The separation has happened already in a showpiece dealership in suburban Denver, and a Lincoln Mercury spokeswoman says it's going to happen more.
This marks the beginning of a dramatic change from the way things have been since 1945, when Lincoln Mercury Division was established.
Wolfgang Reitzle, chairman of Premier, would like fewer and bigger Premier stores housing Lincoln and other luxury brands. But that leaves Mercury's new dealership network a work in progress.
On Nov. 15, dealer Jack TerHar opened in Broomfield, Colo., Ford Motor's first Premier dealership built from the ground up. TerHar sells Lincolns under the same roof with sister Premier brands, Jaguar, Volvo and Aston Martin.
TerHar sells Mercury one-eighth of a mile away, alongside Mazda on the same campus. Also on the campus is a Ford dealership.
"I asked to test the breaking apart of Lincoln and Mercury,'' said TerHar, president of Sill-TerHar Motors Inc. of Broomfield, Colo. "It was my idea to do this. I feel this will raise the image of Lincoln. And Mercury and Mazda do not have a lot of product overlap.''
Mercury's physical uncoupling from Lincoln underscores its orphan status within Premier. Mercury reports to Reitzle, but it is not a true luxury brand.
Ford Motor is funding Lincoln's growth and product lineup. In the meantime, Mercury is selling the old-fashioned Grand Marquis sedan and Ford Division knock-offs such as the Sable and Mountaineer.
Separating brandsSeparating Lincoln and Mercury dealerships fosters the image of each brand, said Lincoln Mercury spokeswoman Nancy Carollo.
"In some cases Mercury will be in a separate building," she said. "In some cases Mercury will be in an adjacent showroom to Lincoln but with its own separate entrance. It will vary by the location and how our dealers want to set it up.''
Mercury will permit the brand to be sold with Mazda, as evidenced by TerHar's store. But there is no plan to promote a Mercury-Mazda pairing, Carollo said.
While TerHar's new store is a significant departure, Lincoln Mercury officials say such changes are voluntary by the dealers.
Mercury's changing distribution strategy reflects Ford Motor's ongoing quest to find Mercury's place within the company and the market. Through October, Mercury sales have declined to 270,058 units, down 15 percent compared with the year-ago period.
"We are going to build the brand,'' said Brian Kelley, who was named Lincoln Mercury president in October. "Mercury's cycle plan for the next five years is being developed. We have the funding but have to decide how to allocate it.''
Mercury must decide "who are its core drivers, what vehicles represent them and what are the brand's driving dynamics, style, appearance, interior and ergonomic qualities,'' he said. Ford is willing to experiment with new distribution strategies as it crafts Mercury's future.
Kelley's comments echo those of his recent predecessors, who have struggled unsuccessfully to define Mercury. Outgoing Lincoln Mercury president Mark Hutchins repeatedly has denied speculation that Mercury will get axed.
Banking on PremierTerHar did not have a hard sell at the factory to separate the two brands. The franchise agreement does not stipulate that Lincoln and Mercury be sold under a single roof, he said.
"I had a discussion with (then Lincoln Mercury president) Mark Hutchins and with Richard Beattie, who was running Mazda,'' TerHar said. "They said yes in less than two weeks.''
That's lightning speed in the auto industry and signals Premier's determination to lift Lincoln into the ranks of its luxury competition.
Ford Motor has big plans for Premier, banking on profitable revenue from its luxury brands to help regain its financial footing. Lincoln is benefiting. By mid-summer, Lincoln showrooms will offer a re-engineered 2003 Town Car, an updated 2003 Navigator and a new 2003 Aviator sport-utility based on the Ford Explorer.
"They are trying to set Lincoln off from Mercury and elevate Lincoln,'' TerHar said. "And the Lincoln products that are coming nonstop for the next two years deserve that.''
Distinctive storesIt is too early to evaluate the pairing of Mercury and Mazda, TerHar said. He has grouped the two brands for less than a month, following the opening of the Premier store.
For six months, he sold Lincoln, Mercury, Mazda and Volvo from one showroom during construction of the new dealership. Two years ago, TerHar held only a Ford Division franchise. The other makes have been acquired to create the campus.
Mercury and Mazda share an eight-car showroom at TerHar's store. But the remodeled dealership relies on separate showroom entrances.
Other dealers developing Premier stores often consult TerHar, and at least two are considering pairing Mercury and Mazda, he said.
Premier is giving Lincoln and Mercury dealerships distinct looks inside and out.
For example, Lincoln wants to be known eventually by its portal, a free-standing rectangular sandstone arch containing a black granite monolith bearing the Lincoln name and logo.
Mercury has its own free-standing monolith created in translucent green glass and charcoal gray metal, a design intended to signify a high-tech, stylish brand. As Mercury's new dealership look evolves, traditional red signs will be replaced.