kansaiwalker1

11 March 2005

Sajeev Mehta

We have seen a few memorable quotes about the future of Mercury (which also applies to Lincoln) from the people in charge of its destiny. Let's start with Mr. Bill Ford. Months ago, Autoweek magazine interviewed Mr. Ford on the task of turning around Ford's finances. Though Mr. Ford had plenty of talking points to reassure us of the clear vision for PAG (specifically Jaguar) he had a single reply to the "definition" of Mercury:

"If you look at the demographics, it appeals more to women than the Ford brand. It certainly has different styling, more features, and it really provides Lincoln-Mercury with the volume they need to be successful." Bill Ford, Autoweek Interview, 12/2004

My apologies to Mr. Ford if there was more to this discussion than we read, but its hard not to question those demographics when applied to the highly competitive global market that these tarted up Fords have to do battle in.


Mr. Ford: Mercury's demographic can spot Badge Engineering from a mile away…


Mr. Ford alluded to the more upscale waterfall grille and fancy taillights of new Mercs., but let's get real here: there isn't a single Mercury in the showroom right now that doesn't scream "cheap makeover." Hoods, trunks, dashboards, fenders, steering wheels, interior panels and trim are all lifted from a Ford product. The demographic Mr. Ford mentioned can spot this cost cutting from a mile away, or from the Toyota dealership across the street. That is, if they care to turn their head in the direction of a Lincoln-Mercury dealer.


There have been rare occasions when Mercury has got it right: they built a product that was obviously influenced by others, but was redefined to make an entirely fresh vehicle. It is hard to be fresh when you are based on the Taurus, but the 1986 Sable did just that. No exterior part was shared, except the doors. Very little on the inside was shared either. Its unique style influenced almost every other Mercury product in the lineup, creating the strongest Mercury DNA to date. And Mercury salespeople must have loved telling customers that the Sable was significantly more aerodynamic than the already slick Taurus. (.29 vs. .32 cd).


Even Matchbox liked this Mercury enough to immortalize it in die-cast metal, alongside the 1984 Corvette and Ferrari Testarossa. While no exotic, Matchbox has firmly made the Sable one of the coolest rides of the 1980s. What you see here is a properly tarted up Ford, a car that truly "provides Lincoln-Mercury with the volume they need to be successful." But as quickly as the badge engineered Mercury went away, it came back with a vengeance.


Though Mercury dealers would love to end the badge engineering dynasty, a modern day 1986 Sable ain't gonna happen. But can we start small; giving Mercs. a unique steering wheel for their unique DNA we keep hearing about? Even the Buick W-body sedans have been blessed with enough unique parts to keep the Lumina/Impala references at bay for the past 16 years.


Defining Mercury: Are these new Ford platforms clouding this definition and saturating the market?


Depending on which article you read, either the new Montego/Five Hundred is selling well (the AWD model being out of stock in many dealers) or dealer inventory is too high even with low factory utilization.

"It's a car people want, not a car we have to work hard to sell." Darryl Hazel, Lincoln-Mercury President, Chicago Tribune 1/2005

Those who read Blue Oval News know that the Chicago plant is currently running well below capacity, so odds are that the truth is closer to the bad news on this chassis. Hopefully the mixed messages will end soon. Though AWD Montegos are sold out almost everywhere (reportedly due to lack of inventory from a parts supplier), we must question the whole move to AWD to entice Mercury's target market…


Mercury wants AWD, but can you keep/grow the definition of Mercury without RWD?


Even with AWD and bigger rebates than a Toyota Avalon, the replacement Grand Marquis (or Town Car vs. a comparable Lexus) will have a hard time getting the demographic they want to the extent the brand deserves. Top management obviously disagrees with RWD being a definition of Mercury, much less a sustainable competitive advantage in this market.

"A certain number of people are wedded to keeping it rear wheel drive, but AWD would create more buzz." Darryl Hazel, Chicago Tribune 1/2005.

I have spoken before of those who are the Keeper of the Flame, and as a Detroit outsider I only hoped you existed in the Lincoln Mercury division. This quote is proof enough that the Flame is still there, and that you might get to make the cars that YOU want to drive. For it is you, the Keeper of the Flame, who make the cars WE want to drive.

Rest assured that Chrysler's RWD chassis has more "buzz" than any AWD car that Mr. Hazel can muster up to replace the Grand Marquis. And that buzz certainly aided the $1.9 billion profit of Chrysler. Considering that the 300c still sells for close to MSRP with no rebates and half of production is the HEMI, odds are that the majority of America still loves traditional cars with a modern twist. Knowing this, why would you willingly kill the Grand Marquis/Town Car when it is the best winning streak in your 60+ year history? Hasn't this car been so good to you, after 26 years on the market, that it deserves a complete redesign (and the fruits of that labor) like the Corvette C5 of 1997?

There is nothing wrong with admitting that the Grand Marquis/Town Car is your Halo car, the car that draws traffic into a dealership and makes people want to buy Lincoln-Mercury. Like the C4 Corvette in 1996, your Halo needs a lot of polishing right now.

Not only is AWD the wrong move for your Halo car, it is more expensive to make, more costly to repair, adds weight, and lowers fuel economy over a similar 2WD vehicle. Nor is AWD a great selling point considering how effective modern stability control systems and all weather tires (or a second set of wheels with Bridgestone Blizzak snow tires) are these days. Lastly, since Mercury has no plans for a high performance powertrain, their AWD marketing strategy certainly cannot be used to appeal to Subaru or Audi demographics. Which demographic really wants this car?


Living in Houston, I have only seen the "Weatherman hit by a snowball" ad for the Montego. Maybe the marketing buzz that defines the new Mercury does not apply to me or anyone else in my city of almost 2 million, since I have only seen one Montego (and three Five Hundreds) on the road to this day.

So will passionless, badge engineered, AWD force even more Mercury loyalists into Chrysler dealerships, or will these new cars really sell?

Conclusion

While Ford's acquisition of Mazda and Volvo will help bring new cars to market both cheaper and faster, we have to wonder if throwing all of them in Lincoln-Mercury's lap is really going to open new doors, as the new marketing tag line suggests. If RWD is killed, the new Grand Marquis/Town Car may close the most profitable door Mercury has ever seen. Remember Ford's talk of killing the RWD Mustang and replacing it with the car that became the 1989 Probe? We all know that story had a happy ending, thanks to a loyal fan base.

If you sat in the new 280hp Avalon at the auto show, one look inside told you that Toyota is serious about making a car to appeal to conservative buyers, it looks nothing like a Camry and feels like a high end luxury car. When the AWD Grand Marquis/Town Car replacement (with a Ford steering wheel, for sure) is up against the Avalon, it will have a tough battle appealing to anyone but the Ford loyalist living in the rust belt.

Yes, RWD is a HUGE selling point in this market! To a lesser extent, body-on-frame construction is a competitive advantage since nobody else can make it, or top its record of durability. Who knows? It may "open new doors" with a fresh crop of customers who never experienced the virtues of RWD with a V8 for under $30,000. Kind of like the new Mustang has for Ford dealers. Mercury deserves that.

Thanks for reading, have a good week!

References:

Negative Montego Information: http://www.freep.com/money/autonews/ford6e_20050106.htm

Positive Montego Information: http://www.chicagotribune.com/classi...4886554.column

Autoweek interview with Bill Ford: http://www.autoweek.com/news.cms?newsId=101343

Updates at www.BlueOvalNews.com

Loseit

iTrader: (1)

Yeah, i don't understand ford's thinking. Those cars sell well as they are right now. Just give them a 21st century redo!!

TSX69

Ford Said to Plan End of 4gotten Mercury after 7 Decades

May 27 (Bloomberg) -- Ford Motor Co. is preparing to wind down the Mercury line, created in 1939 by Edsel Ford, after sales plunged 74 percent since 2000, said two people familiar with the plan.

The automaker’s top executives are preparing a proposal to kill Mercury to be presented to directors in July, said the people, who asked not to be indentified revealing internal discussions. Mercury, losing two of four models next year, will be starved of products and promotion, the people said.

Chief Executive Officer Alan Mulally emphasized the automaker’s namesake brand as he revived the only major U.S. automaker to avoid bankruptcy. The timing of Mercury’s demise depends on how fast executives can convince the brand’s dealers, who also sell Lincoln models, to close or merge with Ford showrooms, they said.

“Mercury is a forgotten brand,” said John Wolkonowicz, an auto analyst with IHS Global Insight in Lexington, Massachusetts. “Many Americans probably already think it has been discontinued. Mercury was too similar to Ford from the very beginning.”

Mulally also is unloading Ford’s European luxury brands, after the automaker failed to achieve a goal to have them generate one-third of automotive profits. Ford in March agreed to sell Volvo to China’s Zhejiang Geely Holding Co. It sold off Jaguar, Land Rover and Aston Martin in the last three years.

Detroit’s Departed

Mercury would join Pontiac, Saturn, Oldsmobile and Plymouth among the departed Detroit brands of the 21st century. Sales will end within four years, one of the people estimated. General Motors Co., as part of its U.S.-backed reorganization last year, sold or closed four of its eight brands sold domestically.

Edsel Ford, son of founder Henry Ford, established Mercury during the Great Depression as a mid-priced alternative to mainstream Ford and upscale Lincoln. Edsel’s great grand- daughter, Elena Ford, now the automaker’s director of global marketing, initially opposed discontinuing Mercury, which she was in charge of promoting prior to 2002, the people said.

Doing away with Mercury is supported by Ford Executive Chairman Bill Ford and other members of the founding family, who have 40 percent voting control of the automaker through a special class of stock, the people said. With Mercury accounting for 1.9 percent of Ford’s global sales in the first quarter, the family has decided ending it is best for the business, the people said.

‘End of an Era’

“Edsel Ford is revered in the family and Mercury was his creation,” said Wolkonowicz, a former Ford product planner. “This is the end of an era.”

“Our plans regarding Mercury have not changed,” said Mark Truby, a Ford spokesman. “Like any good business, we constantly assess our business portfolio. If things change, we will let you know.” Bill and Elena Ford declined to comment, Truby said.

Mercury sales peaked in 1978 at 579,498, when it had the slogan “The Sign of the Cat.” Deliveries fell 84 percent to 92,299 last year. As the U.S. auto market recovers, Mercury’s sales are up 23 percent this year through April, less than Ford Motor’s overall gain of 33 percent, according to researcher Autodata Corp. of Woodcliff Lake, New Jersey. Mercury had 0.9 percent of the U.S. market through April, unchanged from 2009.

Mulally, since arriving from Boeing Co. in September 2006, put a priority on improving quality and expanding the offerings of the Ford brand to lessen its dependence on pickups and sport- utility vehicles. He ended three years of losses at the Dearborn, Michigan-based automaker by earning $2.7 billion last year and has said 2010 will be “solidly profitable.”

Mercury Withered

As Mulally focused on the namesake brand, Mercury withered, the people said. Ford’s ad spending on Mercury fell 88 percent from 2005 through 2009, according to researcher Kantar Media of New York. Last year, Ford stopped selling the Mercury Sable, a sibling to the Taurus. The Mountaineer, Mercury’s version of the Explorer, is to go away next year as Ford rolls out a new version of the SUV.

Since Mulally’s arrival, Ford stopped giving Mercury exclusive features and technology, the people said. That made Mercury less distinctive than comparable Fords, which tend to be priced lower.

“The reason Mercury failed throughout its existence is because Ford never wanted to spend any money on it,” Wolkonowicz said. “Ford always wanted to do it on the cheap and the results were what you’d expect.”

Mercury’s top-selling model is the Milan, a sibling of the Ford Fusion, with sales up 53 percent this year. Mercury also sells its own version of the Ford Escape SUV, known as the Mariner, which has had a 22 percent sales gain through April. Ford is scheduled to replace those models in 2012 and 2013 and could drop the Mercury versions, Wolkonowicz said.

Retiring Sedan

Mercury’s second best-selling model, the Grand Marquis, is being retired next year as Ford stops producing a trio of large, rear-wheel drive sedans that also includes the Lincoln Town Car and Ford Crown Victoria. Mulally has emphasized more fuel- efficient models, such as the Fiesta and Focus small cars Ford is introducing this year in the United States. Neither has a Mercury counterpart.

“The Grand Marquis has the oldest buyer demographics in the industry with an average age of 70,” Wolkonowicz said. “There are still members of the Depression generation who will miss Mercury.”

Mercury’s cultural heyday came in the 1950s, when hot- rodders favored its engines, which were larger and faster than those found in Ford models, Wolkonowicz said. Along with Lincoln, Mercury sponsored “The Ed Sullivan Show” on CBS in the 1950s and 1960s. Detective Steve McGarrett drove a black Grand Marquis in the “Hawaii Five-0” TV series on CBS in the 1970s.

As Mercury’s sales plunged, so too have its profits, Wolkonowicz said. With one-quarter of the sales it had a decade ago, it’s hard to rationalize the line’s continued existence, he said.

“I’m not surprised to see Mercury go because they don’t sell enough of them,” Wolkonowicz said. “It’s been a case of benign neglect for years.”

princelybug

iTrader: (16)

Mercury.

Moog-Type-S

It was all a matter of time.

Infamous425

no surprise. just a bunch of rebadged fords anyway.

dom

About time. They killed Mercury up here years ago.

wassystyle

sad to see you go..

Sarlacc

This should have happened years ago.

MyCarIsntInMyWifesName

Ford's really missing an opportunity to crank out a cool brand by just rebadging for so long.

TSX69

Shame that Ford did not look @ GM's current success w/ Buick as inspiration. The Milan was way too similar to the Fusion ... if only they differentiated them more & gave people a reason to consider the brand ....

biker

phile

Buick is what it is today because GM pulled the same move Ford is doing with Mercury. Remember a brand called Oldsmobile?

neuronbob

Mercury who?

Mercury was dead years ago. I never saw the point of having Mercury around.

Hapa DC5

bye bye...

agranado

Too bad. A couple dedicated premium sports RWD models over at mercury would've been fun, but it's been irrelevant for the past 5+ years.

doopstr

I won't miss it. I owned a 84 Topaz and it wasn't nothing more than a Tempo with a different badge and seat covers. Buying a Mercury was like hitting an option check box on the build sheet.

PortlandRL

Good thing my grandfather isn't around to see this...he loved his Grand Marquis. But regardless, this will make Ford stronger in the end. Sometimes you just need to cut the excess fat.

charliemike

It never made sense to me to keep Mercury around.

Ford cars, Ford trucks, and Lincoln in one dealer makes the most sense now.

JediMindTricks

+1 on never making sense.

Type34

I was actually a consultant for Mercury about 10 years ago when they were based here in Irvine, CA.

I could see they were doomed back then because their strategy didn't make sense. They wanted to use Mercury as a younger-man's Lincoln - a way to enter the brand without actually driving a Lincoln (like Toyota does with Scion).

But the only "young" product they had at the time was The New Mercury Cougar, which actually sold quite well in its first year or so, but after the design excitement was gone, people realized it was a rattle-happy POS with an anemic 170hp V6 and the worst cupholder design ever.

What else did Mercury have to entice "young" buyers? The Mystique? Sable? Grand Marquis? Mountaineer? anyone?? anyone???

But at least the Cougar was a design success and set the stage for coupe aesthetics for years to come (Eclipse, Tiburon, etc.). This was our "cat"...

Costco

Yup.... the only thing Mercury had going for it was that there was that hot chick doing their commercials. Then they stopped featuring her in them....

phile

Cougar was ug-lee

F-C

I could've sworn that back around 1999~2002, Ford already announced the end of Mercury. I remember Ford announcing that once the Cougar ended its run, it would discontinue the brand. Kind of surprised that it's still around.

phile

i think it was heavily speculated, but I guess Ford figured they'd milk the public as much as they can. It's only now that times are tougher, so they had to trim the fat.

dallison

meh

Type34

Yep, they've been flirting with it for years, but each time the L/M dealers stepped in and went

I guess I would too if I suddenly had to rely on an aging Lincoln LS, livery whore Town Car, bloated Navigator, and invisible Aviator for all of my sales.

I think now they're a little more confident with a portfolio of the MKZ, MKS, MKX, MKT, and Navigator (although I wouldn't get too confident).

dom

Must have read a Canadian press release. Like i said earlier, It was axed up here years ago. 1999 to be exact.

wassystyle

This was bound to happen sooner or later. Over the last ten years, Mercury's sales numbers have plummeted, and currently, the brand only accounts for 0.8 percent of Ford Motor Company's overall market share. In a press conference this afternoon with Mark Fields, Ford's president of the Americas, and Derrick Kuzak, group vice president of product development, the automaker has officially announced that Mercury will be discontinued in the fourth quarter of this year.

With all of the forward momentum that Ford has been experiencing over the past few years, no brand-specific models were introduced to the Mercury lineup. What's more, the vast majority of recent Mercury purchases were made through discounts offered to retirees, friends and family. Mercury's dealer network (coupled with the Lincoln brand) is currently in the process of being notified about Ford's decision, and owners are reassured that existing Mercury products can still be serviced at any Ford or (newly standalone) Lincoln dealer.

But it isn't all bad news down in Dearborn – Ford is using Mercury's demise as a better reason to seriously beef up the Lincoln brand. Including the 2011 MKZ Hybrid and refreshed 2011 MKX, Ford is expanding the Lincoln lineup with the addition of seven all-new or wholly refreshed vehicles, including the brand's first-ever C-segment vehicle, possibly related to the C Concept that we saw at the 2009 Detroit Auto Show.

Furthermore, Lincoln will be offering EcoBoost powertrains across the entire lineup, including the next-generation Navigator full-size SUV. Ford is committed to making Lincoln substantially more prosperous in America, saying that the brand will house more useful features and technology than any other competitor, as well as offering the most fuel-efficient lineup of luxury vehicles.

For full details about Mercury's demise and Lincoln's expansion, follow the jump to read Ford's official press release.

wassystyle

FORD TO EXPAND LINCOLN LINEUP AND BRAND EMPHASIS; MERCURY PRODUCTION ENDS IN FOURTH QUARTER OF 2010

• Ford is expanding its Lincoln lineup with seven all-new or significantly refreshed vehicles in the next four years – including its first-ever C-segment vehicle
• Lincoln's plan accelerates with more investment and attention on standout product design, class-leading technology and powertrains delivering top performance and fuel efficiency
• Lincoln product development, marketing, sales and service resources expanding as the brand competes with Cadillac and Lexus in the marketplace
• Ford will end production of Mercury vehicles in the fourth quarter of this year to fully devote its financial, product development, production and marketing, sales and service resources toward further growing its core Ford brand while enhancing Lincoln
• Existing Mercury owners to receive continued access to parts and service support at Ford and Lincoln dealers; current Mercury vehicle warranties and Extended Service Plans will be honored; special offers available on new Mercury vehicles through the summer
• Affected dealers to receive specialized support during the transition, as the company continues its transformation to a more profitable dealer network

DEARBORN, Mich., June 2, 2010 – Ford Motor Company 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 focused on standout product design, class-leading technology and new powertrains – all aimed at competing with Cadillac and Lexus in North America.

Ford also will end production of Mercury vehicles in the fourth quarter of this year to fully devote its financial, product development, production and marketing, sales and service resources toward further growing its core Ford brand while enhancing the Lincoln brand.

"We have made tremendous progress on profitably growing the Ford brand during the past few years. Now, it is time to do the same for Lincoln," said Mark Fields, Ford's president of The Americas. "The new Lincoln vehicles will transform luxury for North American premium customers through an unexpected blend of responsive driving enjoyment and warm, inviting comfort. We will also offer our customers a world-class retail experience through a vibrant retail network."

Lincoln's hallmarks will be refined, modern design, the most fuel-efficient premium powertrains and industry-leading technology that create a unique driver experience both in the cabin and on the road.

"Profitably growing Lincoln in North America is an important part of our One Ford plan," said Alan Mulally, Ford president and CEO. "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."

Foundation Set

The future of Lincoln is building from a strong base that includes the all-new flagship MKS large sedan, the all-new MKT seven-passenger crossover and a significantly refreshed MKZ mid-size sedan – all now in showrooms. The hybrid version of the MKZ will reach showrooms later this year and is expected to be the most fuel efficient premium sedan on the market.

Lincoln's product actions continue later this year with the debut of the significantly refreshed 2011 MKX crossover, the first vehicle to feature MyLincoln Touch driver connect technology.

This will be followed by another six all-new or significantly refreshed vehicles within four years developed with Lincoln's DNA of standout design, precise and confident driving experience, class-leading technology and powertrains delivering top performance and fuel efficiency.

Lincoln will be led by expanded product development and marketing, sales and service teams to support the brand's growth plan and ensure it has a strong cadence of distinct products that are well positioned in the market. Plans for Lincoln include:

• Lincoln's first-ever C-segment vehicle
• New Lincoln-exclusive powertrains, including an all-new V-6 engine and advanced fuel-efficient transmissions
• EcoBoost engines available in all Lincolns – from the Navigator full-size SUV to the new C-segment Lincoln
• Fuel economy leadership with each new vehicle – leading to Lincoln emerging as the most fuel-efficient luxury lineup on the market

More useful technology and features than any other competitor – with a special focus on comfort and convenience. New advanced features include: fully retractable glass roofs; adaptive computer-controlled suspensions; electronic, push-button gear-selectors; active noise control; and exclusive MyLincoln Touch driver connect technology

"Lincoln vehicles will reward drivers with smooth, effortless power complemented by agile handling and responsive steering," said Derrick Kuzak, Ford's group vice president, Global Product Development. "The cabin is a sanctuary with segment-leading quietness, genuine materials and intuitive, useful technology."

Lincoln has started gaining traction with customers, as evidenced by market share gains during the past five years. Lincoln's share of the retail U.S. luxury vehicle market has grown from 4.5 percent in 2005 to 6.3 percent through the first quarter of 2010.

In addition, Lincoln's reputation with consumers has risen, with favorable opinion and purchase consideration reaching its highest level in the past five years. Lincoln's long-term durability was second only to Porsche's in the 2010 J.D. Power and Associates Vehicle Dependability Survey.

Mercury

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 during 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 been declining.

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.

Personal Attention

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 Ford and Lincoln 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 today also 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 Mercury vehicle production.

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

YEH

Mercury only sells a fraction of what it used to sell.

Really, this is a good decision (and about time).

Now that the new Ford models have higher-end interiors, there really was no differentiation w/ the Mercury models (heck, there isn't enough differentiation btwn Ford and Lincoln models).

biker

In retrospect, last year's economic collapse combined with bankruptcies at GM and Chrysler would have been a good excuse to weed out Mercury. Winding down the brand this quickly seems like they've had this planned for some time.

mrsteve

iTrader: (1)

Potential 24 Hours of LeMons entry...

MyCarIsntInMyWifesName

They're gonna put the EcoBoost in the Navigator? 3.5?

Wouldn't the new 6.2 be a better idea?

mrsteve

iTrader: (1)

They're going to run the EcoBoost in the Raptor Off-Road Race truck this year.

I think Ford sees the EcoBoost as the future. It's making 400 hp/400 ft-lbs in the 2011 F-150.

TSX69

W/out Mercury, Lincoln Dealers Face Grim Future

For Lincoln-Mercury dealer Darryl Wischnewsky in Houston, survival boils down to one thing: getting a Volvo franchise.

Wischnewsky has a letter of intent from Volvo and is awaiting final approval. Without another franchise, he worries, his store -- which will have only Lincoln when Mercury dies in the fourth quarter -- will be doomed.

Meanwhile, he says: "You have to cut all unnecessary expenses. That means going straight to advertising; then comes personnel."

Ford Motor Co's decision to kill the Mercury brand by year end is essentially a death sentence for many of the 276 Lincoln-Mercury dealerships. In most cases, Lincoln cannot stand alone, Ford and many dealers say. Options for Lincoln-Mercury dealers are limited: find a replacement franchise such as Ford, sell out or drastically cut costs.

Many Lincoln-Mercury dealers are putting on a brave face, but few have quick answers. Some hope Ford revs up marketing and delivers fresh products for Lincoln.

"We already have good product. What we haven't had is dedicated marketing," says Ed Witt, owner of Witt Lincoln-Mercury in San Diego. "That's going to make a huge difference."

Mike Jackson, CEO of AutoNation Inc., has one stand-alone Lincoln-Mercury dealership and is glad that's all. He does not believe most Lincoln stand-alones will survive.

Lincoln "simply doesn't have the brand strength, the product portfolio or the throughput relative to the number of dealers it has to support it as a free-standing dealership," he says.

Ford Motor's leaders acknowledge that some stand-alone Lincoln-Mercury dealers will fail with just Lincoln, but they decline to estimate how many. Last year, 92,299 Mercurys were sold and 82,847 Lincolns. Lincoln's sales trail those of other upscale competitors.

Ford is encouraging Lincoln and Ford dealers to buy others out to establish Ford-Lincoln dealerships. In some cases, Ford has chipped in cash. Ford insists it will not force any deals.

"Our approach will be very consistent with the approach we've had for the last four or five years: work with the dealers, consolidate where it makes sense and go from there," Mark Fields, Ford's president of the Americas, told Automotive News.

7 products promised

Ford is promising seven new or significantly improved Lincoln products during the next four years. The Lincoln lineup now has six vehicles.

But some Lincoln-Mercury dealers believe that Ford will funnel the fresh inventory to Lincoln franchises that are paired with Ford franchises because they get more showroom traffic.

"What's left for Lincoln-Mercury dealers is like a box of Cracker Jack and a canteen of water, and they want you to walk across the desert with it to get to the promised land," says a Ford-Lincoln-Mercury dealer who asked to be anonymous.

The dealer says Mercury accounts for half his 300 annual Lincoln-Mercury sales. Even though he also has a Ford franchise, he predicts he will have to lay off staff when Mercury dies.

Bob Tasca Jr., chairman of the Ford Lincoln Mercury National Dealer Council, says he has had dozens of calls from anxious Lincoln-Mercury dealers. He suggests that they get another franchise, build service revenue or expand sales of used vehicles.

All three tasks are challenging. In an age of consolidation, few automakers are offering franchises. Some dealers say word of Mercury's demise has hurt used-vehicle sales because customers fear cars of a dead brand won't hold value. And the end of new-Mercury sales means fewer service customers.

Tasca sells 2,500 new vehicles annually at his two Ford-Lincoln-Mercury stores. About 300 are new Mercury vehicles. He believes his sales will remain flat next year because Mercury owners will buy Fords.

"I've had a long-standing relationship with these customers," says Tasca, owner of Tasca Automotive Group with stores in Cranston, R.I., and Seekonk, Mass. "They don't only buy Mercury. They buy Tasca."

Wischnewsky, owner of Bayway Lincoln-Mercury, will cut $30,000 from the $75,000 a month he spends on advertising to prepare for life with a stand-alone Lincoln store. Last year, Wischnewsky sold 900 new Lincoln and Mercury vehicles, down from 1,200 earlier this decade.

Mercury's demise means he will lose about 360 new-vehicle sales a year and some used-vehicle sales, he says.

Lenders are gun-shy

Lenders already are gun-shy about financing late-model Mercury vehicles, Wischnewsky says. And customers are leery of buying new Mercurys. He says one woman almost refused delivery of a new Mercury after she heard Ford was killing the brand.

Wischnewsky isn't alone in his bid for a new franchise. He knows three Lincoln-Mercury dealers who are doing the same thing.

The reason, he says, is painfully clear: "These are dealerships we planned on passing down in our families, and that dream just got yanked out."

Amy Wilson contributed to this report

PHP Code:

Luxury laggard
Lincoln's U.S. sales trail those of other luxury brands through May.
Lexus    90,098
Cadillac    52,997
Acura    50,278
Infiniti    38,996
Lincoln    37,444
Source: Automotive News Data Center 


MyCarIsntInMyWifesName

That's an interesting article that a lot of people predicted.

Still, how many Lincoln dealers are spread throughout America compared to say, Infiniti? Because Infiniti is considered successful and they are nearly on top of Infiniti.

If it's that difficult for many of them, then one would think the consumers have too many Lincoln dealers to scope out. GM suffered this same problem, as did Chrysler.

Type34

This is why you've seen it's been so hard to kill the Mercury brand : the dealers.

Milan : Mariner : Mountaineer : Grand Marquis

They're bitching about losing the above product sales. None of those products are noteworthy in their respective segments and with exception of the hybrid Milans and Mariners, every single one of them could be driven off a cliff and nobody would care (yes GMarquis are popular with older buyers yada yada yada).

Here's where my consultant brain engages and my frustration sets in: these dealers need to realize it's not 1985 any more!

The car business has changed. You don't need entry level cars on a luxury lot. That's what certified pre-owned vehicles are for...to appeal to the buyers that can't buy new. The basic formula for selling luxury cars in the 21st century is:

1. Sell a finite group of vehicles in popular segments, expand when profit allows (focus on quality, customer service, and design)
2. Market to the appropriate demographic (to the buyers of "new" vehicles)
3. Sell/lease these quality vehicles to those buyers
4. Do not discount price, but offer financing incentives when appropriate
5. Once used vehicles come about, certify them and sell as quality used cars

L/M dealers aren't focused on #5, they'd rather sell you a new Mercury instead of a quality used Lincoln. The problem with not focusing on #5 is that #5 is key to keeping resale value high and therefore residuals high. #5 allows lower lease rates and consumer confidence in the brand. Lower lease rates means that Mercury buyers could get into a new Lincoln.

I'm just hoping this is the approach Ford/Lincoln is going after...the brand equity of Lincoln is very low, building up the brand value and offering quality products will be better for everyone in the long run.