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Ford’s Lincoln brand to debut in China with stores in seven cities

By: | at 05:33 PM | International Trade  

Ford Motor Co’s premium brand Lincoln may be late to China’s luxury boom, but its top executives say the upscale car market still has plenty of steam left for growth to make its debut later this year worthwhile.

John Lawler, head of Ford’s China operations, said that the Dearborn, Michigan automaker plans to open eight Lincoln retail outlets in seven Chinese cities including Beijing and Shanghai starting in October. Ford aims to boost the number of stores to 60 and push into a total of some 50 cities by 2016.

Lawler would not provide a forecast for volume.

He told Reuters in an interview earlier this week that Ford was “excited about the potential opportunity” in China, which he said was poised to displace the United States as the world’s biggest luxury auto market by 2020.

Some companies forecast the volume of upscale cars costing more than $50,000 in China to total nearly 3 million vehicles a year by that time.

Demand for premium cars in China has surged in recent years.

“The market might not grow at the same pace as before, but we still think there is a lot of growth left. The party isn’t quite over yet,” he said.

Still, Lincoln’s timing for a China entry, along with that of other recently launched luxury car brands such as Nissan Motor Co’s Infiniti and the Honda Motor Co’s premium brand Acura, is less than perfect.

After well over a decade in China, three German premium brands, Audi, BMW and Mercedes-Benz, dominate the country’s marketplace.

What’s more, a victim of its own recent success, the Chinese luxury auto market has become a hyper-competitive battleground. Five years ago, there were fewer than a dozen luxury car models sold under five premium brands. Today, that has exploded to more than 90 models offered by 25 brands, according to market research firm TNS.

Lawler, however, said rapidly changing profiles of Chinese customers give an opening for Lincoln.

Before, the market was so new and consumers were so inexperienced that it was “all about the panache of the product, and the (social) statement it made,” Lawler said. “You went into the store and you paid whatever the price because price didn’t really matter.”

Now, luxury cars such as the Lincoln MKZ sedan and the MKC crossover SUV which Ford begins selling in China later this year are more than transactions to a newer breed of customers in China.

“They’re less about conspicuous consumption. They’re really about experience and personalized service and enjoying luxury from every element - not just the product but the whole experience,” Lawler said. (Reuters)