Ford to Expand Lincoln Line-up – Analyst Blog

Ford Motor Co. (F) has decided to expand its luxury Lincoln line-up at the cost of its Mercury line-up, which will be phased out by the end of this year. The company plans to launch as many as 7 new Lincoln vehicles in the next 4 years, including a small car.

 

In late 2010, Ford will introduce the restructured 2011 MKX crossover, followed by another six significantly refreshed vehicles. The company will include the V-6 engine, advanced fuel-efficient transmissions and EcoBoost engines in all its new Lincoln line-ups. 

 

On the other hand, Ford will suspend production of its Mercury branded vehicles in the fourth quarter of this year. The company will divert the resources from Mercury towards its core Ford brand besides enhancing the Lincoln brand.

 

Last week, Ford announced to discontinue its 71-year old Mercury line due to its slackening sales over the last few years. The company’s CEO, Alan Mulally, had expressed his dissatisfaction about the sales performance of the brand soon after he joined in 2006. However, he had failed to phase out the brand at that time due to a strong opposition from the Ford family. However, the Ford family has recently agreed to the phasing out of Mercury in order to focus on its namesake brand.

 

The Mercury brand had been founded by Edsel Ford – son of Henry Ford – in 1939 to market entry-level luxury cars. It is similar to General Motor’s (MTLQQ) Buick and Chrysler’s namesake brand. In 1958, the brand was merged with Ford’s Lincoln division and has since been manufactured under the Lincoln–Mercury division.

 

Mercury saw its heydays in 1978, resurfacing again in 1993. However, the brand’s popularity has languished since then, with sales falling by more than half annually. In 1999, the brand was dropped in Canada with only the Grand Marquis model selling in the region. Last year, the brand’s sales dwindled to almost a quarter of its sales in 2000 at 92,299 vehicles.

 

The present Lincoln line-up may not look promising either. However, with significant restructuring and a sufficient amount of resources devoted to the brand, Lincoln may turn into a revenue-generating brand.