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Ford Motor Company has announced that as part of their plan to help the dealerships that lost the Mercury brand when it was killed off earlier this year, they will close at least 200 Lincoln dealerships in metro areas around the country. The goal of Ford is to reduce the number of dealerships in busy metropolitan areas by at least 40%, figuring that fewer dealerships in dense urban areas will amount to more business at the dealerships that survive these cuts.

Automotive news is reporting that in order to stay in business, the dealerships that do not get the axe as part of those 200 dealerships mentioned above will need to do some serious spending in order to get their dealerships up to par with competition like Lexus, Mercedes Benz and BMW. Ford feels that between the improvements to Lincoln dealerships and the reduced number of Lincoln dealers in metro areas, consumer traffic at the remaining dealerships will increase enough to compare reasonably with their biggest competitors in the luxury brand segment.
Lincoln dealerships averaging less than two sales per week

When Ford Motor Company announced that they would be ending the Mercury brand by the end of 2010, Lincoln-Mercury dealerships were concerned with what would come of them. Some of them are high volume dealerships that sell enough Lincolns to not miss the Mercury sales but in many cases, the Mercury brand was outselling the Lincoln brand month to month. On the other hand, some of those dealerships will be left in the dust as Ford pushes for dealerships that provide a “premium experience”, so struggling Lincoln dealerships will likely be the first to go.

Consider this. Lincoln sold 82,847 units in 2009 across their network of 1,221 dealerships – accounting for an average of roughly one car (I’m rounding down from 1.3) per week. Also, if you add up the number of Lexus, BMW, Mercedes Benz and Audi dealerships in the country, they amount for less than the number of Lincoln dealerships alone. It is no wonder that dealerships are showing such poor average sales numbers with a slow-selling brand offering so many dealership choices so cutting back the number of places where you can go to buy a new Lincoln makes perfect sense.

Ford plans to do more than just close dealerships to help the brand, as the report from the Automotive News went on to explain that Ford plans to release seven new or heavily refreshed models over the next four years. Also, while this will come as little comfort to the actual employees of the Lincoln dealerships being shut down, Ford does plan to offer buy-out packages to the dealerships. This way, only the people who DO the work are losing out… not the wealthy owners.

Since the automotive industry took a dive some two years back, General Motors and Chrysler have been heavily scrutinized for shutting down dealerships as part of their recovery process. When Ford releases the official plans to cut back on the high number of Lincoln dealerships, it will be interesting to see how Ford Motor Company handles things to avoid the bad press received by GM and Chrysler when it came time for them to start locking up dealerships.

Full information from Ford is expected within the next two weeks. Stay tuned.

Quoted from Kevin March

Wait, before they do that, aren't they supposed to get a nice big check from the federal government to make sure we save these jobs?  Where's Ford's money, since their competitors had the same???  Oh wait, this is what is SUPPOSED to happen when a business isn't making the money they need to, they cut back and make sure that revenue is greater than expenses.

Quoted from Shadow

You can drive some of those electric cars 40 miles before you need to charge the battery so how long would it take to get to California at that rate.