Wednesday, June 2, 2010

What Mercury's Demise Means

The wait is over, Ford announced today that Mercury production will halt in the fourth quarter of this year. Of course, Ford has its glass half-full saying that shutting down Mercury is only an opportunity to improve as a company. The first few paragraphs make it clear.

"Ford Motor Company will expand and enhance its Lincoln brand lineup with seven all-new or significantly refreshed vehicles in the next four years as part of an aggressive growth plan focused on standout product design, class-leading technology and new powertrains – all aimed at competing with Cadillac and Lexus in North America.

Ford also will end production of Mercury vehicles in the fourth quarter of this year to fully devote its financial, product development, production and marketing, sales and service resources toward further growing its core Ford brand while enhancing the Lincoln brand."

Nevertheless, the demise of Mercury does show that today's automotive consumer demands more than ever before. As a brand Mercury cars were slightly fancied up and rebadged versions of everyday mainstream Fords. This no longer works, see General Motors for further evidence.

This is not to say that consumer's aren't willing to pay more for a premium version of mainstream cars. In fact, Ford's focus on the Lincoln brand shows that quality "badge engineering" is the future. The Lincoln lineup is completely based on Ford products, yet they look different inside and out. Even Lincoln's closest competition in Cadillac and Lexus (according to Ford) features a lineup that relies heavily on modified platforms of mainstream cars.

In this sense Ford's emphasis on significantly increased emphasis on the Lincoln brand will be paramount. Ford is going to have to prove to the public that there is a significant difference between a Ford and a Lincoln for the brand to survive and not follow Mercury's fate. Based on the quality products coming out of Ford for the past year, it looks like Lincoln is poised to regain some of its former glory in the coming years.

The MKX is an appealing product, but is it too similar to its Ford counterpart to be considered luxury?

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