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End of the Road for Mercury?

Recent reports suggest that Ford Motors is thinking of ending the Mercury line of vehicles. Industry analysts say that when that happens, the company can now focus its efforts on Ford and Lincoln brands. But the officials from Ford, it was reported has denied the news. Analyst Aaron Bragman of the economic forecasting firm Global Insight sings a different tune and says that with the declining sales of Mercury, then this particular brand is expandable. A former auto executive Jerome York, who advises the investment company of Kirk kerkorian mentioned that the struggling automaker would benefit from retiring the auto brand. The opinion of Jerome York is significant since the Kerkorian’s Tracinda Corp. recently announced that it owned 4.7 percent of Ford and mentioned that the company might raise its stakes to more than 5.5 percent. Another sign that can tell if the brand is indeed is in a downward move is thru a look at the auto showrooms across the US. During the 1980s, Mercury sells half million units a year. But if we take a look at the figures last year, we see that the brand only sold 168,000 cars and sport utility vehicles last year. US sales are down 23 percent this year, the biggest drop for any brand except Chrysler and Hummer. Some analysts point to other factors that may drive the retirement of Mercury. They point to the aging product line-up and the brand’s customer base as well. Based on the research of J.D. Power, the average Mercury buyer is 55 which is well above the industry average of 47. Brand loyalty is another thing; 35 percent of Mercury owners will buy the same vehicle as compared to the industry’s average pegged at 45 percent.

But no matter what the analysts says, Ford thru its spokesman Mark Schirmer said that the rumours of Mercury’s death have been greatly exaggerated. He added that they have been very clear with the dealers that there have been no decisions made to discontinue the brand.

Giving up one brand or a line of vehicle isn’t easy. In fact it’s a great work and a lot of money is needed as well. Giving up one car brand is a lont term process and cna be very expensive. Just take the case of general Motors when it decided to set aside Oldsmobile eight years ago. GM set aside almost $1 billion to handle the tranistion and then money to spend in more than five years in battling dealer lawsuits. So right now, nothing is certain. Mercury will still be seen on auto showrooms.

If indeed the brand may bow in the coming years, then this is a sad ending to one of those brands with enduring history. The brand was launched in 1939 as a step-up car for buyers between economy Fords and upscale Lincolns. Mercury vehicles are known for their powerful V8 engines. It’s place in pop culture has been sealwed when James Dean drove a black ’49 Mercury Club Coupe in the 1955 movie ” Rebel Without a Cause”.




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