Michigan-based US automaker Ford Motor Company’s luxury brand is currently in the midst of a $2.5 billion overhaul of its luxury line, resurrecting the Lincoln Continental model that retreated from the roads nearly 15 years ago. Lincoln is intent on earning the respect (and business) of overseas customers, particularly in China, which in addition to being the world’s largest auto market—Chinese auto sales first surpassed those of the US in 2009—may also be the leading global luxury-car market of the future, projected to account for 3.5 million in annual luxury-car sales by 2020 (up from 1.9 million in 2015).
Keen to capitalize on such growth potential, Lincoln is in the process of not only expanding the number of dealerships it operates in China from 37 in late April 2016 to 60 by year’s end, but also tripling global sales from 100,000 in 2013 to 300,000 by 2020. The automaker is also in talks to begin manufacturing vehicles in the southwestern Chinese city of Chongqing, a move that would save the brand from paying a 25% import tax, boosting competitiveness against German luxury models. Lincoln would not be the first foreign auto company to put down roots in Chongqing, a growing center of Chinese manufacturing and aspiring “robot capital” that acquired a Ford engine factory in 2013 and produces one eighth of all cars manufactured in China.
Michigan, home to Ford Motor Company, was among the first US states to establish formal ties with China. In fact, Governor Rick Snyder participated in a summer 2015 trade mission to China, where he joined Chinese Ministry of Commerce Vice Minister Zhong Shan in signing a pledge to buttress Michigan-China trade and economic ties, as well as inked agreements with four Chinese provinces and the city of Chongqing, all of which host auto manufacturers and suppliers. More recently, Governor Snyder launched the “Michigan-Shenzhen Trade, Investment and Innovation Cooperation Center” alongside Shenzhen officials in the hopes of forging deeper cooperative relations.
Production at a Chinese-based Lincoln auto plant is estimated to begin somewhere between 2018 and 2020 at the earliest, provided Ford reaches an agreement with partner Changan Automobile Group regarding profit-sharing. That said, the prospect of producing vehicles in China over the near-to-medium term is but one component of Lincoln’s long-term strategy for leveraging the growth potential of the Chinese market. Indeed, Lincoln affiliates spent three years meticulously planning the brand's 2014 entrance into China, assessing Chinese consumer preferences and even establishing the so-called “Lincoln Institute” in Shanghai to familiarize staff with “The Lincoln Way,” a “one-size-fits-one” sales model for delivering personalized, top-end service.
Such acute attention to detail has begun to bear fruit; Lincoln recorded strong sales in China during FY2015 in spite of slowing overall Chinese auto-sales growth. The real test, however, will be whether Chinese buyers respond favorably—and in large numbers—to the forthcoming 2017 Lincoln Continental luxury sedan.
It is hardly surprising, then, that Continentals bound for China reflect the discriminating eye of Chinese luxury-car consumers. Aesthetic details, such as tightened leather seat-coverings and the absence of wide stitching, aim to evoke a sense of “Quiet Luxury,” which brand leaders expect will appeal to affluent Chinese customers and elites who enjoy being chauffeured and may be looking for a less ostentatious set of new wheels as President Xi Jinping continues to crack down on official corruption.
Linnea Logie is a Research Intern at the East-West Center in Washington and holds a bachelor’s degree in Political Science and History from the University of Connecticut.