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Dead Brand Walking: Ford Kills Mercury

Lincoln receives new products instead, including a Focus clone.

by on Jun.02, 2010

Does the new strategy send Lincoln down the same dead end road?

Does the new direction send Lincoln down the same dead end road?

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.

Rest in Peace, Mercury

It’s all over but the funeral after years of criminal neglect.

by on May.28, 2010

World class fuel economy is available from the Milan hybrid, at least for the moment.

The herd mentality of the media is in full view during this week’s feeding frenzy and rampant speculation over the impending demise of the Mercury brand. Such a move, if it is presented to and approved by Ford Motor Company’s board of directors at its next meeting, will cost a lot of money to shut dealers and see Ford lose the sales of roughly 100,000 annually provided by the Mercury brand.

This, of course, is not the first occasion when Mercury had to fight for its survival.

In recent times, the decision not to provide Mercury with a version of the Ford Focus in 2000 started a product diet – critics say starvation plan – that has resulted in Mercury’s paltry product lineup today. With the impending cancellation of the Mountaineer sport utility this year and Grand Marquis sedan next year, the Mercury lineup would be down to just four derivative products –the Mariner compact SUV and the Milan midsize sedan, along with hybrid versions of both.

It’s a tribute to Mercury dealers that without any support from the parent company that they are able to sell as many cars as they currently do. As an example of the criminal neglect that Ford executives imposed on Mercury, consider that the Grand Marquis website hasn’t been updated since the 2008 model appeared.

Alan Mulally, Ford’s CEO, clearly signaled the end this morning while speaking to analysts when he said that he had nothing new to add on speculation that Ford is planning to shut down its Mercury brand after 71 years. Mulally said that Ford continues to look closely at its portfolio of brands and consider strategic options that would be good for business. So my take on this is it’s all over but the funeral.

Look for an upcoming detailed history and analysis of the tribulations and trials of Mercury since its extremely successful introduction as a 1939 model – 80,000 sales the first year in what was a much smaller, depression market then – from our resident expert, Mike Davis, aka Mercuryphile Mike.