Ford Motor Company made the demise of Mercury official today by confirming that the production of Mercury vehicles will end in the fourth quarter of this year. (See Rest in Peace, Mercury)
Of Ford Motor Company’s 16% market share in the U.S., Mercury accounts for 0.8 percentage points or roughly 100,000 units, a level that has been flat or declining for the past several years.
With the impending cancellation of the Mercury Mountaineer sport utility this year and Grand Marquis sedan next year, the Mercury lineup would have been down to just four derivative products –the Mariner compact SUV and the Milan midsize sedan, along with hybrid versions of both. This is not enough to sustain dealers.
The decision to withhold from Mercury a version of the Ford Focus in 2000 started a product diet – critics say starvation plan – that resulted in Mercury’s paltry lineup today. As a result, Mercury’s customers, pricing and margins are almost identical to those of the Ford brand, but Mercury’s incremental sales have been declining, which led to the death sentence.
Now, Lincoln will get a version of the Focus – named the Irony or maybe Versailles? – in an attempt to increase transaction prices to higher levels than they would be if the compact car were a Mercury, given its tarnished image. While this might work in the short term, critics argue that it ultimately sends Lincoln down the same dead end road that Mercury is now parked on.
Ford claims that existing Mercury owners will receive continued access to parts and service support at Ford and Lincoln dealers. Current Mercury vehicle warranties and Extended Service Plans will also be honored. There will of course be special offers available on new Mercury vehicles through the summer as Ford dumps the inventory.
“Profitably growing Lincoln in North America is an important part of our One Ford plan,” said Alan Mulally, Ford president and CEO. “Our Ford brand is gaining momentum and winning customers around the world.
The majority of current Mercury sales are to fleet buyers and customers purchasing through employee, retiree and friends and family discounts. Ford is gambling they can largely can be satisfied by Ford brand vehicles.