Ford to kill off Mercury after 72 years
BY TERRY MARTIN | 4th Jun 2010
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.
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.
