Ford Motor Company’s relaunch of its luxury Lincoln brand involves checking all the right boxes – including re-branding the “company” to perceptually separate it from Ford, a new look/feel/message and campaign, dealer-level education and communications for the luxury consumer, etc.
But in such an emotional and textured category, this will never be a brand management 101 exercise. The question of how well it will work will come down to a host of factors including the vehicles themselves as well as macroeconomic conditions impacting the consumer market.
One additional – and we think dominant – consideration is how willing the American consumer is to buy into American-made luxury in the automotive category. As quality concerns and financial/labor issues stifled the “Big 3” US automakers throughout the 1990s and last decade, American car companies earned a shrinking share of the luxury vehicle market.
At the end of 2011, this rolled up market share is just around 25% – and lower if we remove certain popular SUV models in the marketplace under the Cadillac and Buick brand names. German and Japanese automakers earned a far larger piece and marketing efforts reflect this leadership – witness Audi’s aggressive positioning against its fellow German brands BMW and Mercedes-Benz.
Country of origin plays a lot of different ways in consumer markets, and there are several reasons why we feel Lincoln may face a challenge greater than Lincoln itself:
- In many consumer categories, being made in America is a detriment at the upper end of the price register. From timepieces to fashion to some classes of electronics and appliances, imported brands have greater associations with technology, quality and style – while American offerings tend to fall more into the hardworking, value range. This has certainly been the case in automotive.
- The rebirth of the American auto industry has largely been accomplished via moderately priced, fuel-efficient small cars as well as continued strength in trucks and SUVs. While Cadillac, in particular, has modernized its image, it has been quite a while since an American automaker has made a major successful play in the luxury sedan space. In this vacuum, consumers have learned to look beyond our shores to build brand loyalty.
- The import brands that have emerged – a mix of established players in a modern package (BMW, MB) and luxury upstarts (Lexus, Infiniti, Acura) – represent a formidable competitive set that have already largely repelled well-financed competitors such as Saab (owned by GM from 2000-10) and Jaguar (owned by Ford from 1989-2008).
- With BMW plants across the southern United States and Chrysler’s Italian ownership (just two examples), the foreign v. domestic argument does not pack the punch it formerly did for those who place a high premium on “economic patriotism.” Further, this is a slice of the category in which such attitudes have not been prevalent except among the WWII generation.
These conditions and others suggest that Lincoln not only has to make itself relevant again, but do so while facing the headwinds that challenge purveyors of American luxury. Perhaps, in these categories, it is not Lincoln that needs rebranding, but America itself.