Lincoln dealers work to sell down glut of 2023 models

A glut of late-arriving 2023 models has driven Lincoln Motor Co. inventory levels to among the highest in the industry, prompting the brand to boost incentives and use other strategies to help dealers sell down the remaining backlog.

Lincoln had more than four months' worth of inventory at the end of February, more than any other brand outside of those owned by Stellantis, according to Cox Automotive. About one-third of its unsold vehicles were from the previous model year.

Company data shows that Lincoln's February gross stock of 33,000 vehicles was nearly triple that of a year earlier.

Officials pin the high levels on a confluence of factors, including a continued normalization of supply after years of shortages. A monthslong stop sale on the Aviator for a defective rearview camera system, coupled with a 26-day UAW strike at the Chicago plant where it's built, delayed shipments to dealers until late in the year. A later-than-expected launch for the freshened Corsair over software issues in early 2023 also played a role.

"It was kind of a perfect storm for the factory to have to get through," Chris Poulos, chairman of the Lincoln National Dealer Council, told Automotive News. "We're dealing with it on a day-to-day basis. All in all, yes, inventories are up, but I look at it as an opportunity to get some volume."

Still, some dealers have voiced concerns over the need to more quickly reduce supply, citing concerns over how lingering 2023 models could affect floorplan costs or hurt their ability to market the newest vehicles.

"We're going to do what we need to do to clear out the old models as we need to, and so far it's going well," Lincoln President Dianne Craig said in an interview this month, adding that the focus was on incentives. "The last couple months we've made some really good progress."

Lincoln spent an average of $4,665 per vehicle in the first two months of this year, up 65 percent from January and February 2023, according to Motor Intelligence. Incentives on the Aviator, Nautilus and Navigator have more than doubled from last year, Motor Intelligence said.

Among the deals available to Lincoln buyers, Poulos said, was 0.9 percent interest for 60 months on the 2023 Nautilus and 2.9 percent for 60 months on 2023 Aviators.

Poulos, who owns West Point Lincoln in Houston, said 2023 models accounted for roughly 40 percent of his February sales and that he expected to be sold out of them by the end of May.

Higher incentives and updates to the lineup such the redesigned Nautilus have helped Lincoln start the year with larger sales gains than its luxury rivals.

Lincoln sales rose 29 percent in January and February, compared with a 3.4 percent increase for the premium industry overall, according to GlobalData. The forecasting firm said premium brands' 16.5 percent market share so far this year was at the lowest level in 11 months, though it expects an uptick for the spring selling season.

In addition to offering bigger discounts, Lincoln recently loosened the requirements to move vehicles through its loaner car program, telling dealers that 2023 models put into it by the end of March only have to be used for 20 days or 500 miles, rather than the typical requirements of 6 months or 3,000 miles.

Two Lincoln dealers, who confirmed the program changes to Automotive News, said they are designed to artificially inflate numbers, since retailers can report vehicles sold once they're put into the loaner car program.

"They're just trying to get you to report them sold," said one dealer, who requested anonymity for discussing an internal program. "It's just a way to pad the numbers; it makes your inventory not look as bad as it is."

Poulos, however, disagreed, saying the program changes will help retailers more quickly cycle through the vehicles they have in service and get them to customers.

"It certainly gives me the opportunity to take any loaner incentive I have available to me to market, instead of them sitting there waiting on the clock to run out on them," he said.

Craig said the brand is poised for "significant growth" in 2024 and would continue managing the supply situation in a thoughtful way.

"We've got to be really disciplined on the inventory," Craig said. "Especially as a luxury brand, you've got to be really mindful of when you're putting on incentives because we're watching residual values and it's all connected."