Saving Lincoln

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com/ticker/' rel='ticker'>GM) Cadillac, has successfully resurrected itself and is now a legitimate rival to overseas brands, so much so that Caddy is expanding sales in Europe. Despite the Lincoln Navigator luxury SUV hitting the market first, sales of the Cadillac Escalade, which did a much better job of marketing and design, are more than twice that of Navigator.

Lincoln sales this year are off 3%, with only 108,000 units sold through November. But the sales story is worse than that. The Lincoln Town Car, which is around 80% fleet and the division's biggest seller, sold 36,000. So, retail sales for Lincoln through November were around 80,000. That's less than Infiniti, and just ahead of Audi. Cadillac sold 205,000 through November.

Lincoln has suffered from two destructive forces within Ford. The company's churn of management over the last decade has delayed decisions about product, changed Lincoln's status as a priority brand, and created a mess of the brand's marketing. At the same time Ford was dithering over Lincoln's future, it was buying European brands to, in part, make up for the fact that senior management didn't think Lincoln was a strong enough brand with which to take on Lexus, BMW and Mercedes. Ford bought Jaguar back in 1988, and then added Volvo and Land Rover to the Premier Auto Group in 1999 and 2000. Investments in Volvo, and steep losses in Jaguar and Land Rover, meant that investment in Lincoln was in short supply—as was management's attention.

Jump-Starting the Brand

Reviving Lincoln is all the more vital to the future of Ford's luxury car business, which is ironic, since the future viability of Jaguar and Land Rover is in question as Ford considers selling the brands. "This is the time for Lincoln to start putting results together and get the brand going," says Al Giombetti, president of Ford and Lincoln Mercury. "This is why you see so much effort now to make it more relevant in the marketplace."

Lincoln has been held back by lack of proper or consistent product planning and, some would say, its reliance on the Town Car business. The Town Car has been a cash cow for the company. But its most visible car has not received contemporary design or engineering upgrades. Its engineering platform is shared with the Ford Crown Victoria and Mercury Marquis, and dates back to the early 1970s.

If Lincoln is to come back, it must attract some younger wallets. J.D. Power and Associates (which, like BusinessWeek.com, is a division of The McGraw-Hill Companies (MHP)), says the average age buyer of Lincolns is 55. Excluding fleet and livery purchases, the average Town Car buyer is 68. Even the average age buyer of the Zephyr/MKZ has been about 58. Where Lincoln has done the best with younger buyers is with the Navigator SUV (47) and Lincoln Mark LT luxury pickup truck (46).

Comeback Plans

The Zephyr/MKZ has been the cause of some optimism inside Ford. Like four of Lincoln's offerings, it is a retrimmed Ford, but it has attracted notice for its improved interior. Ford will sell about 33,000 this year, up from the 25,000 for which it planned. Giombetti says the car has attracted a lot of first-time luxury-brand buyers and has pulled equally from American and import buyers. The car's upgraded engine this year, the company hopes, will boost sales by about 15%.

Still, the addition in the next few years of a new, rear-drive flagship sedan or sports car—one that is totally unique to Lincoln—is seen as vital to a legitimate comeback. Says Global Insight's Wolkonowicz, "You can't fix any brand, but especially a luxury brand, on the cheap."

Seeing weakness in Lincoln's livery business, DaimlerChrysler has recently begun building a long-wheel base version of its stylish Chrysler 300C sedan. Even in Detroit, the 300C has been increasingly turning up in airport car fleets. Lincoln figures to build the Town Car until 2011, at which time it hopes to have a replacement for the old airport horse. Still, if there are fewer of the current Town Cars ferrying executives to and fro, it will be easier to get new models into new driveways.

Click here to see the Ford Falcon, Lincoln’s current lineup and a classic 1932 phaeton that epitomized the brand’s original luxury.

David Kiley is a senior correspondent in BusinessWeek's Detroit bureau.