BEIJING Aug 28 Ford Motor Co will launch
its Lincoln brand in China within two years as it races to catch
up with rivals in the world's largest auto market and home to a
growing number of luxury buyers.
The additional investment to launch Lincoln, which Ford did
not disclose, comes on top of around $5 billion that the U.S.
automaker has spent since 2006 in a market where it lags some
way behind General Motors and Volkswagen.
As Ford builds its top-tier nameplate, it is also developing
a low-cost car under the mainstream brand to appeal to more
price-sensitive consumers in the fast-growing cities in western
China. This vehicle will compete with GM's Sail car.
The U.S. automaker, which joins several other companies
looking to expand or launch luxury auto brands in China, is
building its dealership network from scratch and will begin
selling Lincoln vehicles in the second half of 2014.
"The brand in China could be a bright spot for Lincoln
globally," Ford's global marketing chief Jim Farley said during
a Beijing media event on Tuesday. "We have a chance to be
To succeed in China, Ford said it will slowly court dealers
who can help burnish Lincoln's image. Ford is also in the early
stages of reviving the brand's stale image in the United States,
where sales peaked two decades ago.
Ford will launch a refashioned MKZ sedan in the United
States this year in a bid to attract younger, more affluent
buyers. Much of the design, including push-button transmission,
was influenced by Chinese consumer tastes.
"We're trying to revitalize the Lincoln brand image and the
sales and satisfaction image in the U.S.," said Dave Schoch,
Chairman and CEO of Ford Motor China. "Here we have a clean
sheet of paper. We don't have the legacy issues."
Despite slowing growth in new vehicle sales, China has
already overshot the United States as the world's largest auto
market. By 2020, analysts expect luxury sales in the country
will surpass those in the United States.
By 2015, Ford aims to double its production capacity and
dealers in China. Executives, including Chief Executive Alan
Mulally, flew to Ford's manufacturing hub in Chongqing earlier
this week to mark the groundbreaking of a third assembly plant.
But Ford faces considerable challenges in launching its
Lincoln brand. A heavy import tax of at least 25 percent will
eat into margins as Lincoln initially will not build cars in
Competition is also mounting.
Toyota Motor Corp's Lexus, Nissan Motor Co Ltd's
Infiniti and GM's Cadillac are among those looking to
expand in China to appeal to a growing number of luxury buyers.
One prominent dealership operator in China said he sees
"little chance" for the brand to take off the way BMW,
VW's Audi and other German brands have, adding that the brand
would face a better chance if the market was growing at the
torrid pace of 2009 and 2010.
But under current circumstances, "there's just no way I
would take a chance with Lincoln," said the operator, who
declined to be named.