Thursday, November 21, 2013

Will Shanghai Luxury Rides Rival U.S.?


When it comes to luxury cars, consumers in Chicago have more in common with Shanghai than Stuttgart.
That is the bet that Ford Motor Co. +0.30% is placing with a new Lincoln luxury model. And many of its rivals in the premium car business are making the same call.
The new Lincoln MKC will be largely the same in the U.S. and China. Ford
Lincoln, best known for cushy, plus-size vehicles, is expected to unveil on Wednesday a new small sport-utility vehicle called the MKC. It will go on sale starting next year in largely identical versions for in the U.S. and China. It won't be sold in Europe.
That is significant because for decades, auto makers struggled to design cars that could sell in the U.S. and Europe without significant modifications, the better to spread engineering and design costs over a broader base. The U.S. and Europe were the world's two biggest markets, so the goal made sense. But particularly for the Detroit auto makers, the efforts to build one-size-fits-both models fell short, because European and American consumers have different tastes. Europeans like hatchbacks and station wagons, for example. Americans largely don't.
Now, auto makers, and particularly luxury car brands, are shifting their focus, directing more energy toward exploiting an increasing convergence of consumer tastes among affluent drivers in the U.S. and China. One result of this is the coming wave of small sedans and compact SUVs from luxury brands, which can now build sales and profit projections for such models not just on Europe and the U.S., but on the enormous Chinese market as well.
"The emergence of China, for all luxury brands, has been a game changer," said Jim Farley, Ford's head of global sales and marketing. Ford decided to make the MKC the second of four new vehicles it is developing for Lincoln in part because its marketers several years ago believed Chinese consumers would see SUVs as "aspirational" purchases, much as many U.S. consumers do, he said
The exterior and interior styling of the MKC reflect a "global outlook," said Lincoln chief designer Max Wolff. When it comes to materials and colors, he said, "the similarities are more striking than the differences." Even white, once thought to be a taboo color in China because of its association with funeral vehicles is now the second best-selling color, he said.
The backs of the MKC's front seats are fully covered, so the bottom of the metal frame isn't visible to rear-seat passengers. It is a nice touch to convince a U.S. shopper the MKC should command a higher price than its small SUV cousin, the Ford Escape. But it is vital for China, where sometimes owners ride in the back
In China, the upwardly mobile entrepreneurs that Lincoln wants to attract are in their late 20s and 30s while U.S. customers are in their 50s, said Lisa Drake, the Lincoln MKC's chief engineer. The MKC will come with four cylinder engines in both countries. Chinese consumers tend to be less obsessed than Americans with the size and performance of the engine, Ms. Drake said.
Rival auto makers also see a convergence between the world's No. 1 and No. 2 auto markets. "What is preferred in the U.S. is preferred in China," said Hakan Samuelsson, chief executive of Volvo Cars, a unit of Chinese auto maker Zhejiang Geely Holding Group Co.
Volkswagen AG VOW3.XE +0.23% 's Audi NSU.XE +0.59% luxury brand is launching next year a new compact A3 sedan that exists in large part because Audi's target customers in the U.S. and China share a preference for the sedan profile over the hatchback look popular in Europe, said Filip Brabec, product planning manager for Audi AG's U.S. marketing arm.
"Without the U.S. and China, the sedan would have been a much more difficult case to make," he said.
The business case for the Lincoln MKC would also be harder to make without China. Once the No. 1 luxury brand in the U.S., Lincoln is now No. 8 here, selling through the first 10 months of this year less than a third the vehicles that U.S. luxury leader BMW AGBMW.XE -0.01% has delivered. Lincoln is almost entirely a North American regional brand, with its base in the U.S. heartland.
"We're a challenger brand," in the U.S., said Ford's Mr. Farley. In China, many consumers are aware of the Lincoln brand and think well of it, Mr. Farley says, but they associate it with stately limousines. The brand's task will be to link the compact MKC to that legacy.
Getting that right will require attention to detail, because U.S. and Chinese consumers may have similar tastes, but not precisely the same tastes. One point on which Chinese and U.S. buyers differ is wheel size, Lincoln executives say.
Americans like larger wheels, 19 or 20 inches in diameter. In China, consumers tend to prefer smaller wheels with larger sidewalls, Ms. Drake said. Lincoln has covered its bets, designing wheels for the MKC in 18-, 19- and 20-inch sizes.

Summary:
Lincoln, best known for cushy, plus-size vehicles, is expected to unveil on Wednesday a new small sport-utility vehicle called the MKC. It will go on sale starting next year in largely identical versions for in the U.S. and China. It won't be sold in Europe. Auto makers struggled to design cars that could sell in the U.S. and Europe without significant modifications, the better to spread engineering and design costs over a broader base. European and American consumers have different tastes. Europeans like hatchbacks and station wagons, for example. Americans largely don't.

My opinion:
First of all, it is not easy to make one product for global market especially when this product has many details such as a luxury car. Now Ford in this article tray to avoid make big change in its  MKC Lincoln and Ford planed to sell it in US and China ( ignore EU market). That's mean Ford did it homework, it find what each market like and dislike

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