Mercury’s End May Mean Faster Consolidation

Mercury’s shutdown means that Ford Motor Company will be putting more effort into developing and marketing the Lincoln luxury line, but it also could mean that dealer consolidation will happen faster than expected. Some Mercury dealerships will lose their franchises in the process.

Of the 1,712 Ford dealers with Mercury franchises, only 276 are stand-alone Lincoln-Mercury dealerships. Those dealers will be converted to Lincoln-only stores. The dealers that also sell the Ford brand are not as worried about the consolidation.

Larry Taylor in Vandalia, Ohio, purchased a Lincoln Mercury dealership a month ago. “There is no negative impact on me, because I am also a Ford dealer,” he says. Some stand-alone Lincoln-Mercury dealers are not as confident. Taylor said, “They are going to lose half their volume.”

Ford is making a huge push to build up the Lincoln brand, however. Ford’s VP of product development, Derrick Kuzak, said that seven new and revamped models will be made available over the next four year period. He said Lincoln will even offer a compact car, something it has never done previously.

Kuzak commented, “It will not be a badge-engineered version of another Ford.”

Chairman of the Lincoln Mercury dealer council, Bob Tasca, Jr., spoke about the difficulty facing many of the dealers. “You have to feel sorry for the stand-alone dealers, but I think that many of them will get through it and do well.” He admitted, however, “Some may not be able to survive it.”

Ford recently made its announcement concerning the shutdown of Mercury after much speculation and rumor regarding the closing. Mercury’s four brands make up less than one percent of Ford’s total market share.

President of the Americas for Ford, Mark Fields, said that compensation will be given to every Mercury dealership. The amount of money received will depend on the size of the store as well as a number of performance factors.

Varsity Lincoln Mercury owner in Novi, Michael Stanford, is confident his dealership will make it through the consolidation. He said that his store sold 2,500 Lincoln and Mercury vehicles, and is able to survive with sales of 1,250 vehicles per year. He also says that he expects the volume to increase as the new Lincoln models become available.

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