Lincoln says that despite backlash from a California dealer group, it plans to move forward with a policy financially penalizing some dealerships for sharing showrooms with the Ford brand.

Lincoln President Joy Falotico toldAutomotive Newslast week that the brand would require dealers in the top 30 luxury markets to build standalone stores, citing research that showed 80 percent of luxury shoppers would not go into a dual luxury-mainstream dealership.

Dealers also have been told by Lincoln that if they fail to comply with a requirement that Ford and Lincoln dealerships have separate names, they wont receive a co-op reimbursement from the factory, which is about $100,000 a year per dealership, the California New Car Dealers Association says. The association also said that the commitment program would withhold 3.5 percent of a dealer’s margin if they operate a dual facility.

"At this time, we dont plan on making any changes," Falotico said in an interview, noting that the annual Lincoln commitment program behind the policy is vetted and supported by the brands dealer council. "We think its really important to have a standalone facility."

In a Nov. 20 letter to Ford Motor CEO Jim Hackett, the associations president, Brian Maas, said dealers have "serious concerns " about the policys effect on those who operate dual Ford-Lincoln stores. The association, which claims anti-dualing policies violate aspects of California franchise laws, is seeking a response from Ford by Saturday, Dec. 8.

Mass on Monday said he had not yet heard back.

"Were awaiting the official response," Maas told Automotive News. "If that is their point of view, that theyre not going to make any changes to the plan despite what we think is potentially significant violations of California law, then were going to have to weigh our options."

He said the associations course of action would depend on whether Lincoln firmly sticks with the policy or takes the time to do a review.

"If their position is, No, of course this plan is great and were not making any changes, as we outlined in the letter, weve got a California statue that says dealers are allowed to dual based on economic circumstances," Maas said. "And one obvious one would be just a couple years ago Ford and Lincoln said they could dual. So it doesnt make sense that they reversed their policy within a period of 48 or 72 months."

The association says about 33 of 38 Lincoln dealerships in California are dualed with a Ford showroom, meaning an anti-dualing policy affects most California Lincoln dealers.

Source: Autonews

December 3, 2018