Lincoln Announces Prices For Dealer Renovations

[William Maley]

Lincoln Announces Prices For Dealer Renovations

William Maley - Editor/Reporter - CheersandGears.com

June 13, 2011

Lincoln invited 120 dealers to a meeting in Detroit last week to talk about the future of the brand. Part of the meeting dealt with renovations for Lincoln dealerships. According to Ford CEO Alan Mulally, a standalone Lincoln dealer can expect to pay $1 million for renovations while a Ford-Lincoln dealer can expect to pay around $1.9 million. Dealers who decide not to take part in the renovations can expect their Lincoln franchise taken by Ford in exchange for money. This is Ford's way of cutting down Lincoln dealers from 500 last October to a goal of 325 dealers.

A dealer who attended the meeting said,

"Every dealer is different and has different levels of renovation. That's a ballpark average of what has to be done out there."

Dealers who decide to begin remodel must begin by the end of 2011 and be finished by 2013 said Mulally. The reason being is the redesigned MKZ sedan and a small crossover will be released around that time.

Source: Automotive News - Subscription Required

[SAmadei]

Assuming Lincoln sales stay at about 80,000, those remaining 325 dealerships spending $1 mill each will need to pass on $4000 per Lincoln sold in 2012. Thats before the dealerships even start paying salaries and the electric bill.

Not a good time to be a Lincoln dealer. Its as if they want Lincoln to just fail now, before any effort is put into it to save it.

[smk4565]

Seems that way, but those investments can be done with a 10-15 year loan and probably depreciated over 7 years for tax savings. So it isn't like the dealers have to put all that up front, but it does seem like Ford wants to weed out more dealers. The problem with this plan is that Lincoln's product line is so lame, it isn't going to attract people to the dealership in the first place.

[SAmadei]

Seems that way, but those investments can be done with a 10-15 year loan and probably depreciated over 7 years for tax savings. So it isn't like the dealers have to put all that up front, but it does seem like Ford wants to weed out more dealers. The problem with this plan is that Lincoln's product line is so lame, it isn't going to attract people to the dealership in the first place.

True... however, you need a convincing business plan to get loans... Lincoln is not helping that situation for it's dealers.