Lincoln to be volume leader over Mercury?

[nadepalma]

Ford's 'Way Forward' plan also promises new product, marketing
By AMY WILSON | AUTOMOTIVE NEWS
AutoWeek | Published 01/30/06, 8:31 am et

DETROIT -- Cost cutting and plant closures got the most attention in Ford Motor Co.'s Way Forward North American restructuring plan announced Monday, Jan. 23.

After all, with a 10-year slump in market share and severe underuse of its assembly plants, getting smaller is Job 1. But Ford executives also touted plans to improve marketing and brand identity, develop innovative products and ultimately build sales.

"The Way Forward contains some strong medicine for our North American business," CEO Bill Ford said. "But it also contains the vision and strategic focus to rebuild the business."

Details were scarce. But here are some key promises:

>> Ford will close 14 manufacturing plants from 2006 through 2012, including seven assembly plants. As many as 30,000 hourly and salaried factory jobs will be eliminated. Ford will reduce assembly capacity by 1.2 million units, or 26 percent, by the end of 2008.

>> Ford's North American automotive business, which lost $1.6 billion before taxes in 2005, will return to profitability no later than 2008.

>> An assembly plant near St. Louis will be idled in March, followed by an assembly plant near Atlanta late this year. The Wixom, Mich., assembly plant will be idled in the second quarter of 2007. Also, production at an assembly plant in St. Thomas, Ontario, will be reduced to one shift sometime in 2007.

>> This year, Ford will name two additional assembly plants to be idled before the end of 2008. Plants in St. Paul, Minn., and Cuautitlan, Mexico, are candidates.

>> A transmission plant in Batavia, Ohio, and a casting plant in Windsor, Ontario, will be idled before the end of 2008.

>> Ford will build a low-cost manufacturing site somewhere in North America.

>> Ford will finish cutting 4,000 salaried, contract and agency jobs by the end of the first quarter.

>> Ford will trim 12 percent of its corporate officers: Six or seven positions out of 53 as of Jan. 23. The reductions started last week.

>> Ford will stabilize its U.S. market share in 2006.

>> Ford expects net material cost reductions of at least $6 billion by 2010.

>> Ford no longer will provide earnings guidance.

>> Vehicle pricing will be closer to transaction pricing. Ford says it will cap "cash-on-the-hood" rebates.

>> Investment in new products and use of global vehicle architectures will allow Ford to deliver more new products faster. They include more crossovers, small cars and hybrids. New hybrids announced last week are the Ford Five Hundred and Mercury Montego sedans and the Ford Edge and Lincoln MKX crossovers. All will arrive from 2008 through 2010. Ford says it will improve the average age of its products from 4.4 years today to 3.2 years by 2008.

>> Ford intends to revive the Lincoln and Mercury brands, with Lincoln becoming the volume leader of the two.

[Proetus]

Mercury will be Ford vehicles with a feminine touch.

[nadepalma]

Originally Posted by nadepalma

>> Ford intends to revive the Lincoln and Mercury brands, with Lincoln becoming the volume leader of the two.

This is all old new by now, but this quote has been mentioned elsewhere and I'm not sure why no one else has commented on it. I kind of went off on a rant on this idea in another thread but no one seemed to comment.

So here it goes for a second try.

First point is, Mercury sales were significantly larger than Lincoln sales over the past few years. Without Mercury, Lincon Mercury franchises would go out of business. But this makes no sense to me as Mercury are supposed to be the "volume" in this pairing and appeal to a larger audience. Lincoln is supposed to be the more "exclusive" of the two and appeal to up-market consumers. What sense does it make to have Mercury turn into the smaller of the two? Will Mercruy be a niche product now and Lincoln the volume? Makes no sense at all.

But there is a "hint" in here -- just a hint mind you -- that things are going to shift from Mercury to Lincoln in preparation for Mercury to be killed off...that' the only reason that I can see here for them to make Lincoln the volume leader...

In all honesty, this is just a stupid move. Other articles have stated that Mercury is attracting non-Ford/import buyers at up to a 50% take -- that means that there is some appeal left in their products and they would be stupid to not nurture this by giving Mercury the tools needed to survive.

If anything, perhaps Mecury should be to Ford what Saturn has become to GM -- an outlet that allows them to reposition the brand as a more "import" oriented brand that will take on the competition. Just as Opel will supply future Saturn products and fight Honda/VW/etc -- Ford could very well do the same for Mercury.

But for this to happen in a reasonable manner, Ford ABSOLUTELY NEEDS to give Mercury a distinct appearance/grille/styling cues/etc. It is a must. Mercury needs to be differentiated from Lincoln and Ford -- they need to give it an identity of it's own. Get that stupid symbol off the front of the car and readopt the Mecury-God profile. And give it unique styling -- don't give it one kind of waterfall grille and Lincoln another as they are now -- you're not doing either brand a favor...make Mercury distinctive!! I can't belive they haven't figured this out yet.

What kind of grille/styling cues to they need? Well Mercury's Meta one concept from awhile back that was based on the FreeStyle had a grille that was kind of shaped like Saab's 3-port-grille:



Maybe this is one direction to go, but the middle of the girille should drop the waterfall -- just give it another look that doesn't confuse it with Lincoln's waterfall. Perhaps they should rip off another car maker? Give it Dodge's "cross-hairs" grille, etc. Anything that makes it look different from other Ford vehicles.

Sorry for the rant, but thought I'm a GM guy through and through, I don't want to see another historic American car division to go bust. With the little bit of investment that Ford has given Mercury, we've seen that there is some viability left in the brand. They should really use this to their advantage and give Mercury a make over that will attract new customers to the brand.

Am I crazy here or does anyone else agree?

[AdmiralViscen]

I agree.

[Achelous]

I'll second that. Well put, nadepalma!

[FoMoCo Fan]

I agree the statement is odd, but Lincoln/Mercury is really just one division, so keep that in mind. I can't see them dumping Mercury at a later date, if they're going to do it, they'd do it now. They're having good success with the marketing with Mercury right now, and I don't see them abandoning that.

Now for my interpretation:
I think it just indicates that Lincoln is going to be a full line brand for the first time ever. Peter Horbury said something about the Zephyr "who's to say this is the smallest Lincoln". I think Lincoln is getting a C1 based premium compact sedan and sport wagon.

So here's what I see as Lincoln's future lineup (I know the names may change but I don't care)

C1 based Lincoln sedan
C1 based Lincoln wagon
Zephyr
Mk-S (LS replacement)
Town Car replacement
Mk-R (Mustang based sedan or coupe)
Mk-M (D3 based people mover)
Mk-X (CD3 based crossover)
Navigator
Navigator L
Mark LT

That's 10 or 11 models depending on how you count em. Up from six this year. Up from four two years ago.

Now for Mercury:

Magellan (D3 crossover)
Milan
Montego
Grand Marquis (could die soon, and not be replaced)
Mountaineer
Mariner
Cougar/Messenger?

That's seven models. Eight if they get a compact sedan. Again. keep in mind that there are no stand alone Mercury dealers. (and few stand alone Lincoln dealers). I see Mercury as being home to rebadged versions of Ford vehicles which Lincoln does not get a version of, such as the Magellan, Mountaineer, Mariner and Montego (with a few exceptions like the Milan)

[BORG]

Lincoln has more brand equity than Mecury and the entry level luxury market is by far the fastest growing segment in the industry. It's one of the reasons Lexus has been so successful in dominating the market. Lincoln is the only NA brand positioned to really target the entry market. Mercury doesn't have the same marketing potential as Lincoln and thus you see Ford trying to expand Lincoln from an exclusive luxury brand to a fuller Lexus-type brand whith MUCH higher sales volume than they have now. We already see the Zephyr outselling the Milan.

[nadepalma]

Originally Posted by FoMoCo Fan

I agree the statement is odd, but Lincoln/Mercury is really just one division, so keep that in mind. I can't see them dumping Mercury at a later date, if they're going to do it, they'd do it now. They're having good success with the marketing with Mercury right now, and I don't see them abandoning that.

Oh yes, I know that and the old logic was that Lincoln couldn't not survive without Mercury and vice-versa. While I think that dumping the brand would be a long shot, they could conceivably do what Jacques Nasser had planned on doing, and that was to starve Mercury to the point of extinction. Again, I think that this is a long shot. But I agree that things are looking more and more up for the brand (until I read this) and that they'd be smart to nurture this into more distinctiveness and brand-appeal.

Originally Posted by FoMoCo Fan

Now for my interpretation:
I think it just indicates that Lincoln is going to be a full line brand for the first time ever. Peter Horbury said something about the Zephyr "who's to say this is the smallest Lincoln". I think Lincoln is getting a C1 based premium compact sedan and sport wagon.

I never considered this perspective -- and it very well might be what you have stated here. But again, if they do plan on going more and more down-market, then it will errode Mercury's position as the "feeder" brand to Lincoln. While I think that a C1 based car (ala the Volvo S40 or C30) would be a nice idea for Lincoln to get younger folks into showrooms, I also think that this would be a realm better guaged for Mercury. Again, just my opinion.

Originally Posted by FoMoCo Fan

So here's what I see as Lincoln's future lineup (I know the names may change but I don't care)

C1 based Lincoln sedan
C1 based Lincoln wagon
Zephyr
Mk-S (LS replacement)
Town Car replacement
Mk-R (Mustang based sedan or coupe)
Mk-M (D3 based people mover)
Mk-X (CD3 based crossover)
Navigator
Navigator L
Mark LT

That's 10 or 11 models depending on how you count em. Up from six this year. Up from four two years ago.

Interesting lineup. Some good points there -- though I wonder if the Navigator will become the "Mark N" or "Mk-N" at some point to create a sense of parity with the other vehicles. Again, as I stated above, I don't know about a C1 based product -- unless it was more along the lines of an S40 type vehicle. IF they offered something like that -- that is an AWD (STANDARD) small/sporty sedan, then I suppose that would be okay. But again, how would that fair on Mercury? Isn't the point of Mercury to "protect the up-scaleness" of Lincoln by letting Mercury be the volume leader in the franchise? Granted, Lincoln seems to be moving more and more away from a "true" luxury marque like Benz/Bimmer/Caddy/Lexus and more toward an entry-level luxury role such as Saab/Acura/Buick/Etc (and I wonder how that will fair with Volvo since they are basically in the same market -- but that's another thread). And while I don't know if I ever really thought of Mercury as an entry-level luxury car, it was certainly more upscale from Ford. Again, perhaps they should reposition the brand as an import figher ala Saturn (or what Oldsmobile was at the end for that matter.)

Originally Posted by FoMoCo Fan

Now for Mercury:

Magellan (D3 crossover)
Milan
Montego
Grand Marquis (could die soon, and not be replaced)
Mountaineer
Mariner
Cougar/Messenger?

That's seven models. Eight if they get a compact sedan. Again. keep in mind that there are no stand alone Mercury dealers. (and few stand alone Lincoln dealers). I see Mercury as being home to rebadged versions of Ford vehicles which Lincoln does not get a version of, such as the Magellan, Mountaineer, Mariner and Montego (with a few exceptions like the Milan)

I knew about the pairing -- it's been that way for years -- and don't know of any stand alone Lincoln stores, but there could be a few out there. The problem with Mercury being solely based on rebadged Fords is that they are NOT doing it with any distinctiveness. If we look at GM, we (and by WE I mean auto-enthusiasts like us), know that Epsilon is shared by Saab/Opel/Chevy/Pontiac/Saturn -- but the Aura looks nothing like a G6 and an a 9-3 looks nothing like a Malibu. Why can't Ford do the same for Mercury and give them more distinctive looking vehicles? I'm not saying they can't share one or two panels exterior-wise, etc. -- but they could at least make them look like they are from two different brands.

The idea of a compact Mercury sedan wasn't lost on me either. The Mercury Tracer used to fill this role when Ford still had the Escort, but there wasn't any Focus derived product planned when it came to market. Part of this is due to, again, Jacques Nasser's idea to starve Mercury and eventually kill it off -- something he admitted to later on after he left the CEO's office.

Honestly, I don't know if this is a good or bad thing -- if Mercury is to be more upscale from Ford, does it truly need an entry-level car? But again, Ford could do this properly if they made it more distinctive and appealing.

If Mercury were to get an entry-level car based on the the next Focus (the US rehashed version, not the Euro version), they could make it distinctive. For example, using the current Focus as a basis, the Focus now has the Duractec 20 and Duractec 23 I-4 engines and a standard list of features. IF Mecury were to get a version then why not offer the car with only the Duractec 23 with slighly more power (hell the current engine has 151hp in the Focus while the Mazda/Fusion/Milan version of the same engine has 160hp) with a choice of a 5-speed stick and 5-speed automatic and some added features that wouldn't make it to the Focus? While the Focus can be had as a 3-door hatch, 4-door seand, and 5-door hatch - offer the Mercury version as a sedan only to make it different from the Focus or maybe even offer it as a 2-door coupe based on the sedan itself. Like offer a bit of a bespoke interior with an optional Nav, give it Xenon headlamps optional, give it LED tail-lamps standard (seems to be one way that Mecury is making themselves different if you look at the Montego), no hubcaps (give them actual rims of some kind), make power windows/doorlocks/remote-keyless standard (as they are optional on the Focus), etc. And of course A DISTINCTIVE FACE AND STYLING. If they could do that, then perhaps Mercury can carve out a bit of their own niche -- and might even compete more with the Mazda3 or even the Jetta.

Again, just my opinion....not sure if anyone out there agrees with me or not on these points.

[nadepalma]

Originally Posted by Achelous

I'll second that. Well put, nadepalma!

Thanks for the thumbs up!

[nadepalma]

Originally Posted by BORG

Lincoln has more brand equity than Mecury and the entry level luxury market is by far the fastest growing segment in the industry. It's one of the reasons Lexus has been so successful in dominating the market. Lincoln is the only NA brand positioned to really target the entry market. Mercury doesn't have the same marketing potential as Lincoln and thus you see Ford trying to expand Lincoln from an exclusive luxury brand to a fuller Lexus-type brand whith MUCH higher sales volume than they have now. We already see the Zephyr outselling the Milan.

These are all very good points, but still, if Lincoln is to take on more of an entry-level luxury role in the Ford Empire (vs. their "traditional" luxury role) - and Mercury is marketed below Lincoln - then you'd have to imagine that Mercury's would become more affordable/etc. and thus sell in larger numbers. You're right, the Zephyr IS selling better than the Milan -- but again, part of this has to do with the distinctiveness and appeal of the vehicle. I think the Milan is a nice piece and looks upscale (though not as upscale as the Zephyr) but again it doesn't look all that different. My concern is that as Ford is staying at the lower end, and now Lincoln is moving down-market (so to speak) then were does that leave Mercury? It'll get squeezed out if they're not careful. So I think they need to move it in an new direction and make it appeal to a different set of buyers.

As for brand appeal, history plays a big factor. But today this can entirely be based on how brands are positioned and marketed. I agree that Lincoln has a lot of cachet, and rightfully so, but Mercury has been an "abused" brand for a very long time (see Jacques Nasser comments from my other post). Mercury has always been a bit of a red-headed-stepchild in the Ford family (kind of akin to how Lancia is "abused" by Fiat and Alfa Romeo to an extent). Ford needs to give them attention and create more awareness. I mean, who would have thought that Lincoln would move "downmarket"? Or that Caddy would suddenly move more upmarket and compete with the Euros on their own turf (still a long, long way to go nevertheless). Or who, a few years ago, would have seen GM moving Saturn more upscale to take the place of Oldsmobile and appeal to an import-crowd of consumers? Or even that Hyundai would be said in the same sentence as Honda and Toyota? I mean, we're living in interesting times in the auto-business and all of these effects have to do with image-campaigns.

Again, this has to do with marketing and positioning -- and that means that Mercury could certainly see a resurgence and capture more attention. Just look at Subaru -- a few years back no one gave them a second look unless they lived in the North and wanted an AWD car. Then the WRX comes out and the whole company is on fire selling what they can. Even the B9 Tribeca sells and that is one ugly looking SUV. Or look at Hyundai as the same example -- they were seen as crap cars on the same level as a Yugo from the 1980s on. Then in the past 5 years they've gotten serious about their products and the previous Sonata, XG300/XG350, and Santa Fe were all strong competitors. Now their next generations models (new Sonata/Azera/new Santa Fe, respectively) are seen as sold offerings with a great deal of appeal. So obviously it can be done.

Mercury needs to emulate this and capture the same attention. All they need is one or two good products to set things up and the rest should follow.

This is just my observation though...I guess I could be wrong.

[SobeSVT]

I agree that Mercury could be a channel for Ford euro imports, but that should happen after the brand is consolidated with solid domestic product. Mercury was founded in 1939 to cover the gap between Ford and Lincoln and avoid the migration of Ford customer to one of the several GM intermediate brands. Whatever identity Mercury has left is profoundly American. So I guess that Mercury is the perfect channel to make a real quality and advanced American car. The imports can be companion models once the brand's credibility has been fixed. We are just at the very early stage of the rebuilding process.

Whether Lincoln becomes the volume leader is irrelevant since Ford has showed the will to allow Mercury to go on. If they were hesitant about Mercury, reading this article would have worried me, but Mercury is not sailing in waters as rough as it used to.

As for the waterfall grill. This has been one of the few or rather the only constant Mercury design features throughout its life. Not all cars have used it but there was always a Mercury with a waterfall grill since 1949. If I am correct Lincoln didn't use a waterfall grille until 1973 when Lee Iacocca decided to revive the Mark series and saw fit to "paste a Rolls Royce grill on a Thunderbird". So the grill with vertical elements is pretty much Mercury and I don't see why they should get rid of it or imitate anyone else. Actually they are doing pretty good things with a more severe interpretation of the "Waterfall" than Lincoln's. I wouldn't mistake one for the other and still feel the family connection.




Finally, FoMoCo Fan if everything goes as planned the Mustang based lincoln will be called the Mark C. I wish Honda wins their law suit so Lincoln has to go back to real names and call it the Continental.

[cfch3399]

I'm still surprised that Mercury has survived this long. How many cars did they sell in 05?

[Butz]

It's Simple! Give Mercury a Mercury Only Car that is desirable!

[elgreen]

One of those Australian Falcons or LTDs sure would make a good Mercury!

[nadepalma]

Originally Posted by Butz

It's Simple! Give Mercury a Mercury Only Car that is desirable!

I would agree with you. Most certainly they need something bespoke to their lineup. The last unique Mercury offering was the Cougar from a few years ago but it didn't sell well -- despite reusing the Ford Contour/Mercury Mystique platform to shave engineering dollars from the budget.

But there seriously needs to be something unique to Mercury that should get some attention.

There was the Mercury Messenger concept from a few years back -- it was stunning. The car was a looker with hints of the the 1963-1967 Corvette, a bit of 1960's Ferrari and even a few modern touches besides. This was what is needed.





The format was simple. Give Mercury a 2-door, 2-seat, RWD sport car based on a shortend Mustang platform. Use a V8 only, IRS and it could have been a cut-rate Vette competitor. Something like that would attract a lot of attention and give Mercury something very unique and desirable for their lineup.

Granted, something like this would only sell in limited numbers and wouldn't offer any kind of volume sales -- but sometimes a halo is needed to set the tone for the rest of the line-up. Just as Plymouth had the Prowler, Dodge has the Viper, Honda has the S2000 -- Mercury could most assuredly use something like this. Besides which, Ford doesn't not have an actual 'Vette competitor. It has all kinds of special edition Mustangs and Cobras, etc. -- but no real 2-door/2-seater to compete with the Vette in it's own territory. This could be soemthing for them to look at (just as Chrysler is thinking of using the Viper platform to create the Chrysler "Firepower" as a Vette competitor) and draw some excitement to Mercury.

I would do it.