Keith Madden has been involved with Ford Motor Co. for almost three decades, but he gave up his Lincoln Mercury franchise this year a sign of the rapidly changing automotive industry.
It's all comes down to the economic conditions in the auto industry, said Madden, owner of Madden Volvo on Skyland Boulevard (formerly Madden Lincoln Mercury Volvo).
I was involved with Ford, with Lincoln Mercury, for almost 30 years. It is kind of strange to not be involved with them anymore because it was kind of a way of life for me, said Madden, who is continuing his Volvo dealership, parts and service departments and used car operation.
We sold a lot of Lincoln Mercurys over the years, and we still do a good job servicing them, he said. But the depressed economy, slowing auto sales and changing customer tastes made his decision inevitable, he said.
The Lincoln Mercury business for us and this holds true for most markets is centered on a customer base that is 55 to 80 years old. Those are the people who are used to buying big cars the Lincoln Town Cars and Grand Marquis which were the flagships of our business for a long time, he said.
Ford decided not to make changes to those vehicles body style and plans to eventually drop their production, he said. The abandonment of the Lincoln Town Cars and Marquis wiped out 65 percent of the dealership's business, he said.
Last year saw deteriorating sales of those brands at the dealership, and in September, he attended a dealership meeting at which Ford forecast even slower sales for Lincoln Mercurys this year, he said.
As 2009 begins, I've had to make some difficult decisions as to whether it is viable for us to continue on as a Lincoln Mercury dealer, Madden said in a letter to his customers.
He cited Ford's decision to close plants, lay off more than 30,000 workers and produce fewer models and its push for mergers between its Ford and Lincoln Mercury dealers as factors in his decision.
James Cashman, a professor of management and marketing at the University of Alabama's Culverhouse College of Commerce and Business Administration, said he expects more dealerships will end their franchises as the Big Three automakers push for fewer dealers.
Ford is forcing a lot of Lincoln Mercury dealers to go out of business, Cashman said.
The Detroit automakers learned from General Motors experience when it had to pay $2 billion to buy out Oldsmobile dealerships after it stopped making Oldsmobiles, he said.
There are too many dealership more than 20,000 and the automakers need to reduce that number, he said.
Madden agreed. We have had too many dealers and too many cars for too long. That has hurt all of us [dealers], he said.
As for his future, Madden said his used car sales and automotive service will be the biggest part of his business.
His Volvo dealership will not be his core business, accounting for 2 percent to 3 percent of the new cars sold in the Tuscaloosa market, he said.
Madden acquired Tuscaloosa's only Volvo dealership in 2004, adding its Swedish-made vehicles to his showroom. Volvo is owned by Ford.
At one time, the Madden dealership employed 44 people.
We are now down to 24, he said. That happened over the last couple of years, he said, noting reductions were made in clerical, office administration, sales, management and new vehicle detailing and preparation.