FORD PULLS PLUG ON MERCURY
On June 2, 2010, Ford Motor Co. made it official and announced that it was dropping its Mercury brand at the end of the year. The 2011 Milan, Mariner and Grand Marquis will be the last Mercury vehicles ever.
The demise of Mercury, with its first cars produced for the 1939 model year, comes at the expense of Lincoln, which Ford decided to expand on as a premium offering to regular Ford models.
The announcement was not unexpected, with Mercury news being nearly non-existent since last summer and having minimal presence at car shows, while Lincoln news and showings proliferated.
Ford will expand and enhance its Lincoln brand lineup with seven all-new or significantly refreshed vehicles in the next four years as part of an aggressive growth plan aimed at competing with Cadillac and Lexus in North America.
The following is from Ford’s official statement regarding its decision:
Mercury originally was created as a premium offering to Ford and was an important source of incremental sales. However, the continued strength of the Ford brand – particularly the past three years – has accelerated the migration from Mercury to Ford for many customers.
Today, Mercury’s customer profile, pricing and margins are almost identical to Ford, but Mercury’s incremental sales have declined.
The majority of current Mercury sales are to fleet buyers and customers purchasing through employee, retiree and friends and family discounts, which Ford anticipates largely can be satisfied by Ford brand vehicles.
Of Ford Motor Company’s 16 percent market share in the U.S., Mercury accounts for 0.8 percentage points, a level that has been flat or declining for the past several years. That contrasts with the Ford brand, which has increased market share by 2.2 percentage points so far this year on the strength of new products and improved quality, fuel efficiency, safety, smart design and value.
Ford’s strengthening financial position – including the return to profitability and positive cash flow – allows the company to absorb short-term costs associated with the discontinuation of Mercury and to consolidate future product investments into Lincoln.
Today, there are no stand-alone Mercury dealerships in North America. Ford is working closely with dealers to maintain properly located stand-alone Lincoln or Ford-Lincoln dealers, which will offer dealers and the company the greatest opportunity for long-term profitable growth.
New operational standards developed with the company’s dealers will facilitate a Lincoln customer experience that exceeds the expectations of North American luxury customers.
Ford will work closely with Mercury dealers and customers during the transition, including providing existing Mercury owners with continued access to parts and service support at dealers and by honoring current warranties, including Ford’s Extended Service Plans.
“We are 100 percent committed to supporting Mercury owners through Ford and Lincoln dealerships and working hard to keep them as valued customers in the future,” Fields said. “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.”
Mercury owners will receive additional details in the coming days explaining the transition and assuring them that Ford and its dealers will continue to provide all necessary parts and service support for Mercury products.
Ford has notified Mercury dealers of the decision and provided details of a financial package that includes payment in exchange for resigning the franchise.
Ford has informed dealers of special offers on new Mercury vehicles that will be available through the summer to support the sell down of current Mercury inventory and remaining vehicle production.