Ford hopes China's love of chauffeurs could save America's luxury cars

Ford has been enjoying a decent run of business lately thanks to the enormous popularity of its F-150 trucks plus some smaller sedans. But one sign that the company still exists in a somewhat fallen state is that its Lincoln luxury sub-brand is still a minnow compared to the major German and Japanese luxury marques.

The company is hoping to change that with the latest edition of the Lincoln Continental, announced yesterday in concept version in New York.

But there's an interesting twist. Ford's plans for reviving a once-iconic American brand are all about China — where chaffeurs are cheaper to hire and Lincoln doesn't have a tarnished reputation.

A car for people with chauffeurs, not for driving enthusiasts

(The Verge)

The new Continental has a classic external style and a not-super-impressive V6 engine. But the interior and especially the back seat really stand out. It features a mini desk with a built-in touchscreen that offers seat controls, an entertainment system, and some not-yet-specified communications functions. A person sitting in the back can control the front passenger seat to make more room for himself, and the right rear seat features a footrest that can expand at the expense of the front passenger.

Which is to say that this is a car whose target market is people who are driven around by a chauffeur.

Such people exist in the United States, of course, but it's rare. For one thing, few people can afford it. But beyond that, America has a car culture and even prosperous people often want to put their luxury money behind a car that's fun to drive rather than a car that's optimized for backseat sitting. BMW markets itself as the Ultimate Driving Machine, not the Ultimate Riding Around Machine.

Ford thinks Chauffeurs are big in China

In China, the situation is a bit different. Wages are lower, so it's much cheaper to hire a driver there than it is in the United States. And because the whole country was so poor so recently, few Chinese people have the kind of multi-generational commitment to driving that's common in the US. Over there, the thinking goes, the kind of person interested in paying a premium price for a premium car really is interested in sitting in the back seat.

China is already the world's largest market for cars overall. In the luxury segment, it's number two behind the United States. Even with Chinese economic growth slowing down, it's a fair bet that the growth in the Chinese luxury market will be enormous as it matures.

At the unveiling event, Lincoln President Kumar Galhotra reportedly told journalists that even though luxury cars are only 9 to 10 percent of all cars on the road they represent almost one-third of all profits.

A new beginning, or a new Town Car?

The less polite version of the case for the China-first strategy is offered by Robert Wright of the Financial Times who says "Lincoln has built much of its strategy around appealing to Chinese consumers who have not been put off the brand by the decades when it focused on poor-quality vehicles popular mainly with US car services."

The focus is on China, in other words, because the Lincoln brand is tarnished in the United States.

Here in the company's home market, perception of the Lincoln brand is heavily influenced by the now-defunct Town Car — a very large but not especially high-quality vehicle optimized for fleet sales. Not so much a true luxury item for the chauffeur set as a moderately classy ride to the airport. One question for Lincoln is whether this chauffeur luxury market genuinely exists. By the numbers, after all, the #1 luxury brand in China is BMW — just like in the United States.

That suggests that as the Continental shifts from concept car to production model, actual driving quality will still be the key to its success. If Lincoln hopes to truly compete with the top luxury brands — rather than recreating the Town Car under a new name — they need to make a car people want to drive, not just be driven around in.

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