Ford to Reduce Lincoln Dealers in U.S. Metro Markets by 25%

Ford Motor Co. plans to reduce the number of its Lincoln dealerships in the biggest U.S. metropolitan markets by 25 percent.

Ford wants 325 Lincoln dealerships in those markets, from 434 outlets at the end of last year, Ken Czubay, vice president of U.S. sales, service and marketing, told reporters today at the National Automobile Dealers Association convention in San Francisco.

Ford, the world’s most profitable automaker last year, is paring its dealer count in the biggest U.S. markets to close the gap in sales volume per store with competitors such as Toyota Motor Corp.’s Lexus. The cuts are intended to discourage neighboring dealers from lowering prices and shaving margins to compete.

If dealer deliveries per store don’t improve, “then the transformation of Lincoln is going to need a different plan,” Jim Farley, Ford’s global marketing chief, told reporters today.

Lincoln will have six new or refreshed models in the next three years, the company said today.

Chief Executive Officer Alan Mulally has sold the Volvo, Aston Martin, Jaguar and Land Rover to focus on Lincoln as the Dearborn, Michigan-based automaker’s only luxury brand. Lincoln sales have plunged almost two thirds from their 1990 peak, to 85,828 deliveries last year, according to Autodata Corp. in Woodcliff Lake, New Jersey.

Ford met with Lincoln dealers in October to tell them how much they must spend to renovate their showrooms and improve customer service, Czubay and Farley said, without elaborating. The renovations could cost as much as $2 million per showroom, dealers said in October.

Since Ford began consolidating dealers in 2005, it has cut its retail outlets by 22 percent from almost 4,400, Steve Kinkade, a company spokesman, said last week in an e-mail. Ford deliveries in 2010 rose 17 percent, exceeding the industrywide gain of 11 percent.

To contact the reporter on this story: Craig Trudell in San Francisco, at ctrudell1@bloomberg.net.

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net.

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