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Ford to drop Mercury line at year’s end

- The Washington Times - Wednesday, June 2, 2010

Ford Motor Co. announced Wednesday that it would drop its 72-year-old Mercury brand, the latest example of an American auto giant shedding one of its divisions in an increasingly competitive marketplace.

The last set of Mercury cars is expected to roll off the line in the fourth quarter of this year. Spokesmen from the company said that though the decision was a difficult one, it was the only one the company could make from a financial standpoint. The Mercury brand's line includes the Milan and Grand Marquis cars and the Mariner and Mountaineer sport utility vehicles.

Mercury's sales have been declining, from its peak of 580,000 vehicles in 1978 to just 92,000 in 2009. The division's sales for May dropped from 10,221 last year to 9,128 this year. The market share for Mercury in the U.S. is at just 0.8 percent, while Ford's overall share in the market is about 15 percent.

At the press conference in Dearborn, Mich., Ford officials announced plans to enhance and focus on the company's Lincoln-brand automobiles and said those plans played a role in the decision to kill Mercury. That will include producing the brand's first-ever small family car.

Mark Fields, executive vice president for the company, said the desire to focus on enhancing the Lincoln line, long an image of American luxury, was a factor in the decision.

"Now it's really time to take [Lincoln] to the next level," he said.

Mr. Fields emphasized that no dealers will be eliminated, as all Mercury dealers also have either a Lincoln or a Ford franchise.

"There are no Mercury-only dealers in North America," he said, adding that no jobs would be eliminated as a result of the cut.

However, another of the spokesmen said the decision "affects people," and some dealerships "are going to go out of business."

Existing Mercury owners will receive continued access to parts and service support at Ford and Lincoln dealers, and current Mercury warranties will be honored, the company said. The Washington Times attempted to contact more than 10 Washington-area Mercury dealers, but nobody at any of them was willing to talk.

Anthony Pratt, a market analyst at Autofacts, a company of industry specialists devoted to analyzing sector trends, said he didn't think Ford's plans to keep a steady consumer base by expanding Lincoln into some of the market segments Mercury fills would have to compromise Lincoln's status as a luxury brand.

"I think people are hoping that they would stay within the Ford family," he said.

Mr. Pratt said he didn't think the change would have a negative impact on Ford Motor Co. as a whole, partly because of the company's most recent sales reports. As a whole, Ford's sales have been on the rise, jumping 21.9 percent from May 2009 to May 2010. Furthermore, the company's year-to-date sales, as of June 2, are up 30.1 percent from last year.

Ford likely didn't make the change sooner because it wanted to look out for its Lincoln/Mercury dealers, who rely in part on the Mercury brand for sales, Mr. Pratt suggested.

"Many analysts would contend that Mercury probably would have been dropped if it wasn't for Ford's commitment to its Lincoln dealers," he said.

In the past few years, Lincoln has bolstered its lineup with additional cars, including the MKS large sedan and the seven-passenger MKT, which steers the brand closer to being able to stand solo, Mr. Pratt said.

Jerry Robbin, president of the International Mercury Owners Association, said he had seen the move coming.

"On one hand, I would like them to continue manufacturing Mercury, but not at the expense of Ford," he said.

In just the past decade, Chrysler has dropped its Plymouth brand and General Motors Corp. ceased to produce Oldsmobiles. Last year's bankruptcy-related restructuring forced GM to drop or sell its Pontiac, Saturn, Saab and Hummer divisions.

Mr. Robbin, a longtime Mercury fan, said the brand has had trouble distinguishing itself from the Ford line, having strayed from its heydays of muscle cars and other head-turning vehicles. "Over the years, it's had nothing but identity crisis," he said.

Still, Mercury's troubles didn't make the matter much easier for him.

"It's sad to see that my car will become an orphan [cub]," he said. "It's kind of a sign of the times."

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