(Updates with closing share price in 11th paragraph.)
March 21 (Bloomberg) -- Ford Motor Co., the second-largest U.S. automaker, said sales of its struggling Lincoln luxury brand are improving after the company ended an arrangement to ship its newest model through a second plant.
Ford’s plant in Hermosillo, Mexico, this month began sending MKZ sedans directly to dealers, Joe Hinrichs, Ford’s president of the Americas, told reporters today in Dearborn, Michigan, near the company’s headquarters. Ford had been sending some MKZs to a plant in Michigan for additional quality inspections and to be equipped with missing parts.
“The sales have been increasing, especially over the last week or so, as the inventories have improved,” Hinrichs, 46, said at an event with Michigan small businesses and suppliers. “We’ll be certainly at normal levels in April. You’ll see a more normal sales rate of the MKZ starting in April.”
Lincoln U.S. sales plunged 25 percent during the first two months of the year. Ford is counting on the MKZ, which features a chrome grille inspired by eagle wings and an optional retractable glass roof, to help increase demand for its luxury line and contribute more to results in North America, where the company earned a record profit margin last year.
Ford is relying on its home market amid widening losses in Europe and break-even results in Asia, where the automaker is investing billions on new plants to take on General Motors Co. and Volkswagen AG.
The MKZ is the first of four new models Lincoln has coming over four years. Lincoln began selling the restyled MKZ in January at a starting price of $35,925.
“We’ve had some significant part availability shortcomings,” Hinrichs said today, referring to the MKZ’s introduction. “That’s starting to flow. Especially after Easter, we expect that to be pretty well shored up.”
Ford still has a number of MKZs “on hold” at its plant in Flat Rock, Michigan, that are waiting for parts or modifications to correct problems that the company found with cars in the early phase of the model’s build, Hinrichs said. Ford should be close to finished working through that backlog next month, he said, declining to give more specifics.
“I don’t want to blame the supply base for everything,” he said. “We’ve had our own internal issues as well. As we were ramping up, the expectations on the quality of this vehicle are the highest that I’ve been a part of.”
This year’s Lincoln sales decline has occurred after Ford initiated an advertising push in December to reintroduce the “Lincoln Motor Co.” with commercials featuring vintage models and an actor playing Abraham Lincoln.
Ford fell 0.7 percent to $13.26 at the close in New York. The shares have gained 2.4 percent this year compared with an 8.4 percent increase for the Standard & Poor’s 500 Index.
--Editors: Bill Koenig, Niamh Ring