By Alex Taylor III
August 3, 2010

CEO Alan Mulally’s One Ford strategy has been a big hit so far, and Ford’s recovery from the 2008-2009 recession has outpaced its competitors. But Mulally has missed out on a sizeable chunk of global business this year, and that is the boom in luxury car sales.

Led by China, affluent buyers in many parts of the world are pouring back into the market, with Mercedes-Benz, BMW, and Audi the big beneficiaries.

Mulally had ordered the sale of Aston Martin, Jaguar, Land Rover, and Volvo shortly after his arrival so the company could focus its resources on the Ford brand. That left the company with just one entry in the high-margin luxury segment: Lincoln.

His choice was interesting, since Lincoln has suffered from a lack of investment and imagination for nearly a decade. In 1999, the company made an abortive effort under former BMW executive Wolfgang Reitzle to redefine the brand and provide it with exclusive platforms, but the initiative fizzled after the economy tanked the following year.

Today, Lincoln sells upgraded Ford models with differentiated styling. That saves money in product development but except in the hands of pros like Volkswagen, which mixes and matches with Audi with little impunity, platform commonality is not a recipe for long-term success.

Also, Lincoln remains solidly rooted in North America and has no visible presence overseas. That’s a turnoff for potential customers and limits the opportunities for growth in countries like China and Russia.

Lincoln sales in 2010 have been soft. While Ford brand results shot up 30% in the first six months this year, and the overall industry is 17% ahead of a year ago, Lincoln has advanced just 8%.

New and different models are on the way, but for now Lincoln seems to be marking time. It can claim few technological advantages over its competition, and it recently lost a step in distribution.

Mercury, the Ford brand that had been paired with Lincoln in dealerships, is being phased out. That means upscale-aspiring Lincoln buyers will have to start rubbing shoulders with shoppers in high-volume Ford stores.

At least that will make it easier to comparison-shop the 2011 Lincoln MKS. Most of its engineering is borrowed from the Ford brand. Equipped with Ford’s popular EcoBoost engine, it is functionally comparable to a Taurus SHO.

Being a Lincoln, it carries a heftier price tag. The base price of a Taurus SHO with all-wheel-drive reads $37,330, while the MKS starts at $48,160 and goes up from there. The sticker on my test car read $57,805.

The MKS seems pitched toward older buyers, which fits with Lincoln’s demographic profile. On the instrument panel, that’s a plus. The gauges are attractive and easy to read, and after struggling with the audio controls on a number of European cars, I found the operation of the MKS’s system refreshingly direct.

The seats are firm and enveloping — good for ailing backs — and the car feels solid and secure. That shows up in the handling as well, unfortunately: The ride is firm, and the car isn’t particularly nimble. In the end, the MKS isn’t cushy enough for older drivers nor enough fun to drive for younger ones.

And aside from the bow-wave split front grille, the MKS doesn’t have any obvious Lincoln heritage. So those hoping to impress their Ford-owning neighbors by parking a Lincoln in their driveways will have a hard time.

With Cadillac planning to fill out its line of cars with new models slotted both above and below the CTS, Lincoln is going to have to try harder to capture American luxury car buyers.

Buyers have begun to expect more from America’s most improved automaker.

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