After steady year-on-year improvement, Ford has plunged from fifth position in 2010 to 23rd in the 2011 Initial Quality Study released by J.D. Power & Associates on Thursday. Lincoln, the luxury subsidiary of the Ford Motor Company, was ranked eighth last year, but fell to 17th this year.

The rankings, however, belie the automaker’s sustained manufacturing quality, the survey authors noted.

Primarily, the steep decline was attributed to consumer complaints about MyFord and MyLincoln Touch, the company’s in-car telematics systems that use a touch screen, dashboard display and voice commands presumably to help drivers operate radio and climate controls, as well as the navigation system.

Many in the automotive press, including The Times, have been critical of the system’s complexity. Consumer Reports said the “aggravating design” was one reason it could not give the Ford Edge its coveted designation of “Recommended.”

The initial quality study by J.D. Power examines vehicles during the first 90 days of ownership. This year, it was based on responses from more than 73,000 owners and lessees of new vehicles from the 2011 model year.

Vehicle owners were asked whether they had any of 228 possible problems, which included mechanical defects and malfunctions as well as design issues like the controls’ ease of use in categories like exterior, engine/transmission and audio/entertainment/navigation.

The study then graded automakers on the number of problems per 100 vehicles — the lower the number the fewer problems and the higher the initial quality rating. Over all, Lexus garnered first place in the study’s brand rankings. Rounding out the top five were Honda, Acura, Mercedes-Benz, and Mazda and Porsche in a tie for fifth.

In the 2010 ranking, when it placed fifth, Ford had 93 problems reported per 100 vehicles. That ratio has increased to 116 problems per 100 vehicles this year.

“They had a really good quality story,” said David Sargent, vice president of global vehicle research at J.D. Power, in a telephone interview. “They were progressing steadily year over year, and everything was going fine.”

“Consumers are looking for these touch technologies in vehicles and Ford took the, let’s say, brave decision to be a leader in this area,” he added.

But no good deed goes unpunished. Consumers complained that the system was not as intuitive to operate as they would have liked, while also airing their displeasure about the hands-free, voice-activated operations.

When asked whether there were other problems that contributed to Ford’s fall, Mr. Sargent said MyFord Touch was the primary driver, but “there were a few other things which together would add up.”

He would not elaborate on what those were, as none of the problems were significant enough to discuss in detail, he said.

There is some good news for Ford, however. In the realm of manufacturing defects and malfunctions, Ford “continues to perform pretty well,” Mr. Sargent said. “What we are witnessing here essentially has nothing to do with manufacturing,” he said.

What befell Ford this year echoes the experience of BMW in the 2006 survey. When J. D. Power redesigned the survey to add more questions about design problems, BMW performed poorly because its new iDrive interface system received significant criticism, yet its manufacturing quality was on a par with that of Toyota.

Ford Motor Co. on Wednesday forecast a second-quarter pre-tax profit that would fall below analysts’ estimates as the auto maker spends more on commodities and on expanding its business.

“For the second quarter, we expect the company’s total pre-tax profits excluding special items to be about the same or potentially slightly lower than the first quarter results,” Ford Vice President and Controller Robert Shanks said at an analysts’ conference in Chicago. He said its full-year earnings outlook remains unchanged.

Analysts currently estimate profit for the quarter ended June 30 of 64 cents a share, reported The Wall Street Journal. The Dearborn, Mich., auto maker reported pre-tax profit of $2.8 billion, or 62 cents a share, in its first quarter ended March 31.

A Ford spokesman declined to comment other than to note the company still expects improvement in full-year, pre-tax operating profit and automotive cash flow.

Mr. Shanks said his comments were in line with Ford’s previous guidance other than the second-quarter results to be about flat with first-quarter earnings. Ford generated a profit of $2.55 billion, or 61 cents a share, in the first quarter.

“If you look at the second quarter, it will actually be very close to the first quarter, maybe a little bit lower, but actually very close,” Mr. Shanks said.

“For the second half of the year, we expect the company’s total pre-tax profits excluding special items to be lower than the first half. This is due to higher structural cost largely to support our growth and brand plans, increasing commodity cost and seasonal factors that tend to favor the first half of the year.”

He said the company will spend $2 billion more on commodities this year than it did in 2010.

Auto makers and their parts suppliers are once again beginning to struggle with higher costs for steel, oil and rubber as industry output continues to recover and vehicle demand intensifies. Investors are watching to see if companies can succeed at maneuvering through the higher costs without eroding profits.

Mr. Shanks again raised the possibility of Ford re-starting its dividend. Ford executives made the same remarks during a business update meeting last week. The company stopped paying a stock dividend in 2006.

He offered a road map to paying a dividend, saying it would come, “Once we return to investment grade [debt rating], we maintain a strong business with a strong liquidity keeping our break-even levels low so that we can maintain our investment grade [rating] through a recession similar in severity to the one that we just went through. With these actions, we expect to achieve a competitive cost of capital and provide acceptable returns to our shareholders.”

Ford shares fell 2 percent or 27 cents to $13.15 in 4 p.m. New York Stock Exchange trading on Wednesday. The stock has lost 21 percent year-to-date. Shares fell Monday after a Cleveland judge ordered the company to pay $2 billion in a class-action lawsuit brought by about 3,000 dealers who sold commercial trucks.

Now that Ford Motor Co. has escaped from the grip of recession and projects a doubling of vehicle sales by mid-decade, the second-largest U.S. auto maker is making a revival of its ailing Lincoln luxury brand its top priority.

Later this year, Ford will begin a sweeping make-over of the 96-year-old brand, to give staid Lincoln a new identity as a producer of high-tech, understated luxury cars, Ford executives said.

The first look at Lincoln’s future will come in November when Ford unveils redesigned versions of its MKS sedan and MKT sport-utility vehicle, the first of seven new or redesigned Lincolns. The MKS will feature a sleeker design, self-tuning suspension system and hands-free controls and entertainment system, reported The Wall Street Journal.

Whizzy technologies that the auto maker is counting on to turn heads: retractable, all-glass roofs and computerized sound-reduction technology, similar to noise-cancelling headphones, to block road noise and make Lincoln interiors ultra quiet.

“Lincoln will give [customers] opportunities to tell a story about what is unique in their vehicle,” said Derrick Kuzak, Ford’s head of global product development, in an interview. “You think of BMW as engaging to drive; you can think of Lexus as refined. Bring them together and it is a new experience no customer has ever had.”

Lincoln will be aimed at technology-loving, upscale consumers that Ford believes make up an increasing portion of the luxury-car market, Mr. Kuzak said. Affluent professionals who tend to value experiences, such as exotic vacations, over the bling of big-name luxury goods can be lured away from other luxury car brands to Lincoln, Mr. Kuzak said.

It won’t be easy. A little more than a decade ago, Lincoln was the top-selling luxury brand in the U.S. Lincoln limousines were preferred by U.S. presidents and Hollywood directors. Every president from Calvin Coolidge through George H.W. Bush rode in a Lincoln limousine.

But as German luxury brands BMW, Audi and Mercedes-Benz expanded their lines and introduced new technologies, Ford chose to stock the Lincoln brand mainly with upgraded versions of the same cars it sells as Fords. The MKS sedan shares many parts with the Ford Taurus, for example. The Lincoln MKX crossover is nearly identical to the Ford Edge.

Tim Sanders, a pharmaceutical sales representative in Cleveland, Ohio, purchased Lincolns in the past but the last car he bought was a BMW. Lincolns “just aren’t exciting to me anymore,” he said.

Last year Ford also killed off its Mercury brand, which used to be paired with Lincoln in dealerships. But without Mercury, many Lincoln stores have seen customer traffic plunge. The brand also struggles to attract young customers. The average age of a Lincoln buyer is 62 years old, compared to just 54 for Lexus and 49 for BMW.

“We are still living with that perception that my grandfather and my grandmother drive a Lincoln,” said Andy Czajkowski, owner of Statewide Ford-Lincoln in Van Wert, Ohio. “They have to bring out products faster.” With Lincoln’s current line, Mr. Czajkowski says he is fighting an uphill battle. In May he sold just three Lincolns.

In the first five months of the year, U.S. auto sales have increased 14 percent over a year ago, but Lincoln’s sales are down 7.5 percent. In May, Lincoln sold just 7,399 vehicles in the U.S., about the same number as Volvo, a brand that Ford sold in 2010. Volvo’s current owner Zhejiang Geely Holding Group Co. is aiming to recast the brand to include luxury cars.

General Motors Co.’s two upscale brands, Cadillac and Buick, did much better, selling 11,623 and 15,579 vehicles, respectively. BMW, the luxury leader, sold more than twice as many cars in the U.S. as Lincoln, 20,651.

A strong luxury brand is a key to most successful car makers. Lexus and Acura help Toyota Motor Corp. and Honda Motor Co. improve economies of scale and earns thicker margins than their mainstream models. GM counts on Cadillac to cast a marketing halo over its other makes. Luxury brands also help attract and retain customers who tend to be more loyal and less price-conscious than mainstream car-buyers.

BMW is actually targeting the very same consumers as Lincoln aspires to in a current marketing campaign that focuses on the joy it believes customers get from driving its vehicles. One print ad uses the tagline “Joy is Maternal,” a departure from past promotions that emphasized handling and acceleration.

Mr. Kuzak concedes the seven new Lincolns in the pipeline will still share parts with Ford models, but he promised they will have unique exterior panels, headlamps and other touches to give them a distinct look.

The new Lincolns also will have some technology that won’t appear in Fords. Most of the seven new vehicles will have computer-controlled steering and suspensions systems that adjust on the fly to provide a sporty or comfy ride, depending on how the car is being driven.

For now, Lincoln enthusiasts will have to have the patience that comes with age. The refreshed MKS and MKT will arrive in the first half of 2012, followed by an all new MKZ in late 2012. The four remaining vehicles won’t be launched until 2013 or 2014.

Ford Motor Co. Chief Executive Officer Alan Mulally said that while the economy is the automaker’s main concern, he expects conditions to improve in the second half of the year.

“Our biggest concern of course is that the economy has slowed a little bit from where we thought it would be,” Mulally said today in a Bloomberg Television interview. “Having said that, most of the economists believe that it’s going to start picking up in the second half with everything that’s been put in place, both monetarily and fiscally.

“We believe with the economy coming back we’re going to exceed our performance from last year,” he said.

Ford, the second-largest U.S. automaker, said today its global sales will rise 50 percent by 2015 to 8 million vehicles a year as it delivers more small cars and boosts revenue in Asia.

Automakers reduced spending on discounts and incentives for U.S. customers in April by 14 percent to an average $2,320 per vehicle, the lowest in more than five years, as sales climbed.

Ford Motor Co. average spending on discounts and promotions declined 20 percent from a year earlier to $2,399, Woodcliff Lake, New Jersey-based Autodata Corp. said yesterday. Chrysler Group LLC lowered spending 23 percent to $2,806, and General Motors Co. reduced incentives by 8.1 percent to an estimated $3,068 per vehicle.

Industrywide light-vehicle sales ran at a seasonally adjusted annual rate of 13.2 million in April, Autodata said, accelerating from a year earlier and exceeding the 13 million pace that was the average estimate of 12 analysts surveyed by Bloomberg. Incentives are likely to continue dropping in the coming months due to Japan-related supply shortages, said Jesse Toprak, vice president of industry trends at TrueCar.com.

“The outlook for incentives is that they are going to be down dramatically,” Toprak, whose auto-pricing website is based in Santa Monica, California, said yesterday in a telephone interview.

General Motors Co. reduced incentives by $272, or 8.1 percent from a year earlier, to an estimated $3,068 per vehicle. Toyota Motor Corp., the world’s largest automaker, reduced spending $60, or 3.1 percent, to an estimated $1,885 per unit, Autodata said.

Honda Motor Co., fourth in the U.S. sales by volume, raised incentives to $2,171, 8.7 percent more than a year earlier, according to Autodata. Nissan Motor Co. reduced discounts by 33 percent to $1,998.

The last month that industrywide average incentive spending was lower was October 2005 at $2,204 per unit, David Lucas, an analyst for Autodata, said in an e-mail.

Ford Motor Co. the second-largest U.S. automaker, said the $2.55 billion first-quarter profit it reported yesterday may be the company’s biggest this year as costs increase.

Ford will face $4 billion in higher expenses for commodities, new-product development, engineering, manufacturing and advertising this year. The company also said earnings from its Ford Credit finance unit will be $1.1 billion lower because of changes in lease depreciation and credit-loss reserves, reported Bloomberg.

“There are factors that you have to take into account as you get to the latter part of the year that will possibly result in our profits being lower than the first quarter,” Chief Financial Officer Lewis Booth said yesterday in an interview. “There are factors that we think will perhaps make the first quarter look like a very good quarter.”

Net income rose 22 percent from $2.09 billion a year earlier as fuel-efficient new models won higher prices, Dearborn, Michigan-based Ford said yesterday in a statement. Excluding some items, profit was 62 cents a share, beating the 50-cent average of 14 analysts’ estimates compiled by Bloomberg. Sales rose 4.7 percent to $33.1 billion.

The net income marks Ford’s most profitable first quarter since a $17.6 billion net income in 1998 that included a $16 billion gain from the spinoff of the First Associates Capital Corp. consumer finance unit.

Ford rose 12 cents to $15.66 yesterday in New York Stock Exchange composite trading. The shares have declined 6.7 percent this year.

Chief Executive Officer Alan Mulally has revived the automaker with a focus on fuel economy and raised U.S. prices twice this year as the cost of gasoline gained 26 percent. The prices consumers paid for Ford vehicles rose $900 million worldwide in the first quarter, the automaker said.

The cost of developing new models and improving the Ford and Lincoln brand images will add $2 billion to structural costs this year, Booth said.

“We are going to grow the business,” Booth said. “But growing the business does bring along with it some costs.”

The cost of commodities used in Ford’s cars and trucks will rise $2 billion this year, Booth said. Ford had $300 million in additional commodities expenses in the first quarter and expects an additional $1.7 billion in costs for the remainder of the year, he said.

“We’re seeing some signs of steel beginning to stabilize, the rest of commodities, given the economic activity around the world, we expect to carry on going up,” Booth said. “Even steel is stabilizing at a significantly higher level than last year.”

Ford said its quality performance in the first quarter was “mixed,” falling short of a goal to improve. The automaker said it expects a mixed quality performance for the year, instead of an improved one.

Some of the quality problems have been in the automaker’s touch-screen audio, navigation and communications system, known as MyFordTouch and MyLincolnTouch, Booth said.

“We had a bunch of issues, which were a little disappointing,” Booth said. “The quality issues were more a combination of launching a lot of new products and our volumes going up, rather than necessarily isolated on certain areas.”

Ford still hopes to do well in J.D. Power & Associates’ initial quality survey, where it was the top-ranked mainstream auto brand last year, Booth said.

Ford’s U.S. sales rose 16 percent in the first quarter, excluding the Volvo Cars unit it sold last year, and it outsold General Motors Co. (GM) last month for the second time in 13 years. Ford’s U.S. market share in the quarter fell to 16.2 percent from 16.8 percent as it cut discounts 9.1 percent while GM raised them 11 percent, according to Autodata Corp. in Woodcliff Lake, New Jersey.

Most of Ford’s price improvement came in North America, where net prices rose $700 million on a mix of lower incentives and higher vehicle prices, the automaker said. Ford’s first- quarter sales of $33.1 billion topped eight analysts’ average estimate for $30.8 billion.

Mulally said heated leather seats are one of the top options ordered on the Fiesta subcompact, which traditionally would have been a car sold without such expensive features. As fuel prices rise, consumers are moving to smaller models while still expecting the amenities they had in larger vehicles, he said.

“This is a tremendous change in the auto industry,” Mulally said. “We believe people are making a lifestyle choice and we’re going to see that trend by consumers continue.”

The automaker boosted North American production by 14 percent to 657,000 cars and trucks. Ford has lost 12,000 to 14,000 vehicles of production in Asia this year because of the earthquake in Japan and may lose more, Booth said. There has been no lost production in North America and the quake will have no “material” impact on Ford’s earnings, Booth said.

Pretax profit in the company’s European operations more than doubled to $293 million.

Ford Credit will distribute about $3 billion to the parent company this year, up from expected distributions of about $2 billion the company projected in January, Ford said.

“Ford Credit’s leverage is very low at 7-to-1,” Booth said. “We think we need to improve Ford Credit’s leverage, and we think the auto company can use the cash.”

Ford’s automotive operations had $21.3 billion in cash on March 31, up from $20.5 billion on Dec. 31. The company, which reduced debt by $14.5 billion last year, had automotive debt of $16.6 billion, down from $19.1 billion on Dec. 31. The automaker said it reduced automotive debt by $2.5 billion in the first quarter.

Ford has more debt than rivals because it borrowed $23 billion in late 2006 before credit markets froze, allowing it to avoid the bailouts and bankruptcies that befell the predecessors of GM and Chrysler Group LLC in 2009.