With the North American International Auto Show just starting in Detroit, there have already been some exciting new vehicles. The much anticipated Chevrolet Corvette redesign was revealed (to mixed reviews, if you read automotive forums) as well as strong concept previews from Honda (NYSE:HMC) and Toyota (NYSE:TM). Of course the big reveal for me, as a strong advocate of Ford Motor Company (NYSE:F), was the new Lincoln Motor Company MKC concept SUV.
If you've been following my articles concerning Ford and Lincoln, you already know that one of my biggest concerns regarding the future of the luxury lineup is the ability of the company to put out a good looking vehicle. I have expressed many times how I am turned off by the MKX and MKT SUV models. While not everyone shares my lack of enthusiasm for those baleen grills, it's hard to disagree that the vehicles are not universally loved. Beauty may be in the eye of the beholder, but I've yet to find a single person that doesn't think the Lamborghini Aventador (PINK:VLKAY.PK) is a sweet, sweet ride. While sales of the MKX are not bad, I know Lincoln can do better, and it's something that I need to see, as an investor.
So this past Monday at the Detroit Auto Show, Lincoln unveiled the MKC concept. No, it's not an Aventador, however there is still something familiar about it. As was mentioned in the comments section of the Jalopnik review, "It Evoques some styling concepts I feel I've seen somewhere...". The resemblance to the Land Rover Evoque (NYSE:TTM) is immediately obvious, from the slope of the roofline, down to the miniscule rear window. This is the disturbing trend I'm talking about.
With Lincoln Motor Company's relaunch, the plan was to put together a lot of money and talent and build luxury cars that compete with the best. I don't doubt that the MKC will accomplish this, but is the talent really there if they're just recycling designs from when they owned Land Rover? Perhaps. I call this a trend because it seems to have started with the 2013 Ford Fusion, another beautiful vehicle, which just happens to borrow heavily from Aston Martin design cues. I don't want to accuse the company of plagiarism since those designs were most likely created at a time when Ford owned Aston Martin, however I do have to wonder where the originality and creativity are. Perhaps the next model year MKX will be an updated Volvo XC90. Maybe the next MKS will be a Jaguar XF with a winged grill.
On a side note, there's another trend that some Ford investors have mentioned their annoyance with in some of my previous Seeking Alpha articles. This is the "upgrading" of Ford vehicles into Lincolns. The MKZ is built on the Fusion platform, just as the MKX is built on the Edge platform. Likewise, the new MKC continues this trend, building off of the Escape platform. I can only partially agree with this annoyance. The difference between a luxury vehicle and the non-luxury counterpart should be more than just the exterior, leather seats and an upgraded dashboard. At the same time however, there's a fine line between sharing chassis', drive trains, etc. to save money, and spending the extra to get a truly upgraded experience. Determining the best way to do this is most likely a matter of trial and error, or give and take, to find out what the market responds best to.
From an investor's standpoint, this whole design trend is actually a pretty funny situation (to me, at least). The Fusion is selling well, as no one doubted it would, and the MKC will most likely sell well too, no thanks to the great styling. One can immediately conclude that this is a good thing for shareholders. I certainly won't be selling my Ford stock, just because the new Lincoln looks like another really good looking vehicle. Margins and assets and everything else aside, what ultimately matters is that vehicles sell well. The better they sell, the more money the company makes. For the short term (next few years), my recommendation is to buy, since a strong Ford lineup and improving Lincoln lineup will only help the sales grow. Long term, I'd just keep watching as those models come out. As a rule of thumb, if you'd be proud to drive it, so would other people.
Thanks for reading my article! As you can tell, I enjoy taking a hands-on, common sense approach to investing, and thus I write about auto shows and design rather than the fundamentals. If you came here looking for fundamentals, I recommend you read IncomeHunter's great article. Anyway, in the comments section below, I appreciate you giving me your thoughts, accolades and criticisms, and please be nice.
Disclosure: I am long F. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.