Lincoln Crashes

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Ford Motor Co.’s (NYSE: F) Lincoln brand needs to gain on foreign luxury car brands if it wants to get out of a multi-decade slump. Instead, sales are in reverse, and only one of its models has posted impressive sales.

August sales for Lincoln were 8,945, up from 8,708 in the same month last year. The Navigator, the brand’s massive and expensive sport utility vehicle, bolstered the August numbers. Its sales were 1,522, up from 755 in August 2017. Over the course of the first eight months of the year, Lincoln sales were 67,112, down from 73,930 a year ago. Once again, the Navigator saved Lincoln from much worse results. Its sales were 11,828, up from 6,484 in the first eight months of 2017.

Lincoln’s car brand sales have taken a terrible plunge. Through eight months, sales of these vehicles fell from 27,074 to 18,712 over the period. Sales of Lincoln SUVs, with the exception of the Navigator, are also in trouble.

Lincoln relaunched the Navigator, which is a particularly expensive SUV, last year, the 2018 model year. The SUV, with basic options, can sell for over $100,000, which likely makes it a very profitable vehicle.

While Lincoln has suffered, the leaders in the luxury car market have posted mediocre results but with sales well above Lincoln’s. Mercedes-Benz sales were down 6% to 223,651. BMW sales for the period were higher by just 2% to 229,889. So, Lincoln’s sales are short of a third of the two German car companies.

At the end of 2012, Ford renamed its luxury division Lincoln Motor Company with the theory that if the brand had a new identity it might do better. Ford’s then-CEO, Alan Mulally, said at the time:

The new Lincoln brand will be defined by great new luxury vehicles, such as the new MKZ, that feature quality, unique style with substance and innovative technology. These elements, coupled with a new level of warm, personal and surprising experiences, will enable Lincoln to appeal to today’s new luxury customer.

Lincoln has not appealed to new luxury customers and its results show that.