Wednesday, February 12, 2003
David Guralnick / The Detroit News
By Mark Truby / The Detroit News
CHICAGO -- In an industry where the weak get swallowed faster than goldfish in a piranha tank, Ford Motor Co.'s Mercury brand is an unlikely survivor.
Slotted between Ford and Lincoln, Mercury's brand image has become more fuzzy, with its owner body aging and its sales dropping considerably in recent years.
But despite rumors of its demise, Mercury won't be joining Oldsmobile and Plymouth in the automotive scrap yard any time soon.
This week at the Chicago Auto Show, Ford executives hope to build a convincing case that Mercury has a bright future filled with distinct new vehicles, and, hopefully, improved sales.
Mercury pulls the wraps off the upscale Monterey minivan today in Chicago. The minivan based on the new Ford Freestar goes on sale later this year. Mercury also plans to show off sketches of a new large sedan called the Montego, which arrives in showrooms next year.
Two more new Mercury vehicles are in the pipeline -- a small sport-utility based on the Ford Escape -- available next year -- and a new mid-size sedan due out in 2005.
"Mercury is not going anywhere," Darryl Hazel, president of Lincoln Mercury, said in an interview this week. "We now have the products that communicate the revitalization of Mercury. We are here to do business in 2003 and beyond."
Ford is spending several hundred million dollars to produce the four new Mercury vehicles. It's an investment that could prove to be a bargain if Mercury regains its footing.
A healthy Mercury not only generates profits, but is critical to the success of its Lincoln stable mate. Lincoln Mercury dealers say they could not survive selling Lincolns alone.
And if Lincoln doesn't rebound from two years of financial losses, Ford's push to return to solid profitability by mid-decade isn't likely to succeed.
The race to restore profits explains why Ford Chairman Bill Ford Jr. made shoring up Mercury a priority shortly after becoming CEO 15 months ago.
"Mercury is a very important part of our Lincoln distribution plan," said Jim O'Connor, head of Ford's North American sales and marketing. "There's clearly a place for Mercury."
Not everyone is so sure. Analysts Scott Hill of Sanford C. Bernstein and Co. in New York questions why Ford continues to pour money into a brand that's clearly on the decline. Mercury sold 263,200 vehicles last year, its lowest total since 1959.
"Our view is they shouldn't just keep investing in a brand that doesn't resonate with buyers," Hill said. "Mercury faces negative headwinds and it seems to us that that money would be better spent elsewhere."
Mercury, like any other car brand, will succeed or fail on the strength of the new vehicles it is bringing to market. Hazel says Mercury's motto is simple: "Modern design, smartly done for the value-discerning consumer."
With the Ford Explorer-based Mountaineer SUV that debuted in 2001, Mercury was able to create a successful and distinct variation of a Ford product.
But the Mercury Mystique sedan, Cougar coupe and Villager minivan produced disappointing sales and were discontinued.
The Mercury Marauder, a 300-horsepower retro sedan introduced last year, also landed in showrooms with a thud.
The new Monterey minivan offers features such as a fold-flat third-row seat, optional heated and cooled front seats and side curtain air bags. Still, it will be very similar to the Ford Freestar, which also debuts this year.
Plans to give the Monterey an exclusive powertrain option and a more distinct interior were scraped to save money, according to one former Lincoln Mercury executive.
Ford officials say future Mercury vehicles, such as the Montego sedan, will be more distinct from their Ford counterparts.
Lincoln Mercury dealers heard details of the product plans last week at the National Automobile Dealers Association convention in San Francisco.
"Everybody is feeling much better," said Paul Sabatini, head of Momentum Lincoln Mercury in Monroe. "Six or eight months ago we didn't know if we had a minivan or a small SUV coming. Now we know we have a solid future."
David Guralnick / The Detroit News
By Mark Truby / The Detroit News
CHICAGO -- In an industry where the weak get swallowed faster than goldfish in a piranha tank, Ford Motor Co.'s Mercury brand is an unlikely survivor.
Slotted between Ford and Lincoln, Mercury's brand image has become more fuzzy, with its owner body aging and its sales dropping considerably in recent years.
But despite rumors of its demise, Mercury won't be joining Oldsmobile and Plymouth in the automotive scrap yard any time soon.
This week at the Chicago Auto Show, Ford executives hope to build a convincing case that Mercury has a bright future filled with distinct new vehicles, and, hopefully, improved sales.
Mercury pulls the wraps off the upscale Monterey minivan today in Chicago. The minivan based on the new Ford Freestar goes on sale later this year. Mercury also plans to show off sketches of a new large sedan called the Montego, which arrives in showrooms next year.
Two more new Mercury vehicles are in the pipeline -- a small sport-utility based on the Ford Escape -- available next year -- and a new mid-size sedan due out in 2005.
"Mercury is not going anywhere," Darryl Hazel, president of Lincoln Mercury, said in an interview this week. "We now have the products that communicate the revitalization of Mercury. We are here to do business in 2003 and beyond."
Ford is spending several hundred million dollars to produce the four new Mercury vehicles. It's an investment that could prove to be a bargain if Mercury regains its footing.
A healthy Mercury not only generates profits, but is critical to the success of its Lincoln stable mate. Lincoln Mercury dealers say they could not survive selling Lincolns alone.
And if Lincoln doesn't rebound from two years of financial losses, Ford's push to return to solid profitability by mid-decade isn't likely to succeed.
The race to restore profits explains why Ford Chairman Bill Ford Jr. made shoring up Mercury a priority shortly after becoming CEO 15 months ago.
"Mercury is a very important part of our Lincoln distribution plan," said Jim O'Connor, head of Ford's North American sales and marketing. "There's clearly a place for Mercury."
Not everyone is so sure. Analysts Scott Hill of Sanford C. Bernstein and Co. in New York questions why Ford continues to pour money into a brand that's clearly on the decline. Mercury sold 263,200 vehicles last year, its lowest total since 1959.
"Our view is they shouldn't just keep investing in a brand that doesn't resonate with buyers," Hill said. "Mercury faces negative headwinds and it seems to us that that money would be better spent elsewhere."
Mercury, like any other car brand, will succeed or fail on the strength of the new vehicles it is bringing to market. Hazel says Mercury's motto is simple: "Modern design, smartly done for the value-discerning consumer."
With the Ford Explorer-based Mountaineer SUV that debuted in 2001, Mercury was able to create a successful and distinct variation of a Ford product.
But the Mercury Mystique sedan, Cougar coupe and Villager minivan produced disappointing sales and were discontinued.
The Mercury Marauder, a 300-horsepower retro sedan introduced last year, also landed in showrooms with a thud.
The new Monterey minivan offers features such as a fold-flat third-row seat, optional heated and cooled front seats and side curtain air bags. Still, it will be very similar to the Ford Freestar, which also debuts this year.
Plans to give the Monterey an exclusive powertrain option and a more distinct interior were scraped to save money, according to one former Lincoln Mercury executive.
Ford officials say future Mercury vehicles, such as the Montego sedan, will be more distinct from their Ford counterparts.
Lincoln Mercury dealers heard details of the product plans last week at the National Automobile Dealers Association convention in San Francisco.
"Everybody is feeling much better," said Paul Sabatini, head of Momentum Lincoln Mercury in Monroe. "Six or eight months ago we didn't know if we had a minivan or a small SUV coming. Now we know we have a solid future."