Ford to end Mercury brand this year, expand Lincoln

Ford Motor Co., after selling its European brands, said it will discontinue its 71-year-old Mercury brand by the end of the year and expand its Lincoln lineup with a new small car.

Ford's board voted today to cease production of all four of Mercury's models in the fourth quarter, Mark Fields, the automaker's president of the Americas, told reporters. Ford will send letters to 1,712 Mercury dealers this week offering them buyouts and giving some the chance to merge the Lincoln half of their franchise with Ford showrooms, he said.

"Given our improving financial situation, it really allows us to absorb the short-term cost of discontinuing Mercury," Field said, declining to reveal the expected expense. "We're very proud of Mercury's history, but we're now looking forward."

Chief Executive Officer Alan Mulally has emphasized the company's namesake brand as he revived the only major U.S. automaker to avoid bankruptcy. Mercury sales fell 74 percent from 2000 through 2009, and Ford said today they dropped 11 percent in May. The Dearborn, Michigan-based automaker will put more resources into the Ford and Lincoln lineups, Fields said.

"Sales had sunk too low to keep Mercury around," said John Wolkonowicz, an auto analyst with IHS Global Insight in Lexington, Massachusetts. "The volumes are now probably too small for it to be profitable."

Departed Brands

Mercury will join Pontiac, Saturn, Oldsmobile and Plymouth among the departed Detroit brands of the 21st century. Edsel Ford, son of founder Henry Ford, established Mercury during the Great Depression as a mid-priced alternative to mainstream Ford and upscale Lincoln.