Just change the badge and hope it works for the Mercury brand?
Mercury’s surprisingly high rating — fourth after Buick-Jaguar, Lexus and Toyota — in the just-announced J. D. Power vehicle dependability survey gave a needed boost to Ford Motor Company’s traditional “medium price” brand.
Beginning a couple of years ago, financial analysts and many automotive writers were pronouncing the demise of the Mercury brand. The death sentence was furthered by Vegas investor Kerkorian’s ambassador to Detroit, Jerry York, who told the media that Ford Motor Company should “sell off” Mercury.
If correctly quoted, York should have known better, because unlike the Wall Street analysts and most auto writers, he had considerable Detroit experience. One wisecrack by a Motor City vet put it this way: “Everything analysts know about the auto industry, they’ve learned from riding in New York City taxicabs.”
York’s statement made no sense whatsoever because there was nothing to sell but the brand name, which was hardly the most sought-after following years of neglect and mis-direction by the Dearborn automaker. Mercury, once a stand-alone make established by the Ford Company in 1938, was integrated into corporate planning, engineering, purchasing, and powertrain and assembly production 50 years ago. Unlike a Jaguar or Land Rover or even Volvo, there are no Mercury assets for someone to buy outside the name. Mercurys are retailed by Lincoln-Mercury dealers except in rural areas and small towns where they are sold by Ford-Mercury or Ford-Lincoln-Mercury dealers.
A few years ago in Canada, the company combined the Ford and Lincoln-Mercury dealer bodies into one, Ford-Lincoln, eliminating Mercury Sable and, except for police and taxi, Ford Crown Victoria, leaving Ford Taurus and “Ford” Grand Marquis in those market niches. Some years before, Ford Motor had dropped its Mercury entry-level spinoff of the Ford Escort, never replacing it with a Mercurized Focus, plus knifing both the rear-wheel-drive and short-termed front-wheel-drive Cougar coupes, and most recently the Monterey minivan. In other words, the Mercury line was being thinned. (Likewise, the Lincoln car line was thinned in favor of then-popular trucks/SUVs.)
So what else were the analysts and auto media to think besides an imminent death? Ah, but they weren’t reading the tea leaves right.
Ford’s present strategy for Lincoln and Mercury grew out of the company’s experience in Europe, where by American standards; cars of all makers are hugely overpriced-without much complaint from compliant customers. The first effort at increasing revenue per vehicle was the ill-fated Euro Mondeo North American version, Ford Contour and Mercury Mystique replacing lower-priced Tempo and Topaz, a move that fell far short of success, perhaps because the overall market shifted to SUVs in the Nineties.
In any event, the L-M strategy now is to expand the Lincoln line because Lincoln brands can be sold at significantly higher bucks than Mercury brands. So you have a baby Lincoln called MKZ, an upscale version of the Ford Fusion and the Mercury Milan (I liked the Zephyr name better, but it didn’t fit with the current Lincoln fad of “letter” names), the Lincoln MKX upscale version of the Ford Edge (but no Mercury version), and this year the Lincoln MKS, upscale version of the renamed Ford Taurus, while the companion Mercury Sable is being retired this spring. And that’s not counting the “trucks”-especially the Navigator version of the Ford Expedition, again with no Mercury version.
In other words, why produce a Mercury version of a Ford when you can get a lot more bucks by branding it a Lincoln? For example, the MKZ is priced about $10,000 over the Milan, and the Navigator some $17,000 over the Expedition. Of course there are standard equipment differences as you go upscale, but you get the idea.
It’s clear from the relative popularity of Mercedes, BMW and Lexus that–until the economic meltdown–today’s boomer buyers are as willing to shell out big bucks for their showy wheels as for their mega-homes, and the Detroit domestics are finally catching on to this particular branding-up game. This is a long way, and on a different route, from Alfred P. Sloan’s classic “step-up” marketing scheme at GM in the 1920s. In Ford’s case, as noted above, increasingly it is re-branding cars and trucks as Lincolns rather than making the intermediate stop at Mercury.
A recent in-depth article in Business Weekabout Ford’s CEO Alan Mulally, obviously based on extensive interviews with the subject, handled the Lincoln-Mercury plan this way: “Lincoln will focus on premium sedans and SUVs while Mercury will sell premium small cars and crossovers.” This suggests the crystal ball may hold a Mercury version of the Euro Ford Fiesta and perhaps a smaller Mercury crossover than in Ford’s North American portfolio at present.