Saturday, November 14, 2009

Ford’s dealership consolidation strategy hits stand-alone Lincoln-Mercury dealerships

Ford CEO Alan Mulally was asked recently by Automotive News about how its current strategy of promoting the combo Ford-Lincoln-Mercury retailers over the stand-alone Lincoln-Mercury stores has fared so far after the changes were made starting 2006.

Mulally said that he would not confirm whether the plan had the desired result. All he would say is that Ford is focused on building a distribution network that allowed sales volume, product breadth, and profitability – qualities that he says are apparently better served by the Ford-Lincoln-Mercury store.

In 2006, Ford wanted to effectively align its distribution network and so it started to shrink its dealership network. In 2009, the stand-alone Lincoln-Mercury dealerships took a beating with only 357 left at the start of 2009 from the 619 dealerships only a few years ago.

Mulally explained that although these combo dealerships will be selling both the Lincoln MKS and the Ford Taurus (both vehicles share platforms and mechanicals), retailers will learn how to deliver the sales experience that fits the vehicle and differentiates the brand.