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Lincoln Looks East – But Can China Save American Icon?

Luxury maker betting China could become its largest market.

by on Apr.23, 2014

Lincoln is betting it can gain ground in China by focusing on its dealer experience.

It once vied with rival Cadillac for dominance in the huge U.S. luxury car market, but the last two decades have been tough for Lincoln. Sales have steadily slid to the point that some anticipate parent Ford Motor Co. might eventually abandon the once-grand marque.

Lincoln has rolled out several new products over the last two years, and it plans to add at least two more by 2016, but that’s a fraction of what rival Mercedes-Benz has in store – at least one all-new or completely updated product every three months through the end of the decade.

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While Lincoln officials acknowledge they can’t keep up with that product blitz, they’re far from ready to admit defeat. But while they continue to struggle to find ways to lure more American buyers back to the brand, they’re looking East, towards China, to gain some much needed momentum.

“It’s strategically important for us to go to China,” said Matt Vandyke, Lincoln’s global director, a few days before the Ford luxury brand made its official debut at the 2014 Beijing Auto Show.

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Cadillac ATS Lands in China

Luxury model joins XTS in Asian line-up.

by on Nov.27, 2013

The Cadillac ATS makes its Chinese debut.

Hoping to build momentum in what is rapidly becoming the world’s largest luxury car market, Cadillac is introducing its compact ATS model into China where it will join the bigger XTS model introduced earlier in the year.

For now, however, the smaller of the two luxury cars will continue to be imported from the U.S. which means buyers will have to pay a premium in the form of import duties. Caddy began producing the XTS model in China this year.

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The ATS, which Cadillac bills as a luxury sports sedan, is making its official debut at the Auto Guangzhou 2013 car show in Southern China. The imported model will be offered in four trim levels along with five exterior and two interior color options, and will be priced from $52,000 to $72,000, General Motors officials said.

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Lincoln Looks at Options for Chinese Production

Ford luxury brand initially will face steep import duties.

by on Aug.22, 2013

Ford EVP Joe Hinrichs at a factory opening during his time as Asia/Pacific chief.

Lincoln will rely on imports when it launches sales in China next year but it is also considering the option of producing vehicles in the booming market, according to a senior Ford Motor Co. executive.

The maker also will offer products tailored specifically to China – which means at least some models will get larger back seats than are currently offered on U.S. Lincoln products.

Relying on American-made products has a number of advantages, at least initially, Ford Executive Vice President Joe Hinrichs told TheDetroitBureau.com, including the ability to “establish the brand at an appropriate pace without the pressure of manufacturing which would force us to (try to) sell a lot.”

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But the downside is that Lincoln will initially face “pretty substantial duties,” which can run as high as 140% on some models. The hope is that increasingly affluent Chinese luxury car buyers will be willing to absorb the extra cost. There is a “strong desire” to purchase international brands even if they cost more, asserted Hinrichs, who until recently served as Ford’s top executive for the Asia/Pacific region.

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GM Expanding China Operations

Maker building plants to keep up with demand.

by on Jun.20, 2013

GM CEO Dan Akerson during an earlier visit to China. The maker is opening two new plants there.

General Motors Co. continues to go big in China.

GM and its Chinese partners broke ground this week on not one but two new assembly plants as well as a major expansion of the Pan Asia Technical Automotive Center.

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The new assembly plants are located in Shanghai in eastern China and Chongqing in the center of China. The expanded technical center will also be located in Shanghai, one the major hubs of China’s auto industry. China has become the world’s largest automotive market in the past decade.

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Mercedes Increasingly Desperate to Reverse Losses in China

Share slips as Audi, BMW come on strong.

by on Apr.10, 2013

The Mercedes CLA Concept debuting in Beijing last year. The production version could be critical for the maker's revival in the Chinese market.

Mercedes-Benz continues to lose ground in China’s booming premium car market to arch-rivals BMW and Audi — but Daimler AG’s top executive, Dieter Zetsche, told the company’s shareholders meeting the automaker is confident it can make up the ground it has lost in recent months.

Mercedes’ slide has been both acute and unexpected and the maker has struggled even after slashing prices on key models such as the flagship S-Class sedan. That’s particularly worrisome since many analysts expect China will soon become the world’s largest market for luxury vehicles, surging past the U.S.

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Zetsche admitted to shareholders that Daimler management is keenly aware it has failed to keep pace with the growth in China. “Our sales had increased rapidly for five years in a row. During that period we posted the strongest average growth of all the premium brands there. Last year, our business expanded only slightly and we lost market share. We have to change this situation and we will.”

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Spyker Has Big Comeback Plans for B6 Venator

China, rather than US, could be its biggest market.

by on Mar.08, 2013

The Spyker B6 Venator concept.

One thing you can say about Victor Muller: he doesn’t give up easily.  “I am persistent,” says the Dutch entrepreneur as he catches his breath between interviews and meetings at the Geneva Motor Show.

Many thought Muller might call it quits on the auto industry after his effort to save the Swedish carmaker Saab collapsed in the waning days of 2011. At the time, it looked like he would also be forced to sell the tiny sports car company he had launched a decade earlier.

But while Saab collapsed – an issue that Muller continues to deal with in a $3 billion lawsuit he has filed against the maker’s former owner, General Motors – he wound up keeping Spyker and now hopes to bring it back to life with the introduction of the new B6 Venator. A concept version is on display at Geneva’s PALExpo convention center and generating a fair amount of interest.

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The B6 is a compact, mid-engine sports car that picks up on some of the aerospace-influenced design cues of earlier, often outlandish Spyker models, such as the Aileron.  That includes not just its propeller logo but an aircraft-like canopy that sweeps rearward to reduce drag, LED taillights that are designed to look like the afterburners of a fighter jet, and turbofan-style wheels. The aero theme carries over into the interior, where there’s an airplane-style ignition switch, a turned aluminum dash and jet-like gauges.

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China Set to Become Globe’s Top Luxury Car Market

But there could be unexpected obstacles.

by on Mar.06, 2013

Mercedes opened the world's first standalone AMG Performance Center in Beijing.

Demand for luxury vehicles in China will make it the world’s second-largest market for expensive vehicles by 2016, and number one by decade’s end when it will likely surpass the U.S., according to a new study by the consulting firm of McKinsey & Co.

But industry analysts and planners caution that several obstacles could delay or completely short-circuit the boom in automotive demand in China, both on the mainstream and luxury level.

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Sales of premium vehicles will probably equal that of all of Western Europe by 2020, as incomes continue to rise in what is now the world’s second-largest economy, according to McKinsey & Co. China is already the largest automotive market in the world overall.

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Desperate for Turnaround, Daimler Names New China Chief

Mercedes slipping behind rivals in booming Asian market.

by on Dec.14, 2012

Daimler's new China chief, Hubertus Troska.

Daimler AG, in a move underscoring the growing importance of China to the company’ future, has named a new chief executive in charge of its operations in China and appointed him to the company’s Board of Management.

Hubertus Troska, 52, will become chief executive officer and Chairman of Daimler Northeast Asia responsible for all of Daimler’s strategic and operating activities in China.

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The timing is particularly significant considering the company has slipped in sales behind arch rivals Audi and BMW. Mercedes has had to resort to sometimes massive incentives to prop up its products this year.

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Lincoln, Cadillac “Reinventing” Themselves

Will luxury import buyers notice?

by on Nov.08, 2012

The 2013 MKZ with Lincoln design chief Max Woolf.

They were once the benchmarks of the luxury market but today, Detroit’s Cadillac and Lincoln brands struggle in the shadows of better-known imports like Lexus, Mercedes-Benz and BMW, the latter now the world’s largest premium automotive manufacturer.

But the coming months could be critical for the two domestic luxury marques as they both launch critical products that could help redefine their brands – and as they prepare for the critical step of going global.

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For Caddy, the 2013 model-year brings the launch of the big XTS and, arguably more important, the ATS, a compact sedan challenging the likes of the segment-defining BMW 3-Series.

As for its cross-town rival, Ford Motor Company’s luxury division is set to launch the first of four major new products, the MKZ, which Rich Kreder, the program’s Vehicle Integration Manager, calls, “The first really important step in redefining Lincoln.”

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Lincoln Heading to China

Ford takes first step towards going global.

by on Aug.28, 2012

CEO Alan Mulally is targeting big growth in China for both the Ford and Lincoln brands.

Hoping to give its long-troubled luxury brand some new momentum – and much-needed economy of scale – Ford Motor Co. will launch Lincoln into the Chinese market in 2014.

The announcement – which confirms a report on TheDetroitBureau.com earlier this month – will come as a critical step for Lincoln, once one of the most powerful luxury nameplates.  Even though the century-old Lincoln has never been sold in China, Ford research suggests it has significant potential in what is rapidly coming to rival the U.S. as the world’s largest high-line automotive market.

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“Lincoln’s introduction to China represents a significant step forward in Ford’s aggressive growth strategy for the country,” Dave Schoch, Chairman and CEO of Ford Motor China, said during an event at a converted temple in Beijing.

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