Why Ford May Finally Kill Mercury
Au revoir, overpriced re-branded Fords
Unless you're a Ford savant, Mercurys are a hard car to pick out from the crowd. For decades, these mild-mannered, mid-priced vehicles have shared the basic design of their cheaper, Ford-branded cousins. While analysts have long expected the Detroit automaker to pull the plug on the Mercury marque, it was only this week that reports suggested Ford was close to breaking the news to its dealers. Why is it happening now?
- A Chance to Invest in Higher-End Lincoln, writes Aaron Foley at MLive. He boils down the arguments for killing Mercury to four reasons: 1.) "Zero brand identity" 2.) "No standout models: When the Cougar ended its run in 2002, Mercury lost its sole sports car -- and a large part of its image." 3.) "Downsizing is already popular: Although rebadging core models across brands helped the Big Three keep large volumes of cars on the road, it's no longer profitable." and 4.) "More chances to boost Lincoln: With extra money to go around, Ford could potentially continue to remake Lincoln as a global competitor."
- Ford Not Willing to Revive Brand Sarah Webster for the Detroit Free Press suggests that "Mercury would be hard-pressed to survive in its current state unless Ford were prepared to invest in fresh product for the brand." She quotes auto analyst John Wolkonowicz, who argues that "Mercury is a forgotten brand...Many Americans probably already think it has been discontinued."
- Ford Finally Overcame Sentimental Attachment Dan Neil at the Wall Street Journal explains the Mercury's long history, which goes back to its founding by Edsel Ford in 1939. The brand boasted "some of the oddest, most mannered car designs of the Postwar era." Neil says it is "right and just" for the company to shutter it,while acknowledging that "As wonderful and expressive as Mercury was, it's just one more artifact of the Triumphal Age of American autos, now long past. Ford's messenger of the gods finally got the message."
- A Long Term Decision--With Big Risk Douglas McIntyre at Daily Finance notes the hemorrhaging sales of the Mercury marque. (500k+ vehicles sold in 1984-85 next to 90k last year.) But he points out that Ford is courting risk by shutting down a brand with loyal followers: "Ford runs the same risk that GM did when it closed Pontiac. ... The product development costs and marketing spending were expensive based on units sold, but there was a level of customer loyalty to Pontiac. Once the brand was gone, some of those customers migrated to brands outside the GM family. ...Ford may think it gains margin over the long-term by closing Mercury, and CEO Alan Mutually has made his mark by improving Ford's profits. But getting rid of Mercury may lose the No. 2 U.S. car company more than it bargained for."
- Why Now? Unclear Bryce G. Hoffman of the Detroit News explains that "As recently as February, the automaker publicly renewed its commitment to Mercury. It was not immediately clear what has changed since then." He notes that the Mercury had begun to build "a small-but-loyal following" among women, and that despite expectations it continued to outsell Ford's priciest brand, Lincoln.
This article is from the archive of our partner The Wire.