After more than 70 years, Ford Motor Company will wind down its Mercury product line, according to a report from Bloomberg. The brand, launched in 1939, has struggled since the beginning of the millennium, with sales plummeting some 75%. Rumors of its closure have been circling for years. Ford sold just 92,299 Mercury-badged vehicles in 2009, though sales are up a bit this year.
According to the report, executives at Ford are preparing a proposal to kill the brand, to be reviewed this summer. The two- to four-year wind down would include the eventual transition of all Lincoln products -- currently sold alongside Mercury vehicles in distinct dealerships -- to Ford showrooms.
"You have to worry about Lincoln dealers if Mercury goes away," said John McElroy, host of the Autoline Detroit television program. "Dealers need that volume to sell, but they also need cars to service as well."
Lincoln products, which share similar platforms, generate higher profits for the company. Many Mercury products have MSRPs close to -- or sometimes exactly the same as -- Ford equivalents. In the first quarter of this year, the brand accounted for only 1.9% of Ford’s total profits.
While lagging sales are certainly to blame, the erosion of Mercury’s identity played a large role as well. With only four vehicles in Mercury showrooms -- all re-badged Ford models with few differentiating features -- Americans seem to have forgotten about it. The shut down of the Mercury brand gives notice that Ford's attempt to create a separate and unique experience for Lincoln was in vain.
“Really this is as much about Lincoln," said John Wolkonowicz, an auto analyst with IHS Global Insight. "They needed Mercury for Lincoln dealerships. Lincoln was never self sufficient and they wanted it separated from Ford. They are closing Mercury and essentially throwing in the towel for Lincoln at this point. It won't stand on its own."
Wolkonowicz said that while a shut down of Mercury was expected for years, upcoming product changes within Ford mean that the brand's best-selling car for April, the Grand Marquis, will leave the market after the 2011 model year.
"The number one Mercury, the Grand Marquis, is going away,” said Wolkonowicz."Once that's gone Mercury isn't worth having anymore. Without it there isn't a business case for the brand. Mercury as a whole hasn't been memorable in a long time."
Ford executives throughout recent years had also forgotten about Mercury. When current CEO Alan Mullaly took over the reins, he elected to focus the majority of the company’s strategy and resources on the Ford line. Mercury, in turn, suffered from a lack everything from advertising dollars to exclusive features and technology.
Ford has already discontinued Mercury in Canada, and if it goes away entirely it would join several other venerable American brands that have been shuttered in the recent past, such as Pontiac, Oldsmobile and Plymouth. Mercury sales peaked in the late 1970s, but its heyday actually came earlier, in the 1950s and ’60s, when the brand offered high-performance cars like the Comet Cyclone and Marauder.
Mercury was the creation of Edsel Ford, the son of Ford founder Henry Ford. Ford created Mercury from scratch, in an era where competitors like General Motors grew by acquiring other carmakers. “Edsel Ford is revered in the family and Mercury was his creation,” Wolkonowicz told Bloomberg. “This is the end of an era.”