Report: Wings to Fall Off Ford's Mercury DivisionBy Bill Visnic May 27, 2010
After 71 years of history, Ford Motor Co. may finally be cutting loose its dimming Mercury sales division, reports Bloomberg today.
Citing sources familiar with an executive proposal to be presented to Ford's board of directors in July, Bloomberg said the plan outlines the shutdown of Mercury, whose showrooms soon will be down to two models - yet recently was publicly supported by Ford CEO Alan Mulally while Ford also discussed future-product options for the brand created by founder Henry Ford's son Edsel in 1939.
At the Washington auto show in January, Mulally seemingly supported the ongoing future of Mercury, saying Ford planners and marketers were working to better position Mercury in the Ford-Lincoln-Mercury triumvirate by using the division to emphasize smaller, fuel-efficient models. Some reports speculated a cornerstone of the strategy would be a Mercury-badged variant of the widely anticipated 2012 Focus compact car coming early next year.
"That's our plan: to continuously improve the Mercury and Lincoln brands," said Mulally at the show. But to some present, it seemed his support was half-hearted.
More telling: axing Mercury reportedly is condoned by executive chairman Bill Ford and other Ford family members. Eleana Ford, great-granddaughter of Edsel, is the company's director of global marketing and presumably also has a realistic grasp of Mercury's viability.
Mercury's historic cross to bear: differentiating itself from the Ford models on which they were based and often only cosmetically unique.
In a post-World War II brand-arid U.S. market prior to the import invasion, Mercury made sense as a "new" sales channel that could wring more profit from what essentially was a Ford. But those times are as distant a memory as the reasons why Mercurys once were different enough to seem distinctive.
Mercury's sales peak in the U.S. was more than three decades ago, when the brand sold 579,498 vehicles. Mercury sales in 2009: 92,299.
Through April this year, Mercury sold 32,552 vehicles, a 19.9-percent increase compared to 2009 in an overall market that has improved about the same amount.
To give perspective to Mercury's place in the U.S. market, its 92,299 sales last year were ahead of its in-house rival Lincoln, which sold 81,854 vehicles in 2009, as well as other notables such as Audi (81,630), Infiniti (79,277) and Volvo (58,737).
Just ahead of Mercury were brands such as Buick, with 2009 sales of 102,260, Acura (105,701) and Cadillac (105,701).
According to data from Edmunds.com, Mercury is most-often cross-shopped with Ford. In April, 46 percent of Mercury buyers cross-shopped with Ford, 23 percent cross-shopped General Motors Co.'s Chevrolet, 22 percent cross-shopped Honda and 21 percent cross-shopped Toyota.
And Mercury has slid from accounting for 7.6 percent of Ford sales in 2002 to just 5.5 percent so far this year, according to Edmunds.com data. - Bill Visnic, senior editor
Photo by Ford