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UPDATE 1-Chinese approach to luxury shapes Ford Lincoln overhaul
January 15, 2013 / 12:15 AM / in 5 years

UPDATE 1-Chinese approach to luxury shapes Ford Lincoln overhaul

By Deepa Seetharaman

DETROIT, Jan 14 (Reuters) - Ford Motor Co could alter its Lincoln brand lineup to suit consumer tastes in China, where the No. 2 U.S. automaker will launch Lincoln in 2014 in a bid to boost sales of the luxury nameplate and attract younger, more affluent buyers.

China’s demand for luxury cars is expected to exceed that of the U.S. auto market by 2020. There are many parallels in the tastes of both markets, but consumers in China favor wider headlights, more symmetrical design and a larger backseat.

“The ‘face’ is very important to the vehicle to the Chinese,” Joe Hinrichs, Ford’s former head of Asian and African operations, said on Monday. “It’s very important that the face not have negativity, not have a scowl or a frown.”

The design changes for China illustrates Ford’s changing approach to a region that represents Lincoln’s best chance to reinvent itself. It also shows how much China and its growing number of luxury buyers are shaping the brand’s overhaul.

On Monday, Ford showed a concept version of its Lincoln MKC crossover during a media preview of the Detroit auto show. The MKC will compete in one of the fastest growing segments in the U.S. and Chinese auto markets.

Ford is betting that a strong showing in the burgeoning crossover segment may stem Lincoln’s two-decade sales decline. The MKC is the second of four core models that Lincoln will pitch to a growing group of buyers who appreciate warmth and “discreet luxury” and avoid overt symbols of wealth.

Ford declined to detail how much it is investing in Lincoln, but Chief Financial Officer Bob Shanks said the brand is profitable. Shanks said he expects the brand to remain profitable even as Lincoln adds models and expands in China.

“We’re not talking about a fixer-upper here,” Shanks said of Lincoln. “This is a business that is healthy from a financial point of view. With the appropriate care and nurturing in terms of investments, products, brand and network, I think we can turn into a great business.”

The average Lincoln buyer is 65 years old. Ford wants to lower that to 57 and raise the target average income by more than 50 percent to nearly $160,000 a year.

The introduction of the Lincoln brand is part of Ford’s overall strategy in the world’s largest auto market, which includes the development of a value car for growing group of newly enriched buyers in China’s inland cities.

Crossovers are attractive in China partly because it suggests that the driver has an active lifestyle that is increasingly alluring for the Chinese consumer, Hau Thai-Tang, Ford’s head of global engineering, said in an interview.

At the same time, luxury buyers in China are very cautious not to look too flashy, especially to business clients, Thai-Tang said. Driving a vehicle that looks too expensive could convey the impression that the owner is charging too much.

The Chinese attitude toward luxury is partly why Ford is refashioning Lincoln as a warmer, more stately brand.

“The styling direction that we’re going with ... it’s elegant, not in your face,” said Hinrichs, who now runs Ford’s operations in North and South America. “We know from our research that there’s a number of Chinese who that fits very nicely with.”

Our Standards:The Thomson Reuters Trust Principles.
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