Ford Likely to Discontinue Mercury
05-27-2010, 04:55 PM
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Ford Likely to Discontinue Mercury Ford Said to Plan End of Mercury After Seven Decades
By Keith Naughton
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.
“We continue to evaluate all of our models and brands,” Mulally told reporters in Washington, D.C., today. “We have no change in our position about Ford or Lincoln or Mercury.”
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.”
Bill and Elena Ford declined to comment, said Mark Truby, a Ford spokesman.
“Our plans regarding Mercury have not changed,” he said. “Like any good business, we constantly assess our business portfolio. If things change, we will let you know.”
Mercury sales peaked in 1978 at 579,498, when it had the slogan “At 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.
Focus on Ford
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.”
Ford rose 60 cents, or 5.3 percent, to $11.99 at 4 p.m. in composite trading on the New York Stock Exchange. The shares have risen 20 percent this year.
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.
‘On the Cheap’
“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.
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.
Oldest Buyers
“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.”
The brand’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. James Dean drove a Mercury in the 1955 movie “Rebel Without a Cause.”
Along with Lincoln, Mercury sponsored “The Ed Sullivan Show” on CBS in the 1950s and 1960s. Detective Steve McGarrett, played by actor Jack Lord, drove a black 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.”
By Keith Naughton
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.
“We continue to evaluate all of our models and brands,” Mulally told reporters in Washington, D.C., today. “We have no change in our position about Ford or Lincoln or Mercury.”
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.”
Bill and Elena Ford declined to comment, said Mark Truby, a Ford spokesman.
“Our plans regarding Mercury have not changed,” he said. “Like any good business, we constantly assess our business portfolio. If things change, we will let you know.”
Mercury sales peaked in 1978 at 579,498, when it had the slogan “At 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.
Focus on Ford
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.”
Ford rose 60 cents, or 5.3 percent, to $11.99 at 4 p.m. in composite trading on the New York Stock Exchange. The shares have risen 20 percent this year.
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.
‘On the Cheap’
“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.
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.
Oldest Buyers
“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.”
The brand’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. James Dean drove a Mercury in the 1955 movie “Rebel Without a Cause.”
Along with Lincoln, Mercury sponsored “The Ed Sullivan Show” on CBS in the 1950s and 1960s. Detective Steve McGarrett, played by actor Jack Lord, drove a black 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.”
05-27-2010, 05:48 PM
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I'm not sure if you caught that, but average age of a Mercury owner: 70.
Also, they didn't want to spend money on it, pure and simple.
When you don't spend money on the brand, and your demographic starts dying out, you end up with this situation right?
Also, they didn't want to spend money on it, pure and simple.
When you don't spend money on the brand, and your demographic starts dying out, you end up with this situation right?
05-27-2010, 06:39 PM
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Less than 2% of Ford's overall vehicle sales too. The writing is on the wall right there.
Investing in Mercury when Ford was in such bad shape overall would have been a highly questionable.
Ford is already 34 billion in debt from investing in the Ford brand itself and selling off everything they could.
The days of American automakers with a huge number of brands were over at least 10 years ago.
Investing in Mercury when Ford was in such bad shape overall would have been a highly questionable.
Ford is already 34 billion in debt from investing in the Ford brand itself and selling off everything they could.
The days of American automakers with a huge number of brands were over at least 10 years ago.
05-27-2010, 07:07 PM
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Can only be a good thing IMO. I never understood the concept of selling the same vehicle under two different badges. Plus the latest incarnation of Mercuries were just godawful ugly compared to their Ford counterparts. These days leaner and meaner is better. Not that many ppl are really going to miss Mercury at this point. Spend those $$$ on getting Lincoln back up to par.
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05-28-2010, 01:31 PM
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Mercury In Freefall for Over 15 Years
By Edward Niedermeyer on May 28, 2010
Mercury isn’t the only entry-luxury brand in free-fall… it’s just the worst of a beat-up bunch. We’ve included Lincoln to help illustrate Ford’s larger luxury-brand issues, and Buick and Acura for competing-brand comparison.
By Edward Niedermeyer on May 28, 2010
Mercury isn’t the only entry-luxury brand in free-fall… it’s just the worst of a beat-up bunch. We’ve included Lincoln to help illustrate Ford’s larger luxury-brand issues, and Buick and Acura for competing-brand comparison.
05-28-2010, 01:32 PM
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I've questioned the existence of Buick for years and wondered why GM didn't can it in the US during bankruptcy. The above graph just reinforces my thoughts on that.
05-28-2010, 03:20 PM
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The biggest question was why Saturn stayed around so long - other than GM execs refusing to admit it was a mistake from the beginning. It never sold any where near as many cars as Oldsmobile or Pontiac, and instead took away resources from both.
I must be the kiss of death for car brands. Check out the new cars I've purchased over the last decade and a half:
1995 Mercury Mystique V6 (Fun to drive, but always in the shop.)
1997 Camaro V6 Y87 (loved it and never should have sold it.)
2000 Olds Alero (loved it - no problems until I hit a deer.)
2002 Pontiac Grand Prix (loved it - no problems.)
2006 Pontiac Grand Prix (love it, but what do I buy next?)
05-28-2010, 06:27 PM
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Buick is a major seller in China, that's why it survived the "purge" plus the new Buicks look like decent cars. Buick is going to become even more important now that GM doesn't have a mid-range car for those who think Chevy is too "down scale" but can't afford a Caddy.
It's no different over at Ford. Ford has premium trim and features like navigation and Sync on Ford vehicles now and Lincoln moved downmarket with the cars like the MKZ.
There isn't a point to having more than two brands in the US - mainstream and luxury.
05-28-2010, 09:07 PM
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It actually just says the Grand Marquis, but I still agree with the point.
GM had a lot of new stuff in the works for Buick which I can only imagine helped contribute to it's survival. GM is completely reworking Buick right now almost taking some of the Pontiac job adding in some sport where they cut out the "uplevel rental car", whereas the boys at Mercury are scratching their heads as their best selling vehicle is a body on frame dinosaur of a platform which is slated for only one more year of production. All the while they hope the restyled Milan can sell 1/10 the amount as the new Fusion.
I understand your point that the gap between Chevrolet and Cadillac is closing, but it seems Buick is trying to head in a different direction whereas Mercury is trying their hardest to not be noticed by Ford brass when consumers see the only reason to buy a Mercury is because the Ford vehicle you want doesn't come standard with leather.
They can keep selling it in China, there was no reason to continue it in the US. That will further be compounded with Cadillac moving downmarket and Chevrolet moving up. There's no room or point to Buick.
It's no different over at Ford. Ford has premium trim and features like navigation and Sync on Ford vehicles now and Lincoln moved downmarket with the cars like the MKZ.
There isn't a point to having more than two brands in the US - mainstream and luxury.
It's no different over at Ford. Ford has premium trim and features like navigation and Sync on Ford vehicles now and Lincoln moved downmarket with the cars like the MKZ.
There isn't a point to having more than two brands in the US - mainstream and luxury.
I understand your point that the gap between Chevrolet and Cadillac is closing, but it seems Buick is trying to head in a different direction whereas Mercury is trying their hardest to not be noticed by Ford brass when consumers see the only reason to buy a Mercury is because the Ford vehicle you want doesn't come standard with leather.
05-28-2010, 10:27 PM
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GM has spent almost ten years trying to "revive" and "redefine" flatlining brands and ended up bankrupting themselves. All of their efforts have failed with every brand like Pontiac and Saturn, how is Buick going to buck that trend? It's not. GM has spent billions on trying to reinvent Cadillac over the past several years with an entirely different line of vehicles and it's sales still suck.
It seems like they are dumping a lot of money, resources and some nice Opel products on a brand that cannot sell them. Or improve in a meaningful way. Ford was smart enough to see that with Mercury. Ford was also smart enough to realize that people want to buy Fords, not Mercurys and that Ford is the lion's share of their business.
Buick is basically just more of the same GM think of make the brand something it is not and never will be and throw stuff at the wall and see what sticks instead of making Chevrolet the best it can be.
05-28-2010, 11:33 PM
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Sorry but like mentioned Mercury is a huge FAIL.... & there ugly
I think the new Buick Lacrosse is nice & the Regal is back now so those should help out Buick? I can understand Acura falling. The new styles are **** & prices are way overpriced. When my mom was shopping for a new car we looked at Acura. They had a 2008 TL with like 30,xxx miles or something that cost couple grand less then a new TL. Which we hated the new look & thought it was a rip for a used TL. So we said **** that & got a 2010 G37. Which was a FAR better deal IMO. Very nice car
I think the new Buick Lacrosse is nice & the Regal is back now so those should help out Buick? I can understand Acura falling. The new styles are **** & prices are way overpriced. When my mom was shopping for a new car we looked at Acura. They had a 2008 TL with like 30,xxx miles or something that cost couple grand less then a new TL. Which we hated the new look & thought it was a rip for a used TL. So we said **** that & got a 2010 G37. Which was a FAR better deal IMO. Very nice car
Last edited by DoggyB22; 05-29-2010 at 12:12 AM.
05-29-2010, 12:10 AM
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So, what and who is the market for that? What about traditional Buick buyers?
GM has spent almost ten years trying to "revive" and "redefine" flatlining brands and ended up bankrupting themselves. All of their efforts have failed with every brand like Pontiac and Saturn, how is Buick going to buck that trend? It's not. GM has spent billions on trying to reinvent Cadillac over the past several years with an entirely different line of vehicles and it's sales still suck.
It seems like they are dumping a lot of money, resources and some nice Opel products on a brand that cannot sell them. Or improve in a meaningful way. Ford was smart enough to see that with Mercury. Ford was also smart enough to realize that people want to buy Fords, not Mercurys and that Ford is the lion's share of their business.
Buick is basically just more of the same GM think of make the brand something it is not and never will be and throw stuff at the wall and see what sticks instead of making Chevrolet the best it can be.
GM has spent almost ten years trying to "revive" and "redefine" flatlining brands and ended up bankrupting themselves. All of their efforts have failed with every brand like Pontiac and Saturn, how is Buick going to buck that trend? It's not. GM has spent billions on trying to reinvent Cadillac over the past several years with an entirely different line of vehicles and it's sales still suck.
It seems like they are dumping a lot of money, resources and some nice Opel products on a brand that cannot sell them. Or improve in a meaningful way. Ford was smart enough to see that with Mercury. Ford was also smart enough to realize that people want to buy Fords, not Mercurys and that Ford is the lion's share of their business.
Buick is basically just more of the same GM think of make the brand something it is not and never will be and throw stuff at the wall and see what sticks instead of making Chevrolet the best it can be.
Sure GM has spent a lot of money reinventing brands in the past years, but up until recently the American public was to blame for the sales, not necessarily the cars. Now that people realize the playing field is a little more even than they had originally thought, the sales trend should reflect that.
I just don't really see how Buick is comparable to Mercury in this instance as Mercury hasn't come out with anything worth while in years. Rebadging a car is one thing, but all Mercurys right now look like no more than a ford with a different grill.
The point is Ford has no point to keep Mercury around, GM has good reason to keep Buick in my eyes.
