Lincoln's New Luxury Crossover

Making its debut in Detroit, the new MKT crossover concept aims to turn Lincoln passengers into Lincoln drivers

By David Kiley

SPECIAL REPORT

Detroit Auto Show 2008

• Detroit '08: Green Tech and Road Candy
• Video: Detroit Auto Show Picks and Pans
• GM Takes a Stake in Ethanol Maker
• Ford and Dodge's Big Bets on Big Trucks
• The Auto Industry's Second-Biggest Fear
• Lincoln's New Luxury Crossover
• Ford's Explorer, Back from the Dead
• Fear and Loathing and Green Tech in Detroit
• Slide Show: Highlights of 2008 Detroit Auto Show

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Alex Richardson is a successful Manhattan real estate broker. He estimates he rides in the backseat of a Lincoln Town Car at least 10 times a week courtesy of his firm's car service. All that seat time in a Lincoln, though, hasn't made the 49-year-old Connecticut resident curious about being a Lincoln owner. "The backseat is fine, but, no, I can't see myself driving a Lincoln."

Richardson is the key to Ford Motor's (F) problem with its venerable Lincoln brand. Ford has neglected Lincoln for most of the last two decades as it has plowed resources into buying and then propping up Jaguar, Land Rover, Aston Martin, and Volvo. Aston was sold last year, though, and Jaguar and Land Rover are about to go to Indian carmaker Tata Motors (TTM). That leaves Ford with Volvo and Lincoln as the remaining pieces of its premium and luxury car strategy.

New Life for Lincoln

At this week's North American International Auto Show (BusinessWeek.com, 1/10/08), Ford plans to show a concept car, the MKT, which it hopes to launch in the next 24 to 36 months to attract the eyes and wallets of car buyers like Richardson. This fall, Ford will launch the MKS, a sedan it is hailing as its new flagship. And it has plans under way to launch a rear-drive sedan to replace the Town Car, as well as a rear-drive sports car that Ford executives and analysts believe is necessary to attract the same kind of customer consideration that goes to General Motors' (GM) Cadillac and German brands such as Mercedes-Benz (DAI).

"Lincoln has been very neglected and has had inconsistent products for too many years," says Ford Americas President Mark Fields. Fields points to a lack of focus and resources going into Lincoln as Ford, besides starving it of investment, also switched management of Lincoln for a time from Detroit to California, where Ford's European brands were managed, and then back to Detroit.

Even so, Ford did better than expected in 2007 with the new Lincolns it has launched in the last 18 months. Ford sold 131,000 Lincolns, up 9.1% from 2006. Lincoln passenger car sales were down 25% because it discontinued the LS sedan and interrupted production of the Town Car as it switches manufacturing of the car from one plant to another. But it sold 34,000 MKZ sedans, and truck/SUV sales were up 75% on the strength of the MKX crossover SUV, which has been well received by car reviewers long used to overlooking Lincolns.

Mere "Badge Engineering"

But the MKZ and MKX are not going to turn enough heads to make Lincoln challenge Cadillac again, let alone Lexus (TM) or Mercedes. The MKZ is mechanically the same car as the Ford Fusion, and shares a common silhouette. The MKX is mechanically the same as the Ford Edge SUV. This practice of selling the same car under different brands, but with different features, colors, and trim is known as "badge engineering." "If Lincoln is going to be taken seriously by luxury car buyers, it is going to have to come up with its own unique designs," says independent marketing consultant Dennis Keene.