By Keith Naughton
March 30 (Bloomberg) -- Ford Motor Co. plans to expand the Lincoln luxury line by adding a hybrid model based on its top- selling Fusion sedan, two people familiar with the matter said.
The hybrid Lincoln MKZ will be unveiled tomorrow at the New York auto show, said the people, who asked not to be identified because Dearborn, Michigan-based Ford hasn’t announced the details.
Ford’s vision for Lincoln reflects Chief Executive Officer Alan Mulally’s decision to focus on the namesake brand and go without a global luxury marque after agreeing to sell Volvo Cars to Zhejiang Geely Holding Co. this week. The Swedish unit was the last of four such overseas brands unloaded since 2007.
“Our track record operating with global premium brands has not been stellar,” Chief Financial Officer Lewis Booth said last week in an interview. “We are going to continue to focus on Ford and the opportunities to drive revenues on Ford.”
Ford will sell Lincoln only in North America, Booth said. Since arriving in late 2006 from Boeing Co., Mulally has disposed of Jaguar, Land Rover, Aston Martin and Volvo, and stressed rebuilding the reputation, quality and offerings of the Ford brand and the company’s original luxury line, Lincoln.
Ford paid $11.8 billion for Jaguar, Land Rover and Volvo, and the sales prices for those brands totaled $4.2 billion. The company said in 2007 it received $848 million for Aston Martin without disclosing what it paid.
‘House of Brands’
Mulally’s dismantling of what he called Ford’s “house of brands” is a departure from the strategy followed by other automakers, which develop global luxury lineups as a source of profits and prestige.
General Motors Co. reintroduced Cadillac in Europe at the Geneva Motor Show this month and sells the vehicles in Russia and China. Germany’s Volkswagen AG offers Audi cars worldwide, and Japan’s Toyota Motor Corp. has built Lexus into the top- selling premium line in the U.S.
“All of the major players have a global luxury brand,” said Joseph Phillippi, president of AutoTrends Consulting in Short Hills, New Jersey. “There’s a hell of a lot of profit there, five-figure gross profit per vehicle. That’s tough to walk away from.”
Ford is trying to attract younger buyers to Lincoln with a new split-grille design and features such as the Sync voice- activated phone and entertainment system developed with Microsoft Corp. The automaker said it has refreshed 90 percent of Lincoln’s lineup since 2005.
Fusion Roots
All those models are based on Ford cars. The MKZ is the mechanical cousin of the Fusion, for which Ford introduced a hybrid version in 2009. The Fusion hybrid was named the North American Car of the Year at the Detroit auto show in January.
Through February, the Fusion was Ford’s No. 1 car by volume in 2010, according to researcher Autodata Corp. of Woodcliff Lake, New Jersey.
“Ford doesn’t have a true luxury brand anymore,” said John Wolkonowicz, an analyst at IHS Global Insight in Lexington, Massachusetts. “Lincoln doesn’t have a single car to itself that isn’t just a duded-up Ford.”
Lincoln’s performance has lagged behind that of Ford’s namesake brand.
Lincoln’s U.S. sales fell 23 percent last year, exceeding the 14 percent decline for Ford-brand autos, and the luxury division’s 2010 domestic market share was unchanged through February at 0.9 percent, according to Autodata. The Ford brand’s market share jumped to 15.1 percent from 12.1 percent.
After peaking at 231,660 vehicles in 1990, Lincoln’s U.S. sales plunged 64 percent to 82,847 deliveries last year.
Booth said Ford didn’t see a business case for taking Lincoln outside North America, where buyers haven’t embraced U.S. luxury cars, viewing them as too large and not fuel efficient.
“You have to look at the realities,” Booth said.
--Editors: Ed Dufner, John Lear
To contact the reporter on this story: Keith Naughton in New York at Knaughton3@bloomberg.net
To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net;
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