Depending upon mindset, the word 'Mercury' will conjure up images of either: Olympic God, planet, fluid metal or for many American's Ford's upper mainstream automotive brand. Look into Roget's Thesaurus at the associative derived term 'Mercurial' and we see the following
“changeful, unstable, moving, speedy, light-minded, irresolute, capricious, excitable”
Most definitely from from the 1930s to the 1950s (and even as far as the early 1970s, these adjectives reflected the excitement of a middle-class brand which, riding the wave of American consumerism. An aspirant marque for millions who – Ford loyal – sought one day to reach the dizzying heights of Lincoln as so beloved of the country's 20th century Presidents
But since the mid 1970s these adjectives have slowly eroded, the fiscal pressures of the 70s and 80s remoulding Mercury as less of a true mid-line independent, and more of a poor dependent relation, alternately passed between Ford and Lincoln divisions. Although by this time the policy of platform-economies had been utilised, the obviousness of the exploitation had worn even long-time buyers' loyalties thin. When - as most evident in the 80s – badge engineering reigns, product and marque differentiation obviously wains and so creates opportunities for others.
In Mercury's case (as with Buick, Oldsmobile & Plymouth) the influx of Japanese near-luxury brands of Lexus, Acura and Infiniti. But the real blow came when these new near-luxury brands were able to climb up the price ladder and their mainstream counterparts became the 2nd wave of competition for the US nameplates with Camry, Accord and Q series
The truth was that the fiscal calamities of the 70s eroded the core strength of Ford, and so by best protecting its jewels of Blue Oval and Lincoln, essentially forfeited the ability to compete in the mid-stream aspirant sector. However, although a calamity for vehicle enthusiasts, by continuing Mercury in the portfolio as essentially an off-shoot sibling from Ford and Lincoln platforms gave FMC the ability to essentially create a copy+ business model which provided a line-up of vehicles against which, in in-house accounting terms, the investment base was comparatively low; much absorbed by either the core Ford programme, a Lincoln programme or by playing the European card as it did with the Merkur sub-brand for Euro markets, or by importing Ford Europe cars and re-branding them as it did with Capri and (7th Gen) Cougar.
And that essentially has been the Mercury ploy by FMC for nigh-on 30 (some say 60) years – the ability to play the investment cost numbers game, and that's why we've witnessed the 'dependent' division ply between Ford-Mercury vs Mercury-Lincoln re-organisation after re-organisation.
Of course FMC has endeavoured to maintain character through 'upscale' cosmetic treatments, higher specification feature/technology and a re-drawn logo/badge, but the “inconsistancy of consistency” with Ford brethren cars are plain to see with Milan, Sable, Mariner and Mountaineer vehicles. The true present irony is that the only non-shared vehicle being the Grand Marquis, now that Crown Victoria is not publicly sold (only to Government & Fleet). As a throwback of yesteryear, it is a symbol of an ongoing, but soon to be extinct, reflection of the brand itself.
But of course Mercury management are keen to demonstrate the viability of the brand. (Indeed within FMC the ability to keep the brand active in the marketplace is seen as a 'baptism of fire' amongst the senior auto-execs, and can make or break a career! Insiders don't want it, but once alloted fight like hell to maintain the Mercury momentum and of course operating and per unit margins). That's why the brand was marginally the first to enjoy the introduction of Hybrid technology as seen in Mariner (gained from the Escape base), but unfortunately little more has been heard of regards the roll-out of Hybrid technology as a key enabler for the division ever since.
FMC is keen to point out that it is undeniably backing Mercury, but with unit sales at approximately 200,000 per annum, the concern is that at this North American sales level that the business case wears thin indeed. (Infact the last year sales figures for both Oldsmobile and Plymouth were higher than 200K just before discontinuation). And of course at a time when GM is pushing Chevrolet as an affordable global brand and trying to recreate interest in Cadillac beyond US shores Ford will have considered the same strategy with Mercury, but it well knows that it just doesn't have the same recognition or power as GM's 'All American' marques.
We hear the usual rhetoric from Dearborne that FMC is “right behind” Mercury, and some think that the buoying of the line-up to 5 cars from 2/3 not so long ago is a sign. But to play Devil's Advocate, each of the models is a Ford variant, nothing more, and a sign of true conviction is yet to be seen.
Rumours about that Mercury suppliers have indicated that they haven't been asked to quote for Mercury supply beyond 2012, the run out time of an extended life-cycle of today's cars.
Given the example of Lincoln, where the creation of powerful and emotive concept cars earlier this decade have yet to be fully realised – with only partial appropriation of styling elements – things do not presently look good for Mercury. Showcars like the 2003 Messenger Coupe and 2005 Meta One (an adapted Freestyle) demonstrate the mixed messages being sent out to the industry and public at large (Forgive the Messenger put but it was entirely intended!). There quite simply isn't any action behind the words that point to a renaissance of the marque.
And in truth, why should there be? To employ the hackneyed Boston Consulting Matrix description, Mercury is little more than the archetypical 'Fading Star' of its sector, and has been for some time.
Thus FMC has 3 options:
A - “Put to Bed”
B - “Divest”
C - “Re-Invent”
Option A looks the obvious choice, going the way of its 'peers', but we suspect that overhead costs of running the division are (or could be) in line with revenue, so keeping it going whilst assessing B & C routes should make sense; even if that means juggling this review with the all important F-series delayed launch, ensuring small and compact global car programmes are on schedule, and of course keeping Tracinda and Jerry York's intentions to rid divisional dead-weight (inc Volvo) at bay.
Option B would be the best long-term choice, why eradicate the marque if it can be sold-off to a highly liquid Asian player who in an attempt to gain competitive local advantage would pay good money for an established marque. From fiscal FX and regulatory perspectives, the weak US$ vs increasingly strong Chinese Rem nimbi plus the relaxation of foreign FDI rules and creation of PE and investment bank partnership agreements would assist the likelihood of such a transaction.
Fading Stars can be re-born in other locations, just as Buick has been in China via the SAIC partnership, though it should be stated this wasn't achieved overnight. Consumer ravenous China is keen on foreign brands and hyper-real, re-invented ' authenticity' , as witnessed by SAIC's use of Rover – Roewe, eulogizing the (highly re-worked) quintessential “Bwitish Car”. Thus, there may be potential for Mercury to be 'translocated' to Beijing, Shanghai and beyond. This would be done via both recent Ford import agreements to soak-up possible NA over-capacity (though there are design rules issues) and via Changan Ford's assembly base in Chongqing [Fiesta & Mondeo] and the FAW-Mazda plant [Mazda 6].
Option C could be achieved as and when Option B was secured. investment-auto-motives believes Mercury may be re-energised both at home as a specialist, consistent 200K volume, higher priced alternative midstream offering of dedicated 'personal' coupes that have been so favoured in the past. But using platforms from a lower-cost production region that permit the oncost of engineering upgrade and select technological features instead of 'all singing all dancing' feature-packs that erode margin and reliability. In short remove the befuddling complexity and cost and create succinct real Mercurys. That region is of course China enabling the re-creation of full-line, multi-model production of coupes to SUVs for the emergent 'middle-class' buyer base that is today keen to buy mid-size segment cars from brands that evoke history and authenticity.
Mercury does indeed have an illustrious past of icon vehicle that embraces the aspirant sporting mould with vehicles such as:
1949-51 Mercury Coupe (the pinnacle of latter-day 'Leadsled' Kustom Kulture)
1963 ½ Mercury Marauder Coupe
1968 Mercury Cougar XR-7G
1970 Mercury Cougar Boss 302 “Eliminator”
Thus there is a base for re-popularisation of the brand as the true sporting (if not very high performance) upscale coupes. Mercury Coupes were generally the best sellers of the range as affordable 'personal cars' and this could provide a new niche if re-invented to the stylistic heights of say the Messenger concept car and offer 'peppy' and more performance to take on Pontiac and others. Fading Stars can enjoy resurgences, just look at Harley Davidson & Triumph motor-cycles, but they need to be in-tune with the zeitgeist and play to their strengths.
FMC undoubtedly faces a real challenge, but if managed well, it's essential core attributes of 'change' and 'speed' have never been more prosaic. Fortunately for FMC, Mercury (otherwise known as Hermes – a true luxury brand) is also the god of Commerce, Luck and Magic!