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Mercury lineup could begin dwindling away soon

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Mercury lineup could begin dwindling away soon

Jamie LaReau

and Amy Wilson

Automotive News -- May 31, 2010 - 12:01 am ET

DETROIT -- Ford Motor Co. plans to kill the 71-year-old Mercury brand slowly by starving it of product, two sources tell Automotive News.

Ford leaders plan to propose eliminating Mercury to the board of directors in July. They believe Ford no longer can justify the cost of supporting Mercury in light of the brand's declining volume, the sources say.

The company has been laying the groundwork for eliminating Mercury for years.

Decades ago, Lincoln dealers were encouraged to add Mercury franchises to give them the volume they needed to survive. In recent years, Ford has pushed consolidation of those dealerships into Ford-Lincoln-Mercury stores. Those dealers now derive their volume from Ford brand sales.

At the end of 2009, Ford Motor had 1,780 Mercury franchisees, but there were only 292 stand-alone Lincoln-Mercury stores. There are no stand-alone Mercury stores. Lincoln-Mercury dealers sold 175,146 vehicles in 2009; only 92,299 were Mercurys.

Ford also has eliminated separate Ford and Lincoln Mercury divisions within the company. It has merged the Ford and Lincoln Mercury dealer councils. Some Mercury franchisees say that Ford has stacked the Lincoln Mercury side of the council with dealers who also have Ford stores.

"They were at least signaling this a year or so ago," says a Ford dealer who asked to not be named.

Another hint was Ford's exclusion of Lincoln-Mercury dealers at a recent dealer meeting in Detroit, some dealers say. Ford says it will hold a meeting for Lincoln-Mercury dealers this fall.

Still, some Mercury dealers were surprised by the news.

"We're totally blindsided if this is true," says Dan Pfeiffer, owner of Pfeiffer Automotive Group in Grand Rapids, Mich., where he sells Lincoln and Mercury vehicles. "It shakes your faith in Ford Motor Co. if they do that without even the dealers knowing about it."

As of Friday, May 28, Ford had not sent a statement to dealers or arranged a conference call with them to address the issue, which surfaced earlier in the week in news reports. Ford spokesman Mark Truby said Ford's plans for Mercury were unchanged, but he added, "We constantly assess our business portfolio."

No Mercury Kuga?

Mercury currently sells four models: the Milan and Grand Marquis sedans, the Mariner crossover and the Mountaineer SUV. Two of those could be gone soon.

Ford is expected to introduce a slightly smaller, redesigned Ford Escape crossover for the 2012 model year based on the next-generation European Kuga. That would be a convenient time to discontinue the Escape's sibling, the Mercury Mariner, a source says.

Ford had planned to revive the Tracer name with a Mercury version of the Focus small car early next year. Both sources say that car is likely dead. Ford is expected to drop the Mountaineer SUV this year. In 2011, the Grand Marquis is expected to die, and the plant that builds it will cease operations. That would leave Mercury with just the Milan sedan.

Lincoln and Mercury's combined sales each of the last two years was less than a plant's worth of production. Mercury's sales have fallen 74 percent since 2000.

Ford simply doesn't have a business case to justify the cost of maintaining a separate organization, marketing and advertising for Lincoln Mercury's small levels of production and sales, one source says.

Damage to dealerships

Some Lincoln-Mercury dealers are angry and worried about their future. If Ford kills the brand, they fear the value of their stores will plummet and their ability to leverage the Lincoln Mercury assets to buy a Ford shingle will be severely compromised. They also worry about selling current inventory now that rumors of the brand's demise are out.

"It's certainly a misfortune that this news comes out," says Ed Witt, owner of Witt Lincoln-Mercury in San Diego. "Whether it's on purpose, by accident or a leak, it was by no means the way to treat the public or the dealer body."

But Witt is optimistic Ford will offset the loss by investing in Lincoln.

The biggest issue Ford would face in dropping Mercury is figuring out how to pair Ford dealerships with the remaining Lincoln franchises, says a source. Ford doesn't want Lincoln-Mercury dealers to die without giving them a chance to make deals for survival by selling to a Ford dealer or acquiring a Ford franchise.

Leaking Mercury

Remaining Mercury franchises increasingly are part of Ford-Lincoln-Mercury stores. There are no stand-alone Mercury stores.

Year end 2008 Year end 2009

Mercury franchises 1,827 1,780

Lincoln-Mercury stand-alone stores 357 292

Source: Ford Motor Co. SEC filings and Automotive News

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100531/RETAIL03/305319956/1256#ixzz0pVnxt9Tv

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just to set the record straight 1.gif

Mercury lineup could begin dwindling away soon

Jamie LaReau

and Amy Wilson

Automotive News -- May 31, [2000 - 12:01 am ET

DETROIT -- Ford Motor Co. plans to kill the 61-year-old Mercury brand s-l-o-w-l-y by starving it of product...

since 2000 is about how long this cr@p has been going on...

...and Mercury STILL outsells Lincoln!

rant.gifmad.gifrant.gifmad.gifrant.gifmad.gifrant.gifmad.gifrant.gifmad.gifrant.gifmad.gifrant.gif

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Ford Plans to Kill Storied Mercury

By MATTHEW DOLAN

Ford Motor Co. is preparing to phase out its 71-year old Mercury brand, adding to the list of storied Detroit nameplates that reached the end of the road in recent years as the industry has become more competitive.

Ford Chief Executive Alan Mulally and his top lieutenants have won the backing of key members of the Ford family and are expected to seek approval from the car maker's board to kill Mercury after years of dwindling sales, a person familiar with the matter said Thursday.

Mercury was created in 1939 by Edsel Ford, the son of legendary founder Henry Ford. It was prompted by General Motors Co.'s strategy of building a "ladder of brands" that included Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac. That allowed GM to appeal to a wide range of customers and move them up the brand and price ladder as their incomes rose, enabling GM to pass Ford as the world's largest auto maker.

Mercury would be the latest Detroit brand to die since 2000. As part of its bankruptcy restructuring last year, GM shut down its Pontiac and Saturn divisions, and Hummer appears to be headed for the same fate. Earlier this decade GM phased out Oldsmobile and Chrysler Group LLC killed off Plymouth.

Mercury's future has been in question ever since Mr. Mulally arrived as CEO in 2006 and mapped out a turnaround plan that called for phasing out niche brands and putting most of the company's resources into its Ford division. Since then, Ford has sold Jaguar, Land Rover and most recently Volvo.

A person familiar with the company's plans said Mr. Mulally and other senior executives recently persuaded the company's chairman, William C. Ford Jr., and a cousin of his who works at the company, Elena Ford, to phase out Mercury. Elena Ford had strongly opposed previous efforts to shut down the brand.

News of the plan was first reported by Bloomberg News.

Mercury was supposed to give Ford a midpriced car that fit between the inexpensive Ford models and its more luxurious Lincolns.

For several decades that strategy seemed to work, with Mercurys such as the Cougar and Marquis selling well. But by the 1980s Mercury had little identity of its own—a problem that would become endemic for most of Detroit. Most Mercury models were simply Fords fitted with different grilles and tail lights. GM did the same, fielding nearly identical cars as Buicks, Chevrolets, Pontiacs and Oldsmobiles.

In the 1990s, Ford imported sporty cars made by its European arm and sold them under the Mercury nameplate, but the effort did little to raise the brand's profile.

In recent years, Ford tried to market Mercury to women drivers, but sales continued to dwindle. In 2009, Ford sold 92,299 Mercury vehicles, down from 359,143 in 2000.

"Mercury is a brand that has lost its meaning in the American automotive marketplace and it isn't worth trying to change that," Edmunds.com CEO Jeremy Anwyl said in a statement.

Under Mr. Mulally, Mercury received few new models. The Sable sedan—a knockoff of the Ford Taurus—was phased out in 2009 and production of the Mountaineer sport-utility vehicle and Grand Marquis large sedan will end this year.

That leaves Mercury with only two models: the Milan, a midsized car, and the Mariner, a small SUV. Ford planned to launch a Mercury version of its Ford Focus compact, but Mr. Mulally was faced with deciding whether it would be worth investing more in the marque.

Ford spokesman Mark Truby declined to confirm any discussions about the end of Mercury.

Stephen Munroe, general manager of Statewide Ford Lincoln Mercury in Van Wert, Ohio, said he was untroubled by the news. He said it would simplify his inventory since many of the Mercury cars have "sister" vehicles in the Ford brand.

The challenge, Mr. Munroe said, would be to eliminate Mercury without hurting the current good consumer buzz about Ford.

But the hundreds of dealers that sell only Lincolns and Mercurys may find it difficult to continue without the volume from Mercury. A person familiar with the matter at Ford said the company hopes to merge many of those dealers with existing Ford dealerships or shut them.

Mercury had 1,780 U.S. dealers at the end of 2009, according to a Ford filing with the Securities and Exchange Commission.

Ford officials also are engaged in an intense review of the future of Lincoln, which has struggled as well despite its fairly new line-up. A separate person familiar with the company's thinking said all options are under consideration for Lincoln, which hasn't measured up to becoming a luxury brand able to compete with Mercedes, BMW, Lexus or the revitalized Cadillac.

—Neal E. Boudette and Jeff Bennett contributed to this article.

link:

http://online.wsj.com/article/SB10001424052748704269204575270822363686774.html?mod=WSJ_latestheadlines

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Hard to believe: I missed many brands demises: Edsel, DeSoto, Imperial, Hudson, Nash, Studebaker, Packard.... never thought I would see a time where I would see Olds, Plymouth, Pontiac & Mercury go.

Shame too; "Mercury" is such a great sounding name.

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I guess the Lincoln MKZ hybrid can absorb a lot of those millan hybrid sales. That should let them build more MKZs since they were worried about the quantity of hybrid powertrains they could make.

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