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----- Original Message -----
From: Richard A Pyburn <rap777@juno.com>
To: <dakota-truck@buffnet.net>
Sent: Monday, December 18, 2000 4:10 PM
Subject: DML: Mercury on the move?
> Here's an article from CNN financial news that says Mercury may be next
> to go.
>
> http://cnnfn.cnn.com/2000/12/18/home_auto/mercury/
>
> Will Mercury follow Olds?
> Analysts expecting Ford to follow
> competitors in thinning out brand
> lineup
> By Staff Writer Chris Isidore
> December 18, 2000: 12:15 p.m. ET
>
>
> NEW YORK (CNNfn) - The Mercury brand could be on a fast
> ride down a
> dead-end road.
>
> The brand is in a difficult "middle ground" between the
> lower-priced volume
> brands, such as Ford, and the premium brands in the
> Ford Motor Co. family --
> home grown Lincoln, and overseas acquisitions such as
> Volvo, Jaguar, and
> most recently Land Rover.
>
> After last week's move by General Motors Corp. (GM:
> Research, Estimates) to
> phase out the Oldsmobile brand and the announcement by
> DaimlerChrysler
> (DCX: Research, Estimates) a year ago that it would
> drop the Plymouth brand,
> many believe Mercury will be the next model to be
> dropped.
>
> "The underperformance of the
> Mercury brand relative to the rest of
> Ford's brands is glaring," said
> Jonathan Lawrence, analyst with
> Dain Rauscher Wessels, who
> predicts an announcement by Ford
> as soon as the North American
> International Auto Show in early
> January in Detroit. "If you look at the
> Ford brands, every one has a distinctive identity. All
> of the Mercury models are
> basically twins of other Ford vehicles. The only model
> in there unique to
> Mercury is Cougar and that's being phased out."
>
> Ford (F: Research, Estimates) officials deny there's
> any plans to drop Mercury,
> however.
>
> "These rumors have been circulating for 30 years and
> they're still not true," said
> Jim Trainor, spokesman for Mercury. "Mercury makes a
> lot of money for Ford
> Motor Co. The economics are pretty simple. We don't
> have to be the biggest to
> make a contribution."
>
> But even the company admits it is concentrating far
> more new vehicle
> development effort and dollars into the Lincoln brand,
> and relatively little to
> Mercury. The overwhelming majority of Mercury dealers
> are also Lincoln
> dealers.
>
> "That's not to say Mercury will not get new product,"
> said George Pipas,
> market analysis spokesman for Ford. "But in terms of
> the number of new
> products that the Lincoln-Mercury franchises are going
> to see coming to
> showroom, more investment and more product news will be
> on the Lincoln side
> of franchise."
>
> Mercury has seen sales fall, although not quite as
> steeply as Oldsmobile. Still,
> sales of 339,069 vehicles by Mercury through the first
> 11 months of 2000 are off
> 17 percent from year earlier level, as its market share
> has slipped to 2.1
> percent from 2.6 percent in 1999. As recently as 1993
> the brand sold 483,845
> vehicles and captured 3.5 percent of the overall
> market.
>
> But Trainor says that some of the Mercury models are
> doing well in the face of
> the slowdown. He said the Grand Marquis, with sales of
> 114,946 year-to-date,
> should have its best sales in 14 years, although only
> slightly ahead of year
> earlier sales. The Sable, a twin of the Ford Taurus,
> also is ahead of year-ago
> sales through November.
>
> Stepping stone brands become slippery
>
> The middle brands were once seen as stepping stones for
> automakers to move
> their loyal customers from lower-price, entry level
> brands to the higher price
> luxury brands such as Lincoln or GM's Cadillac. But
> those lines have been
> blurring for years, and some competitors, such as
> Toyota Motor Corp. (TM:
> Research, Estimates) and Honda Motor Co. (HMC:
> Research, Estimates) have
> found success introducing luxury brands such as Lexus
> and Acura to the U.S.
> market without offering a middle brand.
>
> Even some of those who see
> a need
> for a Mercury brand say it
> no longer
> serves as a much of a
> transition to
> higher-priced brands as it
> once did.
>
> Casey Johnson, owner of
> Fort Dodge
> Ford Lincoln Mercury in
> Fort Dodge,
> Iowa, a member of the Ford
> Dealers'
> Council, said that most of
> his Mercury
> customers are loyal repeat
> Mercury
> buyers, not people moving
> up the
> chain of brands. But he
> said the brand
> is still important,
> especially to the
> Lincoln Mercury dealers who don't also offer Ford.
>
> "All the high-end cars are nice, but for dealer
> stability volume is key and
> Mercury is still a higher volume brand," Johnson said.
> "I think Mercury will be
> here for many, many years to come."
>
> GM had eight domestic vehicle brands when it announced
> plans last week to
> drop the Oldsmobile line at the end of the product
> cycle of current models.
>
> More complex marketing needs for Ford
>
> While the Ford line-up was once a much simpler, with
> recent overseas
> acquisitions it has become far more complex in terms of
> its marketing needs.
> Ford must manage the three home-grown brands along with
> Mazda, Volvo,
> Jaguar, Aston Martin and the recently acquired Land
> Rover.
>
> "Ford says it is committed to the Mercury brand but
> it's not investing in new
> products," said Mike Flynn, director of office for
> study of automotive
> transportation at the University of Michigan. "It has a
> much more complicated
> set of brands than it had five or six years ago.
> Mercury has a been a less
> visible brand than Oldsmobile in the last five years."
>
> Mercury is also weighted far more to cars than the
> light truck models that have
> grown to capture about half of all U.S. vehicle sales.
> About 78 percent of its
> total sales are in car models, an even higher
> percentage than at car-dominated
> Oldsmobile.
>
> The changes in the U.S. auto market makes ground very
> shaky for the middle
> brands, said Paul Ballew, general director, global
> market and industry analysis
> for GM.
>
> "It's hard to be a niche, unless you're a niche with a
> specific point of
> differentiation. The middle market is a very difficult
> place to be a niche. That's
> lesson of what we've seen in recent years in Plymouth,
> Oldsmobile and
> Mercury."
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