk to them and they wanted to hear from us. We worked very well together. They were always there, willing to listen to our ideas and suggestions and implement them where they could.
The brand recently implemented the Lincoln Commitment Program which includes new physical storefronts. How did the program change once the pandemic hit?
Early on Lincoln was very flexible when it came to LCP requirements and the uncertainty. They treated dealers individually.
As we go forward, they've listened about dealers' concerns with a one-size-fits-all facility and they're very willing to talk to dealers about different shapes and sizes where it's necessary.
When they get to that facility, clients still want to be met in a very warm, human, personal way. The facility piece is still an important part of what a luxury client's expectations are.
Lincoln is listening, they are working with dealers on individual levels, there is back and forth that goes on. I think they've done a good job recognizing obstacles dealers might have during this time.
You said dealer profitability rose in 2020. Why?
There's no question it's the mix of vehicles. Our higher-end vehicles — the Navigator, the Aviator — are selling very well. Nautilus and Corsair and both selling well in strong segments. That helps a lot. Used vehicles across the board have done well. That all leads to higher profits. For Lincoln dealers, sales were up, share was up and dealer profits were up. Those were all parts of why.
Lincoln discontinued the MKZ and Continental sedans last year. Was that the right decision?
A dealer will never tell you a decision to discontinue a model is always the best decision. But, as you look at full-size sedans and sedans in general, especially on the luxury side, the declines speak for themselves. The MKZ was a very good product for us. The Continental was a terrific name that I personally hope one day they'll continue to keep it there and maybe come back and use it.
Now the job is to allow us to move those sedan clients into our lineup of SUVs. A lot of clients like the flexibility of an SUV, the way it rides and the things it allows them to do. We just have to be at the forefront of recognizing that we can't lose these clients forever. We have to find a way to keep them in the fold. That's a big job we're going to work on the next several years.
Are those sedan customers opting for any particular model?
In our lineup, the Corsair and Nautilus are going to be the ones that bring the majority of the sedan clients over.
What are your inventory levels like?
I think Lincoln's been doing a good job. Obviously every manufacturer had a lot of supply and plant issues early on, but I think Lincoln has done a good job keeping the vehicles we need to sell, the higher-end models, in dealer hands. Right now we have an excellent flow of vehicles.
How have CPO sales been? Would you like to see any changes to Lincoln's CPO program?
That's one of the priorities for council in '21. CPO sales are good. The CPO program is about 10 years old. We've asked the company to go back and let's work together and evaluate it and find ways to expand it, grow it and make it the best in the luxury space. We haven't done a lot to it in 10 years, but it's been a good program. We have to work on it now in the near term to make it stronger.
When you talk about CPO, there's a lot you can put into them — different warranties, different start dates, different opportunities to certify a vehicle. There's a lot of things we can do. One of the most important is get the message out there. The value story comes with more people having knowledge of the program. Share of voice is important. It doesn't have to be traditional; it can be through digital or social media, but we have to get a stronger share of voice in 2021.
Are there any lingering effects from the rough launch of the Aviator?
Aviator sales are doing extremely well. It's a great vehicle. They did have issues but they addressed those. They're putting in new processes. They're very upfront with the dealer council on what the processes are and the steps they're taking. It's a world-class vehicle. It's brought in clients that Lincoln dealers haven't seen before, so we have to make sure the quality is where it needs to be to be. There's no doubt in our mind that they're completely focused on that and it's top priority.
What's the biggest challenge for Lincoln dealers this year?
I think there's a lot of uncertainty still around COVID. There's a lot of uncertainty period. But we have to make sure we have a strong share of voice, we have a message out there that resonates with the luxury clients. There are so many people today that are giving Lincoln consideration. We have to be there where they are, whether it be in the showroom, on traditional advertising, social media, digital space. And we have to become better and better at that. We have products that people want to see, they want to try out. And we have to do that at their convenience and wow them with the Lincoln brand.
Is Lincoln adequately preparing dealers for changes such as electrification and autonomy?
I think the world's changing and the luxury clients' expectations are what they are. They demand the change that has to happen in our industry. We have to be there to continue to meet those expectations. I would say we need to continue to work through our transparency in the near term in terms of a product lineup. And what we're going to need to have as dealers with that new product lineup, because it's coming. That's where we have to be. That's what the clients expect.
Ford Motor Co. is choosing to put its hands-free driver-assist system on Ford models first, a departure from other brands. Are you concerned it's not debuting on a Lincoln?
I wouldn't say I'm concerned. The product cycle was the product cycle and those vehicles, which are going to be fantastic for the Ford Motor Co., were coming out. The Lincoln vehicles that are behind them I'm sure will have the technology and abilities they have. Would we like to have it on the vehicles we have today? Sure. But those things are done years in advance. I think it was more of a timing issue and not that they don't want to put it on their luxury brand. They'll have it on their luxury brand sooner rather than later.
If you could ask Lincoln for one thing in 2021, what would it be?
There's probably two things. The first is transparency. We've talked about it over the last 12 months. This year things have probably been delayed in certain areas, whatever they may be, in our industry. We want to have real transparency on the next several years of Lincoln product. We have great discussions on it and I think it's something that will happen. Second, we want to continue to try and grow our share. Despite only having four product lines, they compete in the high-growth segments of the luxury industry. They can compete. We have to continue to drive the Lincoln message and all the client experiences we can provide as well as world-class vehicles. 2021 is going to be another really solid year.
What are your thoughts on Jim Farley as CEO?
We're excited about what he's done. Jim has been a part of Lincoln since he came to Ford Motor Co. He's been a big part and has held many roles. As has Kumar Galhotra. When you have such key people with such a strong Lincoln background, the Lincoln dealers are really excited about that.
Lincoln President Joy Falotico recently dropped her chief marketing officer title to focus solely on Lincoln. Was that a good decision?
I really believe they would not have done that if they didn't believe Lincoln had great potential for the company. Us having Joy all to ourselves will only help the Lincoln brand and the growth. The dealers are very excited.
What's the most important product in the lineup?
When you have four, they're all very important. And they all have to hold their own. The Aviator is a very important product, and I'd personally say it's the most important. It's a world-class product and it's in a growing segment. It brings in a client that's new to Lincoln dealers and brings in trades that are new.
What's been the reaction to the Aviator plug-in hybrid?
The Aviator GT is bringing in a completely new client. It's really been a very good vehicle for us. A lot of dealers have asked for more marketing on the vehicle to let the clients know about what a performance vehicle it is. A lot of dealers are doing that on their own and having success with it. It's a rocket ship.
Would you like to see any changes to Lincoln's marketing strategy?
It's one of the key priorities. We continue to ask to improve share of voice to get the message out. We think we can work together with the company to improve that. As a dealer you never have enough share of voice. We need to improve it, even if it's through nontraditional means.