Sales of cars by Ford Motor Co.’s (NYSE: F) troubled Lincoln division are set to rise this year. Despite its troubles, it is not being driven out of the luxury market. As a matter of fact, it should make more gains next year.
Lincoln sales rose 6.6% in the first 11 months of this year to 90,367. The increase was driven by the MKC model, which posted an improvement of 104.6% for the period to 22,024.
Lincoln’s gamble is that its new MKZ can do extremely well. It competes at the low end of the luxury market, were leaders BMW and Mercedes have done particularly well. The MKZ’s introductory price point is $35,190. Lincoln will launch a new version that will be available next year.
Lincoln’s other large gamble is a low-end crossover, the MKC. With a base price of $33,260, Lincoln again has given itself a chance to compete with the German leaders. It recently got high grades from car research firm Kelley Blue Book.
Lincoln is still up against the hurdles is has faced for years: It is a car for older drivers, those over 60. At the same time, younger luxury drivers are drawn to German, and even Japanese, competitors.
Lincoln sales are a tiny part of Ford’s sales, which are led by its F-150 pickup. Lincoln may not contribute much revenue or any profits to the U.S. manufacturer for years. However, Ford understands that almost no major car companies in the world lack a luxury division. Lincoln may exist for decades. The impossible question to answer is whether it can move to the middle of that pack based on sales, or will it stay in the bottom tier. Sales for 2016 are encouraging.
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