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Ford mulls plan to drop Mercury brand: source

(Agencies)
Updated: 2010-05-28 09:35

DETROIT?-- Mercury could soon be the latest Detroit car brand to disappear.

Ford Motor Co. is assessing the future of Mercury, although a final decision on whether to kill the brand hasn't yet been made, a person familiar with the company's deliberations said Thursday. The person asked not to be named because the process is ongoing.

During a trip to Washington to meet with lawmakers, Ford CEO Alan Mulally declined to discuss Mercury, saying the company has nothing new to announce. He added that Ford is continually reviewing all its brands.

Several Lincoln-Mercury dealers contacted Thursday evening said they hadn't heard that Mercury could be discontinued. The news was first reported by Bloomberg News, citing unnamed sources.

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The fate of the 72-year-old Mercury brand has long been in question. The brand, conceived as a mid-range brand between the no-frills Ford brand and the luxury Lincoln brand, saw its peak sales in 1978 at more than 580,000 vehicles but has been in decline ever since. Ford sold 92,000 Mercurys last year.

"It's a brand that has really lost its relevance to the American consumer," said James Bell, an executive market analyst with Kelley Blue Book.

Bell said that since Mulally took over Ford's restructuring in 2006, Mercury seemed to be the one undecided issue, getting little attention even as the company remade the Ford and Lincoln brands and shed noncore brands such as Volvo, Jaguar and Land Rover. Mercury never got a twin of the hot-selling Ford Edge crossover or the Ford Focus compact car, for example.

"It's the one thing at Ford that hasn't been decided cleanly and done the right way," Bell said. "It seemed to be this little void that was sitting off in the corner."

Currently, Mercury's top-selling model is the Mercury Milan sedan, a twin of the Ford Fusion. But while Ford sold more than 75,000 Fusions and Fusion hybrids through April of this year, it sold just 11,800 Milans and Milan hybrids.

Mercury does have one point in its favor: It consistently outsells the Lincoln brand. Mercury sold nearly 10,000 more vehicles than Lincoln last year, even though its sales fell 23 percent from the year before. Edmunds.com suggested Thursday that even if it does cancel Mercury, Ford probably wouldn't lose many customers, since nearly half of Mercury shoppers also consider the Ford brand.

If Ford does kill Mercury, it would only be the latest in a string of casualties as Detroit carmakers try to cut costs and invest more heavily in fewer offerings. General Motors Co. recently shed the Saab, Saturn, Pontiac and Hummer brands. Chrysler Group LLC dumped its Plymouth brand in 2001 after a sales decline similar to Mercury's.