Lincoln Turns to Luxury Markets

Lincoln executives were brought to their senses, as Ford's luxury brand will give dealerships in metropolitan areas the majority of the Lincoln production. The statement given by Ken Czubay, Ford's vice president of U.S. vehicle sales, service and marketing, saying that about 85 percent of Lincoln's inventory will be allocated to dealers in the top 130 U.S. markets, upset dealers in rural areas.

The new allocation plan, expected next year for the 2012 model, is part of Lincoln's strategy to reduce its list of dealerships and push remaining dealers to invest in operations and improve customer service.

One rural Lincoln dealer, who chose to remain anonymous, said executives "told us 88 percent of all Lincoln production will go to the dealers in the top 130 markets, and 12 percent goes to the rural markets. So if 500 of us stick around, 12 percent of that production won't feed us."

"We're worried if we choose to stay, we won't be able to get any Lincoln products."

About half of Lincoln's 1,200 dealerships are placed in small markets, said Lincoln spokesman Christian Bokich.

During the LA auto show, Czubay said that Ford is working with small dealers to help them decide if they can afford to stay in the business. That's just another way of saying that Lincoln now aims toward a different social class and their products have no business being sold in rural markets.

"The reason all of the competitors concentrate their business on the top 130 markets is because that's where the luxury market is," he said.

"There will be some flexibility, but clearly what we discussed with the dealers is that when you look at the top 130 markets, that's where the luxury business is. So it's very important for us to have production for those markets so they are able to participate from a market share standpoint," said Mark Fields, Ford's president of the Americas.

Lincoln wants to reduce about 200 dealerships in the top 130 markets to improve per-store sales. It will seek to close stores in other markets, too.
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