[Vinsetta]

Dealers worry that Mercury is a goner

With no product in the pipeline, Ford dodges questions about the declining brand's fate.

Bryce G. Hoffman / The Detroit News

After enduring years of speculation about the future of the Mercury brand, dealers are asking Ford Motor Co. for a straight answer to a simple question: Does Mercury have a future?

http://www.detnews.com/apps/pbcs.dll/article?AID=/20080527/AUTO01/805270325

 

[mikmak]

If only...

So many opportunities they could have/may take.

 

[mikmak]

On second thoughts that Mondeo is pretty ugly.

 

[Uzzy]

Hwat? Just becuase the brand is completely irrelevant and has been for several years, they think Ford is going to get rid of them? These dealers worry too much...or do they?

The headlights on that Mondeo remind me of the last Cougar. The eggcrate in the bumper do nothing for the looks of that car.

 

[CamaroCrazy]

Wouldn't surprise me. Why doesn't Ford just kill the brand, take products like the Sable and the Mariner, add some higher quality lux touches and more standard technology, rebadge them as Lincolns, and ta-da! Lincoln has a much broader portfolio of vehicles and Lincoln-Mercury dealers lose little to nothing. If anything, they would gain a more distinctive product focus.

 

[nadepalma]

Some added fuel for the continuing "Mercury debate"...

SOURCE: Detroit News

Tuesday, May 27, 2008
Dealers worry that Mercury is a goner
With no product in the pipeline, Ford dodges questions about the declining brand's fate.
Bryce G. Hoffman / The Detroit News

After enduring years of speculation about the future of the Mercury brand, dealers are asking Ford Motor Co. for a straight answer to a simple question: Does Mercury have a future?

In February, members of the Lincoln Mercury National Dealer Council asked Ford executives to outline their strategy for Mercury. If it has a future, they want to see the products. If it does not, they want to know now so they can manage their business accordingly.

According to dealers, Ford agreed. The Dearborn automaker told them it would discuss the fate of Mercury at a dealer meeting that was then planned for April in Las Vegas. Company sources say no such commitment was made.

Either way, Ford canceled that meeting. The company is now planning a September meeting in Detroit -- a meeting dealers hope will provide a definitive answer to their question.

"The company is in (the) process of developing a strategy and has committed to communicating this plan to the Lincoln Mercury dealer network in the fourth quarter," the council said in a letter to its members dated April 28. In private conversations with The Detroit News, several Mercury dealers said they have grown weary of carefully nuanced statements from Ford executives like: "We have no plans to kill Mercury at this time." But they acknowledge that Ford is in a difficult position.

If Ford says that Mercury will not be killed, dealers want to see the products to back that up. The problem is that other than a hybrid version of the Milan and a freshening of the conventional model due out late this year, there are none. On the other hand, if Ford admits that Mercury is dead, it would deal another blow to the brand's sales and invite lawsuits from dealers.

That is a risk Ford seems unwilling to take.

When asked to comment on the future of Mercury, Ford spokeswoman Jennifer Flake would say only: "We've been investing, and continue to invest, in new Mercury product."

As proof, she pointed to the new versions of the Milan but would not discuss any product plans beyond those.

Pipeline is empty
"It's clear that there is no new product for Mercury," said analyst Jim Hossack of AutoPacific in Los Angeles. "The plan is not to kill Mercury. The plan is to let it die."

The difference is significant, he said.

In 2000, General Motors Corp. unveiled a plan to phase out its Oldsmobile brand over four years and spent about $1 billion paying off dealers and suppliers as a result. But Chrysler LLC, which simply stopped producing Plymouths after it merged with Germany's Daimler AG, managed to avoid much of that cost, Hossack said.

People familiar with Ford's plans for the brand say Mercury is dead, but are quick to add that Ford has changed its mind about Mercury at least half a dozen times during the past three years.

When Mark Fields took over as head of Ford's North American operations in 2005, a review of Mercury's viability was at the top of his agenda. At the time, Ford concluded that the cost of eliminating Mercury exceeded the cost of keeping it, given that the rebadged Fords being sold as Mercurys required little in the way of re-engineering.

But the situation at Ford has gotten worse. The automaker has been unable to stop its U.S. market share decline, and overall sales have fallen with the rest of the U.S. auto market.

Ford had some success with its efforts to reinvent Mercury, bringing in customers who had never before considered a Ford product -- particularly professional women. Yet Mercury's sales have dropped more than 30 percent since April 2006 and show no sign of improving.

Last week's announcement that Ford will miss its goal of returning to profitability in 2009 underscores these challenges.

MORE HERE

 

[nadepalma]

Several, like Dave Knittel, general manager of Charlotte County Lincoln Mercury in Florida, say Mercury sales still account for more than half their overall sales volume. He thinks Ford is trying to force Ford and Lincoln Mercury dealers to consolidate.

I think that if this happens, it would be horrible - especially for Lincoln.

I know that there are some Ford-Lincoln-Mercury stores out there - and even a few Ford-Mercury stores - but having all theree brands sold under one roof I feel would damage the Lincoln image and hurt whatever little "image" Mercury has left.

Chrysler, LLC can get away with this - mostly because the Chrysler brand no longer carries the cachet or "luxury image" that it once had years ago. It's now a slightly upscale brand - but certainly not planted in the luxury segment. It's near-luxury on a good day. So selling an "SUV-centric" Jeep product next to a "mainstream/bread n' butter" Dodge vehicle on the same showroom floor as a "slightly upscale" Chrysler car makes a good deal of sense.

But for Lincon, it would be a disaster. Lincoln still has an upscale and "luxury image" event thouth it has sold warmed over products for the last decade. True, it can't really compete in product and stature with companies like Lexus or Mercedes-Benz - but it still has the cachet to do so if Ford puts some muscle behind it.

If they merge them all under one roof 5 years out, I feel that selling a $13,500 Ford Fiesta on the same showroom floor as a $42,000 Lincoln MKS would only harm the brand.

So they REALLY need to think about this. If Ford is looking to eventually rebuild Lincoln (as GM as done with Caddy) to make it a true global-luxury car brand - then pairing them will be a disaster. You dont' see many Lexus/Toyota, Honda/Acura, Infiniti/Nissan, or Audi/Volkswagen stores. The sales channels are distinct and the images intact. Ford wants to consolidate their dealership network and that's a good thing - but not by compiling all brands under one roof. Instead they should pare back the number of stand alone Ford and Lincoln-Mercury stores. Less stores should equte to more sales per dealership to make them profitable.

I can just imagine what it would do to sales to see a similarly shaped Navigator or MKZ sold on the same showroom floor as an Expedition or Fusion. Not to mention luxury minded customers want a luxury experience - and that means being catered to and sitting in lavishly decorated showrooms - dont think that the average Ford store does this.

 

[PA Dweller]

If they merge them all under one roof 5 years out, I feel that selling a $13,500 Ford Fiesta on the same showroom floor as a $42,000 Lincoln MKS would only harm the brand.

Stupid question, but why would this hurt the brand? Chevy sells the Corvette next to lower cars, like the Aveo and Cobalt but I never heard people complain about it. I have even seen Chevy/Cadillac dealerships. Just curious.

 

[mgescuro]

What I don't understand is why dealers would be "worried.
It's not like they are forced out of the market or anything like GM did with Oldsmobile.

There are no stand-alone Mercury dealerships. There haven't been in decades!

All Ford needs to do is reassure these dealers by strengthening the Lincoln product line.

 

[nadepalma]

Stupid question, but why would this hurt the brand? Chevy sells the Corvette next to lower cars, like the Aveo and Cobalt but I never heard people complain about it. I have even seen Chevy/Cadillac dealerships. Just curious.

The Corvette, from its inception, was always considered an "affordable Sports Car". It always has been. It kinda/sorta goes hand in hand with the whole "mission" of Chevrolet as they try and reach the most number of people.

Today the Corvette is far more luxurious, sophisticated, and upscale than it ever was - but still considerably cheaper than its competitors and "affordability" factors in big.

That being said, there are many Chevy dealerships that have gone out of their way to treat their Corvette customers like Caddy or Saab would treat theirs. A good move I think.

But as it relates to Lincoln, the difference is that Lincoln was never meant to be marketed or sold in such a way. True, in some markets it works this way - and as you point out, there are some Chevy-Caddy stores too - but to remain (or move back to being) upscale they should have a separate dealership network so they can coddle their clients and cater to their needs.

That's what many other high-end brands do. When you go to a Lincoln-Mercury dealership, you just expect to be treated better than you would at a Ford dealership, etc. And since Lincoln has a LOT of ground to make up for in the perception/product department, it seems this would be the best way for them to do it without delivery a confused dealership experience to potential buyers.

Just my take on it.

 

[PA Dweller]

The Corvette, from its inception, was always considered an "affordable Sports Car". It always has been. It kinda/sorta goes hand in hand with the whole "mission" of Chevrolet as they try and reach the most number of people.

Today the Corvette is far more luxurious, sophisticated, and upscale than it ever was - but still considerably cheaper than its competitors and "affordability" factors in big.

That being said, there are many Chevy dealerships that have gone out of their way to treat their Corvette customers like Caddy or Saab would treat theirs. A good move I think.

But as it relates to Lincoln, the difference is that Lincoln was never meant to be marketed or sold in such a way. True, in some markets it works this way - and as you point out, there are some Chevy-Caddy stores too - but to remain (or move back to being) upscale they should have a separate dealership network so they can coddle their clients and cater to their needs.

That's what many other high-end brands do. When you go to a Lincoln-Mercury dealership, you just expect to be treated better than you would at a Ford dealership, etc. And since Lincoln has a LOT of ground to make up for in the perception/product department, it seems this would be the best way for them to do it without delivery a confused dealership experience to potential buyers.

Just my take on it.

You bring up good points. When my parents were looking for their last vehicle we got the best customer service from a Ford/Mercury dealer. The Cadillac dealership we went to was terrible, which was unexpected.

 

[nadepalma]

What I don't understand is why dealers would be "worried.
It's not like they are forced out of the market or anything like GM did with Oldsmobile.

There are no stand-alone Mercury dealerships. There haven't been in decades!

All Ford needs to do is reassure these dealers by strengthening the Lincoln product line.

I agree Marc, but I would think that this would take some time to do. Flushing out Lincoln's lineup will take years. And surviving between now and then may be awfully hard with little refreshend Mercury products, etc. It may be all in the logistics.

But perhaps that's what Ford wants. They want less Lincoln-Mercury showrooms. If they dont consolidate all three brands under one roof (again I think it's a mistake) perhaps they are going to just hope to see some locations give up their franchises altogether. Less dealerships will mean more profitable dealerships to those who remain, as their volume would increase.

I already know in my area who just gave up their franchise to become a used car dealership; others may follow.

Plus, if they killed Mercury tomorrow and we have only Lincoln locations moving forward, then the owners may be worried not only about the volume and showroom traffic, but also the kind of customers they are attracting.

Mercury may be a lot of things, but it certainly has a different demographic of customers than Lincoln does. They tend to be younger, a higher percentage of women and minorities, and wouldn't consider another Ford product. You can always get those folks in the showroom and try to flip them into a Lincoln. But if they dont show up altogether, that may be tough to do.

Also, the price point is considerably lower with Mercury as part of the franchise. The Milan starts at like $19,400 or so. The MKZ starts at nearly $30,000. Automatically you are excluding a number of customers right off the bat.

The only way to make up for this is either to introduce a smaller-than-MKZ product (maybe they should take a page out of Volvo and Acura's book and introduce a Focus based C-segment product akin to the RSX, TSX, C30, S40) in the mid-$20K range or keep Mercury viable as the feeder brand.

I see your point - but if I were a dealership, I'd be awfully worried unless these matters were addressed.

 

[mgescuro]

I agree Marc, but I would think that this would take some time to do. Flushing out Lincoln's lineup will take years. And surviving between now and then may be awfully hard with little refreshend Mercury products, etc. It may be all in the logistics.

WEll, I don't believe Ford would pull the plug on mercury for at least 3-4 years. That would give more than ample time to revamp the Lincoln lineup.

If product were simply the issue, there are a number of things Ford could do to sustain Lincoln, like create a "Mark XI" coupe on the Mustang's platform.

that's what Ford wants. They want less Lincoln-Mercury showrooms. If they dont consolidate all three brands under one roof (again I think it's a mistake) perhaps they are going to just hope to see some locations give up their franchises altogether. Less dealerships will mean more profitable dealerships to those who remain, as their volume would increase.

Yes. I agree that consolidating Ford dealerships under one roof is a big mistake. It's the same issue I have with GM's consolidation of its own dealership channel. Though, it's a lesser degree with Ford-Lincoln because the "brand difference" between the 2 isn't as dramatic as Chevy-Cadillac.

Plus, if they killed Mercury tomorrow and we have only Lincoln locations moving forward, then the owners may be worried not only about the volume and showroom traffic, but also the kind of customers they are attracting.

That would be rectified by expanding the Lincoln lineup.
Add a 2 seat mid-range roadster. Add a Mark XI sport coupe. Add a MKZ (or MKS) wagon/hatch. Refresh the Town Car.
You'd have a more expansive lineup than Cadillac, albeit one that's a notch below Cadillac at the moment. But then Ford can work on a 3-5 year plan to boost Lincoln's image.
So in 10 years, Lincoln can at least be where Cadillac is right now.

Unfortunately, that will take a significant amount of money that Ford really can't afford at the moment.

e point is considerably lower with Mercury as part of the franchise. The Milan starts at like $19,400 or so. The MKZ starts at nearly $30,000. Automatically you are excluding a number of customers right off the bat.

But what does Ford want Lincoln to be? Does it want to chase Cadillac again? If so, then Lincoln's got to think global. And the price point will be appropriate. however, it's going to take a significant amount of time and money to get Lincoln up to speed. And unlike Cadillac's decision to target BMW as a competitior, I believe Lincoln should be targetting Mercedes (which is what I believed Cadillac should have done in the first place).

The only way to make up for this is either to introduce a smaller-than-MKZ product (maybe they should take a page out of Volvo and Acura's book and introduce a Focus based C-segment product akin to the RSX, TSX, C30, S40) in the mid-$20K range or keep Mercury viable as the feeder brand.

I believe that will be a necessity down the road as well.

Ford just needs to be careful not to step on Volvo's toes, but seeing as how Ford was able to more than adequately distinguish between the PAG brands, I don't see an issue with this going forward.

 

[61BelAir]

At the L.A. Auto Show this year while walking through the Mercury display it was quite sad to see there was basically no one walking around looking at the Mercury vehicles. It was like a ghost town.

 

[Uzzy]

At the L.A. Auto Show this year while walking through the Mercury display it was quite sad to see there was basically no one walking around looking at the Mercury vehicles. It was like a ghost town.

I don't even remember seeing the Mercury display at the NAIAS. I saw Ford and Lincoln...but Mercury?

 

[61BelAir]

I don't even remember seeing the Mercury display at the NAIAS. I saw Ford and Lincoln...but Mercury?

you know i might be thinking about last years show! anyways, it was a ghost town regardless. It kind of reminded of how the Hyundai and Kia displays use to look like 10+ years ago when all they had to offer was junk.

 

[t-rex]

Seriously, other than the odd classic Cougar fan or someone with a strange affinity for the brand, would anybody miss Mercury?

 

[nadepalma]

I believe that will be a necessity down the road as well.

Ford just needs to be careful not to step on Volvo's toes, but seeing as how Ford was able to more than adequately distinguish between the PAG brands, I don't see an issue with this going forward.

Unless of course our friends at FoMoCo are planning on selling Volvo and just concentrate on Ford, Lincoln, Mazda - and maybe Mercury.

If that happens, then perhaps we may see Lincoln taking on more "fuel-conscious" niches like the TSX/RSX/C30/S40 style product in a quest to be more "near-luxury" in the short term?

I have no doubt Ford could very well distinguish between them all if they wanted to - the question is IF they will or not.

As it relates to Mercury, though, who knows at this point what it will mean. I think that even folks who want to see Mercury survive (me includede) are just thinking "DECIDE ALREADY, either put some money and product behind it or put us all out of our misery", etc. Either make it a "Scion-esque" brand, a "hybrid/green" brand, give it some product to make it fully "near-luxury" and push Lincoln fully into the "luxury" realm, or whatever - but do it fast!

 

[megeebee]

This says it all:

Pipeline is empty
"It's clear that there is no new product for Mercury," said analyst Jim Hossack of AutoPacific in Los Angeles. "The plan is not to kill Mercury. The plan is to let it die."

The difference is significant, he said.

In 2000, General Motors Corp. unveiled a plan to phase out its Oldsmobile brand over four years and spent about $1 billion paying off dealers and suppliers as a result. But Chrysler LLC, which simply stopped producing Plymouths after it merged with Germany's Daimler AG, managed to avoid much of that cost, Hossack said.

For PR reasons Ford needs to verbally support Mercury. If Volvo ends up being sold-off, and Ford execs were on record that Mercury was being killed, that would leave the entire Ford Motor Company with only 2 viable brands. That would kill the stock price and worry all investors in the company. Lincoln isn't quite full yet, either. Once all the product planned for Lincoln is in production niether the dealers, nor the public, will notice Mercury's absence.

 

[2b2]

MERC IS... The Reeaall Thing!

^^ Lincoln, with all its hype, STILL hasn't outsold Mercury
for Any month, Ever, that I've seen
maybe the people are worrying about the wrong brand?

...I have no doubt Ford could very well distinguish between them all if they wanted to - the question is IF they will or not.

...even folks who want to see Mercury survive (me included) are just thinking "DECIDE ALREADY, either put some money and product behind it or put us all out of our misery", etc... ...but do it fast!

I'm cutting back on replying in Merc-threads if I don't like the thread-title
so here's a quote from elsewhere
[quote='PREMiERdrum' at BON]
I see the dealers concerns, but how soon would we see "new products" in the pipeline if they were there?

We know that the new '10 Milan (including the Hybrid) is coming soon, and the Mariner was just redesigned, then getting more upgrades for 2009.
What does that leave?
The Mountaineer will soldier on through this Explorer's product cycle.
The Sable... ...is also questionable as the next new Taurus comes out, but what would we expect to have seen?
All we know of the Taurus is that it made Big Al cry and in the fuzzy picture it looks pretty good.

Mercury still serves a purpose in the L/M showroom. I don't see the current situation as pointing to Mercury's demise. It is doing exactly what it is intended to do, and might get some attention once the Ford and Lincoln brands are through their makeover.
[/quote]
so I'm marking my calendar for September - the MEETING,
for the superTaurus's & superDuperSable's intro,
& going on vacation
and composing lyrics to more Merc-songs (see post-title or link)
unless
Fomoco comes to it senses and starts building Mercury C-170's on July21 alongside the Focii

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