Why Ford Shut Mercury Down

Just like I mentioned a few days ago, Ford has announced the closure of the Mercury brand.  Production of the four remaining Mercury models will end by the fourth quarter of 2010.  With this announcement came notice that Ford will renew focus on it’s core brands – Ford and Lincoln.  Particularly, Ford plans to expand the Lincoln lineup.  Current Lincoln-Mercury dealers must be glad to hear this, because they will see a volume dropoff with the closeure of Mercury.

So the question must be asked: Why did Ford decide to finally pull the trigger and shut down Mercury?

In any business, but especially the car business, it’s always about the sales.  In the case of Mercury, it was a lack of sales, specifically, that led to it’s demise.  Every Mercury model is a rebadged Ford – there is no  unique product.  In fact, there hasn’t been a unique Mercury product for eight years.

Once upon a time, decades ago, Mercury made sense.  Ford was for regular buyers, and Lincoln was an aspirational brand, something people worked for and hoped to own later in life.  Mercury bridged the gap between the two as a premium brand.  They were nicer than Fords, but not as fancy as Lincolns.

That was then. This is now.

However, that was then, and this is now.  Fords get pretty darn fancy these days.  There are on unique features on Mercury products – everything available on a Mercury is available on a Ford.  Lately, lower level Lincolns have even become close to Ford levels – the MKZ and MKX come to mind.  Both of these models share platforms with Fords.  Is there really room for a Mercury in the middle?  Absolutely not, and that’s why  Mercury is dead.

Without a clear focus, or a niche of any kind, Mercury is redundant.  Continuing to spend dollars re-styling Fords, and spending dollars marketing a 3rd brand is wasteful.  By axing Mercury, Ford frees up money to spend on the two brands that matter.  This puts them in a great situation – remember, companies like Honda, Toyota, and Nissan have run with two brands forever.  Their focus is clear, and there’s no distraction.  No one is fighting for marketing dollars.

This move puts Ford in an even better place then GM, which still has two redundant brands in it’s stable.  I’m not saying Ford will start outselling GM overnight… but it’s a fantastic step to becoming a more focused and more profitable carmaker.

Published on June 3, 2010 in Deadpool,Mercury

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