NINETY EIGHT REGENCY

Doomed Mercury Brand Bests Lincoln Sales in June

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Doomed Mercury Brand Bests Lincoln Sales in June

By Byron Pope

WardsAuto.com, Jul 1, 2010 3:00 PM

Even as Mercury prepares to drive off the cliff, its sales are climbing.

Despite Ford Motor Co.’s recent announcement of the brand’s impending death, Mercury deliveries jumped 26.2% in June, compared with year-ago, to 9,250. The top-selling model was the Mariner cross/utility vehicle, which posted a 37.5% gain to 3,101 units.

Ford’s combined fleet and retail light-vehicle sales for the month rose 13.6% to 173,706 units on a daily basis, compared with year-ago, with 25 selling days this year and last.

Ford says it’s pulling the plug on the 71-year-old Mercury brand to focus more resources on the Lincoln luxury marque. If June sales are any indication, Ford has its worked cut out for it, as Lincoln deliveries dropped 11% to 6,318.

Ken Czubay, Ford vice president-sales and marketing, says Mercury’s strong sales in June largely were due to a concerted effort by dealers to begin selling down.

“Mercury sales went real well last month, and the sell-down is going slightly ahead of schedule,” he says in a conference call with analysts and journalists.

Ford says it is supporting the sell-down process, but declines to say if it’s doing so with incentives.

Czubay says the auto maker is well into the process of linking its 1,712 Mercury dealerships with existing Blue Oval franchises.

Mercury Mariner CUV sold 3,101 units in June.

“We’re ahead of schedule on that,” he says, noting the consolidation strategy was in place before Mercury’s demise was announced. “The pace has accelerated, but continues in a very orderly and constructive and collaborative way.”

Some Mercury dealers hail Ford’s decision to discontinue the brand.

“In my opinion, Mercury should have gone away a long time ago,” Ron Boyer, president of Courtesy Ford, Lincoln and Mercury in Portland, OR, tells Ward’s. “Its volume does not support stand-alone facilities, and it only cannibalizes sales of the Ford brand.”

But others warn of dire consequences.

“Mercury sales are very good right now and will most likely stay good until supply is gone,” says OC Welch III, president of OC Welch Ford Lincoln Mercury in Hardeeville, SC. He says his Lincoln and Mercury combined sales are up 141%, compared with year-ago.

“I think Ford will regret the decision,” Welch says in an email to Ward’s. “I don’t see anyone moving from Mercury to Lincoln, and very (few) moving from Mercury to Ford.”

Although Mercury is on the chopping block, with production to be wound down by year’s end, residual values are not expected to take a significant hit.

According to ALG, a firm that forecasts residual values for the leasing industry, Mercury should outperform most discontinued brands.

“Historically, the impact of brand termination on residual values averages about 5 percentage points,” Matt Traylen, ALG’s Chief Economist, says in a statement.

“But due to Mercury’s low volume and stronger demand indications prior to the announcement, we expect its residual values to be impacted by only 2.5 to 3 percentage points over the next 36 months, with the majority of the decline in the first 12 months.”

Ford officials, meanwhile, are predicting a gradual recovery in industry sales over the year’s second half.

Czubay says the auto maker will “have a tough time beating its first-half performance,” which saw sales grow 28% on a year-over-year basis. But upcoming product should help drive demand, particularly the upcoming Fiesta B-car.

“A new Fiesta is entering the market, and we don’t understand the full impact of this (segment) because it’s new to our dealers,” Cuzby tells analysts and journalists. “It’s a totally new customer that will be introduced to the Ford line of cars, and that will give us a basis for sustained growth.”

Also arriving later this summer are redesigned versions of the Ford Edge and Lincoln MKX CUVs.

Ford ended June with a 406,000-unit inventory, consisting of 136,000 cars and 270,000 trucks.

link:

http://wardsauto.com/home/mercury_lincoln_june_100701/

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ford will absorb a lot of those sales. its not like the mercury sales are as profitable as the lincoln ones.....

what lincoln needs now is the product to chase this.

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Except for the Lincoln Focus Cimarron though, I have heard of no new product coming for them. They will languish and eventually die because Ford will continue to produce Lincolns as thinly veiled Fords. It worked for Mercury to an extent... but for a luxury brand? I doubt it.

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yeah but the MKs and MKt are sweet cars once you get inside. i do not have drive experience in either. I would guess an ecoboost TT MKs for most folks vs. a paltry 300hp CTS if you can get the buyer inside both and get them to drive them, the MKs may surprise more than a few with its cush factor. MKt makes fat overpriced pigs like the Q7 seem worthless. MKx gets fixes this fall. MKz IMO has always been one of those WTF type of vehicles but in patches it seems to sell, why I do not know. At least Ford has tried to fix things on it. And now it has a hybrid.

The MKR IMO is the missing link, and perhaps the MKZ needs to downsize a bit and become that real true boutique poseur lux car. To some extent maybe the MKZ can morph into what the Milan was and cover that turf with a base version.

It is a shame the Milan and Mariner will be gone. But if Ford was gonna do this anyways, then get it over now I suppose.

I just hope the Navigator continues on. I love the Navigator, more than the Escalade. Not that its better, just that its more unique.

Lincoln would indeed need an iconic model and like a sports coupe / convertible IMO. Something like a 21st century town car although i have no idea where they would get that from and the MKs is pretty nice as it is.

Lincoln really shouldn't be aiming for huge volume. As a brand yes they need to move enough units to justify the separate brand, dealer base, and models. But I think Ford can pull this off. Maybe 6 or 7 models. Biggest volume cars in the Lincoln stable would probably be the MKS and the MKZ. Over time it would be nice to see the MKR be the sales king. If Ford can move 160,000-200,000 Lincoln units a year they'd be giddy. Maybe 130,000 is more realistic.

MKS - 40k

MKZ - 30k

MKX - 25k

MKR - 25k

Navigator - 20k

MKT - 15k

sports coupe / cvt - 5k

you know that is being optimistic but a business plan could address how all this would play out.

What Lincoln needs, a new style direction, and something stunning, and apart from Ford.

Edited by regfootball

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^ interesting post, regfootball

got me scribbling down numbers & looking up sales stats

tho I wonder if you mislabeled your models since the Z & X have been the best sellers

& for the nearterm I'd expect that to continue

but

what I'm wondering more is

IF the GRwdP comes out, which type of sedans(/coupes) have greater sales potential

and just how successful an ideal Lincoln lineup COULD BE number-wise

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Lincoln would indeed need an iconic model and like a sports coupe / convertible IMO. Something like a 21st century town car although i have no idea where they would get that from and the MKs is pretty nice as it is.

now what in your opinion is a 21st century town car?

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