The Hoffman Auto Group has opened Hoffman Lincoln after acquiring the dealership from its Connecticut Boulevard neighbor Gengras Motors. But, as one industry observer notes, the East Hartford dealership group has its work cut out.
Christian Miller, Hoffman marketing and communications director, said no price for the transaction was announced. The Lincoln dealership has been added to its Ford dealership. Updates need to still be made including new signage and a division of the showroom space. Hoffman recently spent close to $2 million upgrading the Ford facilities.
Billy Generaux, Hoffman Ford Lincoln general manager, said the dealership acquisition was made because it was a good fit. While Hoffman has imported luxury brands like Audi, Lexus, and Porsche, it lacked a domestic luxury marque. Generaux said previously Hoffman had nothing it could offer its customer base who wanted to stay with a domestic manufacturer. “We have something that we can compete with that Hoffman never had,” Generaux said.
Miller said the new brand also would not siphon off customers from its other luxury outlets. “This gives us more options to sell to our customers. They can get a good, same-day comparison at our stores,” he said.
The choice of Lincoln is an interesting strategic move for Hoffman.
“It’s been challenging times for Lincoln. They’re trying to find a brand identity and attract younger buyers,” said Jesse Toprak, an analyst with TrueCars.com who follows the automotive industry. “It’s ironic because they have the best products they have ever had. The biggest problem is image, not product.”
Miller conceded that point. “Consumers think Lincoln is a brand that has been neglected for many years,” he said, but “it’s not Grandpa’s Lincoln any more. That’s the perception that is going to have to take time.”
Hoffman is in the midst of a six-to-eight-month launch plan for the dealership, Miller said, with an extensive television and radio campaign to build awareness. “We have to start reaching out to the Lincoln customer base,” he said. Its marketing efforts will be aimed at younger Baby Boomers and empty nesters.
Lincoln has been going through sales doldrums while buyers wait for the company to turn around a perception that it sells enhanced Fords that don’t stand on their own. Lincoln Motor Co., as Lincoln is now known, is owned by Ford. Sales for 2012 were down 4.1 percent at a time when overall the industry saw a sales increase of 13 percent.
Toprak said buyers in this competitive set (BMW, Audi, Mercedes Benz) are shopping based on brand. “You would have to actually explain why you are buying a Lincoln,” he said. “Lincoln has to try to change the brand image of the consumer and that’s not a short process.”
It’s also not an impossible one, either. He cited the case of Hyundai, which in 1995 was almost considered a pariah among car buyers. It is now setting sales records. “That proves you can do it,” Toprak said.
Miller said Ford is a large enough company that it will be able to invest the time and resources into rebuilding the Lincoln brand. He said it’s not the same as what happened to Hoffman’s Saab dealership. It was shut down (and turned into a used car store) after Saab’s parent company went bankrupt after being sold off by GM. “Lincoln is different because it’s under Ford’s umbrella,” he added.
Chip Gengras, president of Gengras Motors, said his company sold the Lincoln dealership because Ford was requiring a major investment in facilities upgrade it didn’t want to make. “Lincoln was a very small part of our business and we wanted to focus [improvement investments] on our Volvo store in East Hartford, which is the largest Volvo dealership i the state of Connecticut.”
One economic advantage to the purchase for Hoffman was the existing Ford dealership with its parts and service departments can now also serve the new Lincoln customer base. The Ford service department has five master service technicians onsite, which Hoffman said is unusual for one dealership.
