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 Lincoln, a storied Detroit brand which Ford has owned since 1922,
has been in a swoon for the past two decades, leaving dealers and
customers wondering if Ford management had left the brand for dead.
Now, with the renewed backing of Executive Chairman Bill Ford and
the company's board, Fields has committed the automaker to a
multiyear, multibillion-dollar overhaul of Lincoln that includes a
significant investment in a new premium vehicle platform that will
underpin several future Lincoln vehicles, four sources told Reuters.
Ford could spend $5 billion or more over the next five years to
revive Lincoln, revamp its product portfolio and reposition it as a
true competitor to such global luxury leaders as Daimler AG's
<DAIGn.DE> Mercedes-Benz and BMW AG <BMWG.DE>, the sources said.
Details of the new platform and the size and scope of the investment
have not previously been reported.
"It's really important for us to have a relevant and vibrant luxury
brand," Fields told Reuters on Friday. "You need to make the
investment and build this brand over time."
He declined to discuss details about Ford's spending and product
plans.
Fields said Ford is looking at the Lincoln rebuilding effort "in
terms of generations of products," an effort that will stretch well
into the next decade.
Ford executives said last month that the immediate goal of the
latest Lincoln turnaround effort is to triple the brand's global
sales to 300,000 vehicles by 2020.
Several industry analysts have challenged that mark as overly
optimistic, as have some former Ford executives who spoke with
Reuters on condition of anonymity.
A longer-range target is to restore Lincoln's luster as a premium
automotive marque in the United States and build it into a
formidable competitor in China, where Ford is just now launching the
brand years after most of its global luxury rivals entered the China
market. On Friday, Ford delivered its first Lincoln in China, an MKZ
sedan.
The springboard for the Lincoln revival plan is a new family of
vehicles that will be built on a highly flexible premium platform
that can be configured for front-, rear- and all-wheel-drive
vehicles, according to industry sources familiar with Ford's plans.
That is a critical element that has been lacking in several
previous, under-financed attempts to resuscitate the brand. Versions
of the platform will be used by both the Lincoln and Ford brands,
the sources said.
Former CEO Mulally, who stepped down in July, declined to make more
than a nominal investment in Lincoln - and even considered selling
or closing the brand, according to two sources.
But his successor, Fields, has directed his management team to try
to reverse a long-term U.S. sales skid that has seen Lincoln sink
from the No. 1 spot in 1998 to eighth place among luxury brands,
with about half the sales of General Motors Co's <GM.N> Cadillac and
one-quarter the sales of segment leader Mercedes. Last year, Lincoln
sales were 81,694, less than half of the 187,121 cars it sold in
1998.
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FLEXIBLE DESIGN
The revival effort is backed by the first significant investment in
Lincoln in years, one that will see every product redesigned or
replaced over the next five years.
Ford already has spent about $2 billion on Lincoln in the past two
years, according to one source, about half of that to prepare for
the brand's introduction this week in China and half to update and
expand its product stable to tide Lincoln over until the new family
of vehicles is ready toward the end of the decade.
Ford has said in some years it spent only $500 million or less on
Lincoln. In September, the automaker told investors it plans to
spend more than $2.5 billion through 2019 on Lincoln product
development, facilities and tooling.
But that figure does not include spending on engineering,
advertising and other sales-related expenses for Lincoln, Chief
Financial Officer Bob Shanks told Reuters on Friday.
Much of the new investment is earmarked for development and tooling
of the new premium platform, known internally as D6, sources said.
The development is being overseen by new Lincoln President Kumar
Galhotra, an engineer.
The flexible architecture of the D6 will provide the mechanical base
for a wide variety of sedans and crossovers starting in 2019, all
designed to give Lincoln more differentiation from its Ford-branded
siblings, as well as a stronger foundation on which to build more
competitive luxury models to pit against the sector leaders.
Before the first of the new D6-based models arrive, Lincoln will
update most of its existing products, starting with a redesigned MKX
midsize crossover in spring 2015 and a replacement for the MKS large
sedan in spring 2016, sources said. The latter model will include a
long-wheelbase version with more room inside for Chinese customers,
Galhotra said.
The Navigator fullsize utility vehicle is slated for an extensive
overhaul in autumn 2017, according to sources, when it will share a
version of the new Ford F-150 chassis and will get aluminum body
panels.
A redesign of the compact MKC crossover is tentatively scheduled in
autumn 2018, the sources said.
The first of the all-new D6 models, due in 2019, are a midsize sedan
that could replace the MKZ and a large seven-passenger crossover
that could replace the MKT, sources said. Both new models are
expected to be offered in front- and all-wheel-drive versions.
(Editing by Eric Effron and Matthew Lewis)
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