Author | Zhou Zhiyu
Editor | Zhang Xiaoling
As the smoke of price wars spreads from the entry-level market to the luxury sector, the entire industry has fallen into an unprecedented &#34;systematic&#34; survival competition. This is no longer a contest of single products or isolated technologies, but an all-encompassing war that includes brand, technology, capital, supply chain, and even organizational resilience.
In this brutal marathon, the channel network, once regarded as the brand's &#34;moat,&#34; is now undergoing a trial by fire and ice. Contraction, shutdowns, transformations... scenes of drastic measures are unfolding one after another. However, Lincoln, a century-old American luxury brand, has chosen a seemingly &#34;upstream&#34; path at this moment.
On February 14 of this year, Lincoln launched a channel lightweight plan in China called &#34;Spark Ignition.&#34; With a minimum investment threshold of 1.5 million yuan, it extended an invitation for franchise opportunities to a broader market. Subsequently, in early June, Lincoln's first independently operated benchmark store outside the network opened in Suzhou.
Transitioning from the traditional &#34;heavy asset, high investment&#34; model to a new path of &#34;lightweight, high efficiency.&#34; This strategic transformation in Lincoln's channels is also a reflection on the current intense competition in the automotive market.
Jia Mingdi, President of Lincoln China, told Wall Street Insights that the core of &#34;Spark Ignition&#34; is to achieve optimized expansion through &#34;dynamic network adjustments&#34; amidst streamlining.
In the current competitive landscape of stock fighting, automakers and dealers, as a &#34;community of shared destiny,&#34; should reshape their relationship and build a new symbiotic system, so that in this marathon without an endpoint, they not only need to &#34;survive,&#34; but also &#34;thrive and endure.&#34;
<h2>Breaking the Channel Lightweight</h2>
On June 5, the Suzhou Zhengtian Lincoln User Center officially opened. This is Lincoln's first benchmark store independently operated by an external investor.
Li Yumin, Chairman of Suzhou Zhengtian, stated that investing in Lincoln means choosing the brand's long-term value and selecting the right path for future development.
This indicates that amidst the generally pessimistic atmosphere in the industry, there are still astute investors who see the business opportunities embedded in the Lincoln model.
&#34;External investors,&#34; &#34;independent operation,&#34; &#34;benchmark store,&#34; these three keywords point to a profound transformation that Lincoln is undergoing in the Chinese market— the &#34;Spark Ignition&#34; plan.
To understand why Lincoln initiated this channel revolution, one must first comprehend the current dilemmas in the luxury car market channels.
According to Jielan Road's data, foreign brands are facing severe pressure from channel contraction, especially in the non-luxury segment, with an average of 90 network exits expected in 2024. Even in the luxury car market, which is seen as a &#34;profit cow,&#34; dealers are not having an easy time.
On one hand, the direct sales and supermarket store models of new energy brands are infiltrating every corner of cities like capillaries, continuously eating into the customer flow of traditional 4S stores; on the other hand, the internal competition of price wars has made &#34;difficult to make money on a car&#34; the norm, with high land, construction, and operational costs suffocating many investors. Shrinking networks seem to be the only choice for cost reduction and efficiency improvement.
However, Jia Mingdi and his team see the other side of the coin. &#34;While reducing costs is important, the long-term development of the brand is paramount.&#34; He recognizes that for luxury brands, service radius and user experience are the lifelines of the brand
Excessive reduction of the network may seem to save costs in the short term, but in the long run, the decline in service convenience will directly weaken users' purchasing confidence, ultimately harming the foundation of the brand.
This constitutes a dilemma: maintaining a large heavy-asset network burdens dealers, while a simple and crude contraction is akin to drinking poison to quench thirst.
Lincoln's &#34;Spark Fire Plan&#34; attempts to provide a third answer in this context. It is not merely about increasing or decreasing the network, but a strategic reconstruction of &#34;achieving optimized expansion through simplification and focus.&#34; Its core is to break the &#34;heavy&#34; with &#34;light,&#34; using a more flexible, efficient, and lower-cost model to reweave and expand the touchpoints of American luxury service.
A minimum area requirement of 800 square meters, an investment of at least 1.5 million yuan to join, and a minimum of 10 people to operate the store. This was unimaginable in previous channel operations.
Through these three major &#34;lightweight&#34; measures, Lincoln's intended goal is very clear: to further enhance network coverage while ensuring that the dealer network is healthy, stable, and profitable, bringing the Lincoln brand closer to consumers.
Jia Mingdi uses a vivid metaphor to describe this transformation: &#34;Creating a garden is like writing poetry; it must have twists and turns. The garden has boundaries, but service knows no bounds. Lincoln's lightweight layout also aims to refine infinite possibilities within a limited space.&#34; The subtext of this statement is that while the physical space of the store can shrink, the connotation and experience of the service must not be &#34;discounted,&#34; but rather be more refined and focused.
Lincoln's &#34;light&#34; is not a retreat due to a lack of brand strength, but a proactive change aimed at breaking the industry's dilemma. It seeks to find a dynamic balance point in the &#34;impossible triangle&#34; of cost, coverage, and experience, with the ultimate goal of building a healthier, more resilient, and deeper channel ecosystem in users' lives in the next stage of competition.
From the opening of the first &#34;Spark Fire&#34; store on the shores of the Yellow Sea in Qingdao, to the &#34;24-hour three-store opening&#34; in Jiaxing, Hangzhou, and Yiwu, and then to the milestone store for external investors in Suzhou, Lincoln's channel transformation is entering a phase of large-scale implementation at an unprecedented speed. So far, this plan has attracted 12 dealers nationwide to sign contracts, with an expected 20 new user centers opening within the year.
<h2>Building System Capability</h2>
If the first phase of competition in the automotive market was a victory of products, and the second phase was a victory of brands, today, this brutal marathon has entered the &#34;mid-game&#34; — competing in a kind of systemic capability that may not be directly visible to the naked eye, yet is omnipresent.
The relationship between automakers and dealers is the most core and fragile link in this system. For a long time, the relationship between the two has been more of a game based on KPIs and rebate policies, rather than a true community of shared destiny. The model of manufacturers pressuring inventory and dealers selling cars at a loss can be maintained during periods of market growth, but once it enters a battle for existing stock, the inherent contradictions will erupt.
Jia Mingdi has profound insights on this. He states that what he pursues is not a beautiful quarterly sales report, but a dealer network that can operate healthily and sustain profitability. This is the underlying logic of Lincoln's implementation of the &#34;Spark Fire Plan&#34; — first, let the channel survive and thrive healthily, so that the brand can have a foundation for long-term development
In the marathon competition of the automotive industry, how should car companies build a healthy symbiotic system? Lincoln's practice provides a sample for observation.
First and foremost, the core is to shift roles from managers to enablers.
In the traditional model, manufacturers exert more &#34;control&#34; over dealers through business policies and assessment indicators. However, Lincoln's &#34;Spark Plan&#34; embodies the thinking of &#34;empowerment&#34; in every aspect.
A key detail is that Lincoln has a clear priority strategy when approving new lightweight outlets. They prioritize existing network investors, giving them the opportunity to transform; secondly, they consider blank areas of network coverage before introducing external investors like Suzhou Zhengtian; furthermore, Lincoln is also willing to support those professional managers who have previously worked within the system and have high loyalty, helping them start businesses in a &#34;Lite&#34; model. This not only stabilizes morale but also elevates dealers from mere &#34;sales terminals&#34; to &#34;business partners.&#34;
Deeper empowerment is reflected in operational support. In recent years, Lincoln has focused on building a centralized system that systematizes sales processes, service details, material standards, etc., and has launched the &#34;Sales, Marketing, After-sales&#34; triad task force to provide concentrated support to regional stores.
This means that even a &#34;small store&#34; with only 10 people still has the strong support of Lincoln's headquarters behind it. The headquarters is responsible for outputting mechanisms and standards, the battle zone coordinates resources, and the stores focus on execution and service delivery. Through this approach, Lincoln has saved costs on hardware and precisely invested them in software services and personnel training, ensuring that the service standards of &#34;Lincoln Way PRO&#34; are not compromised due to the &#34;lightening&#34; of stores.
The essence of a price war is a zero-sum game. Jia Mingdi believes that the ideal model should be for manufacturers to set a competitive price that allows dealers to operate healthily on that basis, and even have room for price increases when the market improves, rather than setting an inflated price and then reducing it layer by layer, ultimately shifting the pressure onto dealers.
&#34;Lightweight&#34; itself is meant to lower the breakeven point for dealers. Lower investments, less rent, and streamlined personnel mean that dealers no longer need to cover high fixed costs through huge sales volumes. This gives them a certain &#34;price stability,&#34; allowing them to devote more energy to improving service quality and customer satisfaction, forming a virtuous cycle of &#34;service creates value, value brings profit.&#34;
In this ruthless automotive marathon, a momentary lead does not guarantee ultimate victory. Ultimately, those companies with a healthy body and strong systemic capabilities will be the ones that can traverse cycles and maintain stability over the long term.
Whether Lincoln's &#34;Spark Plan&#34; can truly create a sweeping momentum and reshape the channel landscape of the luxury car market remains to be seen over time. However, the exploratory spirit it represents—daring to break conventions, reconstruct systems, and coexist with partners—undoubtedly provides a highly valuable observation sample and perspective for the automotive industry amidst change

You can open a 4S store with just 1.5 million

- The article discusses Lincoln's strategic shift in response to intense competition in the luxury car market, marked by a new lightweight channel plan called "Starfire."  
- This initiative aims to optimize dealer networks by reducing investment thresholds and operational costs while enhancing service quality and customer experience.  
- Lincoln's approach reflects a broader trend of redefining relationships between automakers and dealers, emphasizing collaboration and sustainability in a challenging market landscape.

Lincoln "Spark" ignites channel war