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Mixed sales results, but automaker stocks rise on need for cars in Houston

DETROIT — The Big Three Detroit automakers on Friday reported better-than-expected August sales and issued optimistic outlooks for demand as residents of the Houston area replace flood-damaged cars and trucks after Hurricane Harvey, sending their stocks higher. General Motors, Ford and Fiat Chrysler posted mixed August U.S. sales, with GM up 7.5 percent and Ford and Fiat Chrysler down. Japanese automaker Toyota improved sales by nearly 7 percent, while Honda fell 2.4 percent. Still, analysts focused on the potential for Detroit automakers to cut inventories and stabilize used vehicle prices as residents of Houston, the fourth largest city in the United States, are forced to replace tens of thousands, perhaps hundreds of thousands, of vehicles after the devastation from Hurricane Harvey. Mark LaNeve, Ford's U.S. sales chief, told analysts on Friday that following Hurricane Katrina in 2005 "we saw a very dramatic snapback" in demand. That said, Ford sales fell 2.1 percent in August. It sold 209,897 vehicles in the United States, compared with 214,482 a year earlier. Sales were down 1.9 percent in the Ford division and off 5.8 percent at Lincoln. Demand was down for cars, crossovers and SUVs. It was not clear how many vehicles in the Houston area will be scrapped, LaNeve said, saying he had seen estimates ranging from 200,000 to 400,000 to 1 million. Ford's Houston dealers may have lost fewer than 5,000 vehicles in inventory, he said. Ford is the No. 1 automaker in the Houston market, with 18 percent share, according to IHS Markit. The company plans to ship used vehicles to Houston dealers and has "every indication we would have to add some production" of new vehicles to meet demand, LaNeve said. Investor concerns about inventories of unsold vehicles and falling used car prices have weighed on Detroit automakers' shares most of this year. Now, automakers can anticipate a jolt of demand from a big market that is a stronghold for Detroit brand trucks and SUVs. "It's got to be a positive for the industry," LaNeve said. Investors appeared to agree. GM shares rose as much as 3.3 percent to their highest since early March. Ford increased 2.8 percent at $11.34, and Fiat Chrysler's U.S.-traded shares were up 5.2 percent $15.91, hitting their highest in more than five years. GM reported a 7.5 percent increase in U.S. auto sales in August, helped by robust sales of crossovers across its four brands.

How Lincoln could make itself special again

Things are going better for the Lincoln brand — or, more properly, The Lincoln Motor Company — so far this year, and are likely to continue to do so, comparatively speaking. In the first quarter of 2017, the brand's sales are up 8.7 percent compared with the same period last year. Lincoln delivered 27,083 units in the first quarter. The Continental is certainly a boon, with 3,209 units (almost 12 percent of the total number), something Lincoln didn't have in the first quarter of 2016. Its crossovers, the MKC and MKX, were up 15 and 11.2 percent, respectively, and while the Navigator SUV was down 16.2 percent, the new 2018 model will certainly boost that nameplate. Still, there is undoubtedly a glass — or crystal — ceiling for Lincoln (as well as for Cadillac) that it's not likely to break through regarding total US sales. No matter how you look at it, the US luxury market is dominated by import brands, and there is no reason to think that's going to change. Ever. According to Autodata, for the first quarter of 2017 there were 213,817 luxury vehicles delivered, of which 170,780 were from import brands and 43,037 domestic. While there is a good likelihood that Lincoln will gain some ground, given the lineup extensions that the likes of Mercedes, Audi, BMW, and Lexus are making, as well as the creation of new brands like Genesis and the traction of Tesla, it is going to be all the more challenging for any company to get any significant growth in the luxury category. So growth for Lincoln, yes. Notable growth? No. But there is something the company could do to generate revenue separate from the car and crossover business. It may not make a lot of money in and of itself, but it can provide a distinct edge in the product segment that would cement Lincoln with a unique offering. Kumar Galhorta, president of Lincoln, frequently talks about "experiences." About how the company is working to relieve or eliminate "pain points" from its customers. About how time — or the perceived lack thereof — is something Lincoln is working to address. And it's doing so in a way that gives it a distinctiveness vis-a-vis the competitive set. Lincoln's services are creating a buzz in a way that Matthew McConaughey ads never will. Lincoln is addressing it through service. As in offering pickup and delivery for service appointments for all new 2017 Lincoln models.

The Lincoln Way seeks to woo customers with unique services

Lincoln has been fighting hard to shed their image as a luxury brand for the elderly. The company has recently introduced or updated nearly every vehicle in its fleet in order to literally put a new face on the brand. Options, like the Black Label program, attempt to pull influence from high-end automakers that provide services extending beyond scheduled oil changes. Now, Lincoln is introducing a program that it refers to as The Lincoln Way, a suite of customer-oriented services that the company hopes will set it apart from the pack. All of this starts this fall when the new Continental goes on sale. Customers will have access to services like vehicle pickup and drop off and complimentary loaner vehicles. The company is planning more incentives for the future, but details are vague. Lincoln parent Ford is offering similar services on the upcoming GT. The Lincoln Way seems to be an expansion of some services already offered under the Black Label program. Right now, Black Label includes scheduled maintenance, car washes, and concierge services, as well as exclusive vehicle colors and options. The program is pricey and only available on some models in some states, though Lincoln plans on expanding Black Label's reach. In addition to these services, Lincoln is opening a showroom of sorts, called the Lincoln Experience Center, in Newport Beach, California. The facility won't actually sell vehicles. Instead, customers can come and learn about the brand, build and price vehicles, and take test drives. The Experience Center will then put customers in contact with local dealers. Lincoln says the increased focus on customer care and satisfaction draws influence from the company's growth in China. Since the introduction of The Lincoln Way services, sales in China have grown greatly. Sales in the United States, like China, have been improving the past few years. With the introduction of The Lincoln Way, the company hopes that Matthew Mcconaughey won't be the only draw for future customers. Related Video: Lincoln Ownership Luxury lincoln black label