Ford May Shutter 200 Lincoln Dealerships

In a bid to better compete against European and Japanese luxury makes, Ford Motor (F) reportedly may seek to reduce the number of Lincoln dealerships in the U.S.

Nearly 1,200 dealers sell Lincoln models, five times more than sell Toyota Motor's (TM) Lexus nameplate, the nation's leading luxury brand. Though most outlets that sell Lincoln also sell Ford, 264 dealers sell only the Lincoln and Mercury nameplates.

With the Dearborn, Mich., automaker eliminating the Mercury brand by year's end, that will leave those dealers only Lincolns to sell. For many of those dealerships, that would be unsustainable, since Mercury accounts for as much as 60% of their sales. Ford said in June it would shutter Mercury after 70 years to reduce the number of duplicative models and devote more resources to the Ford and Lincoln brands.

Automotive News, a trade publication, said Monday that Ford wants to eliminate about 200 Lincoln dealers, about 17%. But Ford said it hasn't set a specific target, the Detroit Free Press reported. Most of the closures are expected in metropolitan markets with multiple stores. Ford will also upgrade the remaining outlets to better compete with Lincoln's competitors, which include Lexus, BMW and Mercedes-Benz.

Sales of Lincoln vehicles are up 4.7% for the year, but the division has sold just 55,776 units through August. Meanwhile, during the same period, Lexus has moved nearly three times that number -- 145,490 vehicles -- off dealers' lots.

Tuesday's news of the looming dealer closures follows a statement Monday from Ford CEO Alan Mulally that the automaker may reduce its total vehicle lineup to as few as 20 models.

With fewer models to manufacture, greater resources can be put toward improving quality and engineering, CEO Alan Mulally said in London, ahead of this week's Paris Motor Show.