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Ford Lincoln entering China’s luxury market

MKZs will be made in North America.


August 28, 2012
by CANADIAN PRESS

BEIJING — Ford Motor Co., eager to grab a piece of China’s growing luxury market, plans to start selling its Lincoln luxury brand here in 2014.

It will be the first time that the nearly 100-year-old brand will be sold in China. At an event at a converted 600-year-old temple in Beijing, CEO Alan Mulally and other Ford executives said they believe Chinese customers will appreciate Lincoln’s heritage as well as its new line-up of vehicles. Ford is introducing seven new Lincolns over the next three years.

The announcement was a surprise for Ford, which had previously said it wanted to re-establish the struggling brand’s reputation in North America before taking it abroad. Lincoln was the bestselling luxury brand in the US two decades ago but gradually fell to last place in the market because Ford failed to invest in new products.

But Mulally said Ford has been quietly plotting to bring Lincoln to China for the last two years, and considered Chinese customers’ tastes when it was designing the 2013 MKZ. The midsize MKZ, which goes on sale this fall in the US, is the first of Lincoln’s revamped products.

“This is the perfect time, with the vehicles that we have here,” Mulally said.
The Lincolns sold in China will be made in North America, at least initially.

The MKZ will be made at Ford’s Hermosillo Stamping and Assembly Plant in Mexico. Ford’s Oakville, Ont. plant makes the Lincoln MKX and MKT crossover SUVs for the North American market, as well as the Flex and Edge.

Dave Schoch, chairman and CEO of Ford China, said the company will consider making Lincolns in China if sales demand it.

Schoch wouldn’t say how much Lincolns will cost in China, but they will be more expensive than in the U.S. because of luxury taxes, which are based on engine size, and import duties of 25%. The 2013 MKZ starts at $35,925.

Ford will start meeting with interested dealers in China this fall.

Luxury cars now make up 6% of Chinese sales, but they’re expected to rise to 10% by the end of this decade, said Ford’s global marketing chief Jim Farley. That’s comparable to the US, where luxury sales now make up around 12% of the market.

German luxury brands Audi, BMW and Mercedes-Benz were the top-selling luxury brands in China in the first six months of this year. German brands control about 80% of China’s luxury market, independent auto analyst Michael Dunne said.