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Again the Question: Will Mercury Survive?

Executive Summary

With the Mercury brand and the number of Lincoln-Mercury dealerships continuing to erode, Ford Motor Co. is holding firm to a strategy of maintaining Lincoln-Mercury stores in the top 50 markets. As the Mercury line soldiers on with with only five models, and no new models being rebadged for Mercury from its parent Ford brand's 15 cars and trucks, the number of Lincoln Mercury dealerships remains

With the Mercury brand and the number of Lincoln-Mercury dealerships continuing to erode, Ford Motor Co. is holding firm to a strategy of maintaining Lincoln-Mercury stores in the top 50 markets.

As the Mercury line soldiers on with with only five models, and no new models being rebadged for Mercury from its parent Ford brand's 15 cars and trucks, the number of Lincoln Mercury dealerships remains on a skidding course.

Only 357 of them remained in operation at the end of 2008. This was 40% below the 2005 year-end total and company sources say the exclusive L-M count is continuing to descend as Ford dealerships consolidate with L-M stores.

There now are 912 dealerships that sell all three of the auto maker's brands: Ford, Lincoln and Mercury. “That's up 22% from 2005 and will continue to grow in metro markets under our three-year-old consolidation plan,” says Jim Farley, Ford Motor's group vice-president for marketing and communications.

He declines to reveal how many L-M exclusive stores operate in the top 50 markets, but did affirm that “the business case for Mercury as a dual for the Lincoln or Ford brands has diminished in the U.S.”

Ford ended Mercury in Canada seven years ago and rebadged its models as Lincolns.

Mark Fields, Ford's Americas president, says that Ford still is requiring Ford dealers consolidating with L-M stores to maintain separate showrooms, adding that “it's important that our dealers focus on the Ford brand.”

Lincoln-Mercury sales in the first half of 2009 were at 133,418 units, a 32.4% drop compared to year-ago, according to Ward's data.

In a recent Fortune magazine story, Ford Executive Chairman Bill Ford declined to comment when asked whether Ford was allowing Mercury “to wither away.”

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