Ford Motor Company Plans To Remove Mercury Brand

ford-motor-co-plans-to-eliminate-its-mercury-brandFord Motor Co. will cease production of its 72-year-old Mercury brand by the end of 2010 after years of declining sales and investment plummet. Mercury vehicles often were little more than rebadged Fords, and sales declined since 1993. Perhaps Mercury’s best vehicles came in the 1960s, when Cougars, Comets and Marauders rumbled down the road with big engines. The biggest volume year came in the next decade — 1978, when Mercury sold 580,000.

Mercury’s death is the latest in a string of casualties as Detroit car makers try to cut costs and invest more heavily in fewer offerings. By shedding a mid-range brand that was more and more irrelevant to buyers, the automaker can focus on accelerating sales of Ford and beefing up its luxury Lincoln brand.

Ford plans to expand its Lincoln lineup to make up for lost Mercury sales and support Lincoln-Mercury dealers who will suddenly be without a brand. Derrick Kuzak, Ford’s product development chief, said Lincoln will have seven new or revamped vehicles in the next four years, including the brand’s first compact car.

The automaker’s board of directors approved ending the brand Wednesday morning. Ford Americas President Mark Fields said the decision was made this spring as part of an annual business review. He said Mercury’s sales make up such a small percentage of North American market share — less than 1 percent, compared with Ford brand’s 16 percent — and that the profile of Ford and Mercury shoppers is so similar, it makes more sense to focus on Ford and Lincoln.

The move should help the Ford brand. Mercury was the No. 1 brand that was also considered by Ford buyers, said Aaron Bragman, an analyst for the consulting firm IHS Global Insight. Ford said 53 percent of Mercury shoppers consider Ford and Lincoln. Ford said it will offer discounts through the summer on Mercury vehicles to shed inventory.

Ford shares rose nearly 4 percent to close at $11.85.

Ford Americas President Mark Fields said Mercury’s sales make up such a small percentage of North American market share — less than 1 percent, compared with Ford brand’s 16 percent — and that the profile of Ford and Mercury shoppers is so similar, it makes more sense to focus on Ford and Lincoln.

Lincoln has struggled to find its place in an increasingly crowded luxury market.The best outcome here would be that consolidation helps Ford (and other American carmakers) produce quality, attractive cars again. So far, it’s looking promising. It will be especially encouraging if manufacturers can increase their electric and hybrid offerings to compete with other global automakers.