Ford killing Mercury brand, boosting Lincoln

[R-Design]

Lincoln to get new products & targets Lexus. Could GRWD be back on the cards?

Originally Posted by by Peter Valdes-Dapena

NEW YORK (CNNMoney.com) -- Ford Motor Co. announced Wednesday it is killing off the slow-selling Mercury car brand after 71 years. The move had been widely expected as Ford has revealed few new products for the brand in recent years.

Winding down Mercury will allow the automaker to focus more attention on its mainstream Ford brand and especially its luxury Lincoln brand, Ford executives said.


2010 Mercury Milan
"We decided we're going to focus our efforts and resources on continuing to grow the Ford brand and accelerate Lincoln," said Mark Fields, Ford's president of the Americas, in a press conference at Ford's Dearborn, Mich., headquarters.

Ford will end production of Mercury products by the end of this year.

Over the next several years, Lincoln will get seven all-new or drastically changed vehicles, Derrick Kuzak, Group Vice President, Product Development, said.

No jobs will be lost at Ford (F, Fortune 500) because of the brand's closing, Fields said. He would not say how much the brand closure will cost, but that it will not change the carmaker's financial projections. Ford has said it expects to make a substantial profit this year.

What's a Mercury?
Henry Ford's son, Edsel, started the Mercury brand in 1939 when he was president of the company. Mercury was seen as a way to fill the pricing gap between the inexpensive Ford brand and the luxury Lincoln brand.

Unlike his father, Edsel believed in the importance of design in automobiles, and Mercury offered customers something a little more stylish than a Ford, often with a little more performance too.

Sometimes Mercury sold truly distinct models that weren't otherwise available in U.S. showrooms, but in most cases, Mercury cars were slightly upgraded versions of Ford models with more fashion-oriented color and trim choices.

While Ford brand market share grew 2.2 percentage points this year, Fields said, Mercury market share declined to just 0.8% of the overall market.

"We've seen a migration of Mercury customers coming over to Ford," Fields said.

Most Mercury sales are to fleet buyers and customers purchasing through employee, retiree and other company-related discount programs, Fields added.

Dealer impact
1,712 dealers in the U.S. sell Mercury cars, but all of them also sell other Ford products.

The loss of Mercury will pose no problem for dealers who also sell Ford brand cars, since the vehicles are very similar, said Bob Tasca, who chairs the Lincoln Mercury dealer council. It will be a problem for those who sell only Lincoln, as it will leave them without the smaller, less expensive vehicles Mercury offered, he said.

Among the vehicles Lincoln will offer in the future will be a compact car, Kusak said.

Ford will offer assistance to Lincoln-Mercury dealers in areas that won't support a luxury-only dealership, Fields said. Those dealers will be offered the opportunity to sell Fords, if that can be done, or their dealerships will be consolidated with an existing nearby Ford dealership and they will be financially compensated.

"If we can get great products from Ford and we can get throughput, I don't care what they call the vehicles," said Tasca "A sale is a sale."

Ford-Mercury dealers are excited about the change, Tasca said.

"When you've got Fords and Mercurys on the same lot, and they look kind of the same, that doesn't really make a whole lot of sense," he said.

An increasingly irrelevant brand
At one point, Ford might have saved the Mercury brand and put it to good use, but making the brand meaningful was something the automaker should have started years, if not decades, ago, said Jeremy Anwyl, chief executive of the auto Web site Edmunds.com.

"Through lack of attention the brand has lost relevance in the marketplace," he said, "and you can change that, but it's not cheap."

A good, strong Mercury brand could have added sales and value, according to Anwyl, but it's too late now.

Mercury might have had some meaning to customers long ago, agreed Jesse Toprak, an analyst with the auto Web site Truecar.com, but not anymore.

"I don't think anyone under the age of 50 even understands what the heritage is," he said.

Killing the brand now follows Ford chief executive Alan Mulally's strategy of focusing the company's resources on its core "Blue Oval" Ford brand. Ford has already sold off luxury car brands like Jaguar, Land Rover and Aston Martin. It is in the final stages of selling off Volvo.

General Motors has had success by trimming what had been eight brands in the U.S. down to just four. GM sales were up 17% in May compared to last year, despite the contraction in brands.

"We saw with GM what Ford can create by contracting to two core brands," said Toprak.

Ford Motor reported a 23% rise in May sales at the three brands it retains.

In contrast to Mercury, Lincoln will get more new products, some with engines and transmissions exclusive to the luxury brand. Ford also promised "fuel economy leadership" for each of the Lincoln products. With its new line-up, Lincoln will be squarely targeted at luxury competitors such as Lexus and Cadillac, Fields said.

http://money.cnn.com/2010/06/02/autos/mercury_dead/

[irlewy86]

Originally Posted by ARTICLE

In contrast to Mercury, Lincoln will get more new products, some with engines and transmissions exclusive to the luxury brand. Ford also promised "fuel economy leadership" for each of the Lincoln products. With its new line-up, Lincoln will be squarely targeted at luxury competitors such as Lexus and Cadillac, Fields said.

Unique engine and transmisson lne-ups, hey?

[R-Design]

Originally Posted by irlewy86

Unique engine and transmisson lne-ups, hey?

I'll be interesting to see how the AU media report this. Will it be doom and gloom "Ford Closes Brand, Australian arm could be next?", or positive "Ford invests in Lincoln brand, Aussie Falcon may Fly Overseas!".

Edit: The Lincoln / Lexus connection makes me think of Mulally's reaction to driving the G6ET prototype:

Originally Posted by GoAuto

Ford Australia product development vice-president Trevor Worthington told GoAuto about what happened when the ex-Boeing boss called in to check on some FG prototypes at the You Yangs test centre last year, including the new G6E Turbo.

“He went and sat in it and I sat next to him. He is a very considered guy and he sat there for 10 seconds and he said: “There is nothing like this in our company.”

Mr Worthington agreed, before Mr Mulally said: “I want one”.

When Mr Mulally was at Boeing he drove a Lexus, reportedly because he liked the look and feel of the car.

“So when he sat in that (FG Falcon) car and then drove it, he said it was as good as the Lexus he had,” Mr Worthington said.

Mr Mulally was also impressed by the performance of the 270kW boosted Falcon.

“This car had a level of performance that he had never seen before,” Mr Worthington said.

After a rapid test drive, Mr Mulally added “It must be very easy to get tickets in this car.”

Mr Worthington compared the premium Falcon to the Lexus GS which he said was all about a particular look and feel with adequate performance, while the new G6E Turbo “is about the look, the feel and performance that will blow your head off,” he said.

http://www.goauto.com.au/mellor/mell...2573F300206152

[chevypower]

Unique transmission, I see the ZF 8 speed (or a Ford-built 8 speed) for Lincoln, and not necessarily for Ford yet. Unique engine? 3.7L EcoBoost? 4.4L V8 diesel for the Navigator and ZF 8 speed like in the Range Rover maybe.

[JPFS1]

hrmmm...

[T3ts50]

Its about time they improved on Lincoln. There vehicles are rather boring compared to that of some of the Caddies that are out at the moment IMO.

[BeansNoMore]

Im not surprised.

I did however hire a Mercury Milan 4 weeks ago, for a week whilst in the States and apart from the stylish but illegible instuments, absolutely loved it - much to my surprise. Of the 5 cars I hired in the States I loved it the most - by far. High quality, taught body, firm ride and roomy - for its class. Styling though was inoffensive, no boring - and that probably sums up the brand too.

[TUF_302]

Good idea i believe, focus efforts on the big top Luxury brand, no point in having Mercury if its not doing anything for the company

[Brazen]

Unfortunately not enough room for mid-tier brands nowadays especially as basic brands move upmarket and high-end brands move down into cheaper segments.

Mercury would have been squeezed from both sides - by better Ford products which can command a premium, and Lincoln's move into more fuel efficient or smaller size segments.

[Polyal]

Yeap the only good thing to come from Mercury was the cougar, and not the modern on but the 69/70's one!

[EgoFG]

a "GM is Dead" thread in V8Central would set a cat among the pigeons ! (referring, of course to the Mercury - Grand Marquis) ... or is that a pigeon among the cats ?

That GM, btw is the second nicest American Car I have ever driven

[chevypower]

http://www.mercuryvehicles.com/allvehicles.asp

Just looking at that, it could be 1997, you can't tell. It certainly doesn't look current.

[irlewy86]

Originally Posted by chevypower

http://www.mercuryvehicles.com/allvehicles.asp

Just looking at that, it could be 1997, you can't tell. It certainly doesn't look current.

A few more years and they could have called it a "retro styled classic"

[R-Design]

Originally Posted by 4 June 2010
By TERRY MARTIN

Going gone: Ford's Mercury brand is set to fold, taking cars such as the Mercury Milan Hybrid with it.
Mercury to be axed by Ford as it gets set to expand Lincoln with first small car
THE Ford Motor Co has confirmed it will discontinue its Mercury brand after more than seven decades as a premium offering for the Blue Oval, consigning it to automotive history to join other defunct Detroit brands such as Pontiac, Oldsmobile and Saturn.

The American auto giant said its decision to end production in the final quarter of 2010 was based on a sustained sales downturn for Mercury, which now accounts for just 0.8 per cent of Ford’s 16 per cent share in the US.

It also said Mercury’s customer profile, pricing and margins were now almost identical to Ford.

In contrast, the Ford brand’s share has improved 2.2 percentage points in 2010 as a result of new products and “improved quality, fuel efficiency, safety, smart design and value”.

As a result, the company will throw more resources into the Ford brand and expand its luxury brand Lincoln with seven all-new or upgraded models over the next four years, including its first-ever small car.

Ford’s group vice-president of global product development Derrick Kuzak said the C-segment car would be based on the same architecture as the new-generation Ford Focus due in 2011, although it would have design and engineering attributes specific to Lincoln.

The confirmation that Lincoln would produce a small car comes almost two-and-a-half years after it presented the Lincoln C (for C-segment) concept car at the Detroit motor show in January 2009.

The aim is for Lincoln to be on an equal footing with Cadillac and Lexus in North America, with its share of the US luxury vehicle market continuing to grow. At the end of the first quarter of 2010, Lincoln held a 6.3 per cent share, up from 4.5 per cent in 2005.
Left: 1939 Mercury. Below: Lincoln C concept.
To do this, Ford plans for Lincoln to offer advanced design and showcase its latest hi-tech and engineering achievements, including adaptive computer-controlled suspension, electronic push-button gear selectors, active noise control, fully retractable glass roofs and ‘MyLincoln Touch’ driver connect technology.

The latter will debut later this year with the updated 2011 MKX crossover, which will join recent showroom arrivals including the redesigned MKS large sedan and MKT seven-seat SUV, and a facelifted MKZ medium-sized sedan.

A hybrid version of the MKZ is also due in the final quarter, and Ford is already proclaiming it as “the most fuel-efficient luxury sedan in America”.

Lincoln will also receive new powertrains, including an all-new V6 engine and “advanced fuel-efficient transmissions”. EcoBoost engines will be available across its model range, and Ford is determined that Lincoln will emerge as “the most fuel-efficient luxury line-up on the market”.

More than 1700 dealerships will now begin to wind down their Mercury operations, although none of these are standalone retail outlets. Most are combined with both Ford and Lincoln franchises, although those that are combined only with Lincoln might be forced to consolidate with a Ford dealership.

Ford president and chief executive Alan Mulally said the company’s strengthening financial position – including the return to profitability and positive cash flow – allowed it to absorb short-term costs associated with the discontinuation of Mercury and to consolidate future product investments into Lincoln.

“Profitably growing Lincoln in North America is an important part of our One Ford plan,” said Mr Mulally. “Our Ford brand is gaining momentum and winning customers around the world.

“Now, we are going to use the same laser focus to further strengthen Lincoln and deliver even more products luxury customers really want and value.”

Ford claims that the continued strength of its own brand, particularly during the past three years, had accelerated the migration from Mercury to Ford “for many customers”.

It said most Mercury sales were to fleet buyers and customers purchasing through employee, retiree and friends and family discounts, which it anticipates “can be satisfied by Ford brand vehicles”.

Warranties and extended service plans for Mercury owners will be honoured, and run-out deals have already begun to shift cars from showrooms.

Ford’s president of The Americas Mark Fields said the company was “100 per cent committed to supporting Mercury owners through Ford and Lincoln dealerships and working hard to keep them as valued customers in the future”.

“At the same time, we will work closely with our dealers to phase out Mercury franchises and continue to build a healthy, growing Lincoln with strong new products and a profitable dealer network that delivers a world-class customer experience,” he said.

“We are taking decisive action and moving into the future with the right plan to deliver profitable growth for all stakeholders. These moves position us to continue building momentum through strong brands, great products and an unwavering focus on the customer.”

Mr Fields added that the time had come for the company to profitability grow the Lincoln brand as it had done with Ford.

“The new Lincoln vehicles will transform luxury for North American premium customers through an unexpected blend of responsive driving enjoyment and warm, inviting comfort,” he said.

“We will also offer our customers a world-class retail experience through a vibrant retail network.”

Mercury was established in 1938 and its first model, the Mercury 8 – complete with a 95hp V8 engine – went into production that same year. It retailed for $US916 and Ford sold more than 65,000 of them in its first year.

The height of Mercury’s success came in 1953 – three years after Ford had produced its millionth car under the brand – when it held a five per cent share of the US market.

http://www.goauto.com.au/mellor/mell...25773800191A27

[vztrt]

http://www.autoblog.com/2010/08/11/r...lement-payout/

Report: Mercury dealers want larger settlement payout

by Chris Shunk (RSS feed) on Aug 11th 2010 at 8:28AM

Mercury is two months away from execution, leaving the brand's 1,700 dealers in a pretty tough spot. Essentially, they've got three choices: Agree to Ford's terms and walk away, negotiate and walk away, or pick a legal fight with The Blue Oval. Automotive News reports that about 1,000 dealers still haven't signed FoMoCo's compensation agreement and some of those dealers reportedly stand to lose millions of dollars in the deal.

Dealer lawyers claim that compensation has ranged from between $100,000 and $800,000, depending on a number of factors, including the dealer's dependence on Mercury sales and the average amount of vehicles sold over a three year period. A princely sum, sure, but it won't help some of the dealers who count on Mercury for 50 percent of sales or more. AN reports that Ford acknowledges that some dealers are in markets that cannot support a Lincoln-only store, but the company claims to be working with dealers to get them to sell Fords or sell the remaining Lincoln store to an existing Ford dealer.

Ford will stop producing Mercury-branded vehicles in early October, and while some dealers are picking up as many vehicles as possible, others have stopped ordering vehicles altogether. And until they sell out of their Mercury stock, Ford won't cut dealers a compensation check.

[Source: Automotive News - Sub. Req. | Image: AP Photo/David Zalubowski]