Breaking News

Nomura, MUFJ-MS, Goldman, JPMorgan to Lead Japan Post IPO
Tweet TWEET

Lincoln’s Sales Fall to Reagan-Era Level on MKZ Sedan Shortage

Ford Motor Co. (F)’s Lincoln sales fell to a 32-year low in the U.S. last month as dealers ran short of the MKZ sedan that the automaker expects to lead the luxury brand’s revival.

Lincoln, which will air its first Super Bowl ads Feb. 3, sold 4,191 cars and sport-utility vehicles in January, an 18 percent drop from a year earlier. That was the fewest since the brand posted 3,506 sales in July 1981, according to Southfield, Michigan-based researcher Ward’s Auto.

The restyled MKZ, with a chrome grille inspired by an eagle’s wings, is the first of four new models Lincoln has coming in the next four years as Ford spends $1 billion to turn the brand around. The MKZ is arriving in showrooms slowly because of a more rigorous quality inspection following multiple recalls on models Ford introduced last year, Ken Czubay, the Dearborn, Michigan-based company’s U.S. sales chief, said today.

“It’s an uphill battle for Lincoln,” said Jesse Toprak, an analyst at researcher TrueCar.com in Santa Monica, California. “The reason people buy luxury brand vehicles is the image. Lincoln’s image is not up to par.”

Lincoln’s January sales were the lowest for any month since the first year Ronald Reagan served as U.S. president. The brand is still remembered mostly for the Town Car, which has been an airport shuttle for generations of business travelers. Ford stopped building the Town Car last year.

In one of the commercials debuting during the Super Bowl, Lincoln immolates a Town Car and transforms it into an MKZ. The MKZ also is featured in the other Super Bowl ad, produced by comedian Jimmy Fallon, which is scheduled to air in the game’s third quarter.

Record ‘Pre-Orders’

The MKZ has the largest number of “pre-orders” in the brand’s history, Czubay told analysts and reporters on a conference call. Dealers haven’t been able to fulfill those orders because of the deliberate quality checks Ford is making to the new model, he said.

“We recognize that this is slowing our shipment of MKZs to our dealers and customers, but this is the right action to take for our reinvented Lincoln brand,” Czubay said.

Chief Executive Officer Alan Mulally made quality a cornerstone of his turnaround plan for Ford. That effort has stumbled as the automaker has plunged in quality rankings from researcher J.D. Power & Associates and Consumer Reports magazine. The restyled 2013 Escape, Ford’s top-selling SUV, has been recalled four times since it was introduced in May. The revamped Fusion has had two recalls since its October debut.

Lincoln ranked 19th in Consumer Reports’ 2013 auto-brand perception survey, released this week, behind Daimler AG (DAI)’s Mercedes-Benz, General Motors Co. (GM)’s Cadillac, Bayerische Motoren Werke AG (BMW)’s BMW, Toyota Motor Corp. (7203)’s Lexus, Volkswagen AG (VOW)’s Audi and GM’s Buick.

1990 Peak

Mulally is trying to revive Lincoln to get a larger slice of the market for luxury vehicles, which produce higher profits than lower-priced models. Lincoln’s U.S. sales have fallen 65 percent since peaking in 1990 at 231,660.

Last year, Lincoln sold 82,150 vehicles. BMW was the top- selling luxury-auto brand in the U.S. in 2012, at 281,460.

“The product Lincoln has today is the best they’ve had, from any angle,” Toprak said. “But it’s going to be a long process to change the brand’s image. It’s going to take probably a good decade.”

To contact the reporters on this story: Keith Naughton in Southfield, Michigan, at knaughton3@bloomberg.net; Craig Trudell in Southfield, Michigan at ctrudell1@bloomberg.net

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.