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Amid the gloom, Mercury celebrates

Amid the gloom surrounding Ford Motor Co.'s huge losses last week, one group was celebrating: Mercury dealers.

Ending speculation that they planned to kill Mercury, Ford executives said Mercury will get a new small car by 2010. But specifics were sparse, Mercury's vehicle lineup will be cut, and the company will reduce the number of dealerships.

"Contrary to all of the news articles I've been reading for the past six months, Mercury's not dead," said Michael Adamson, chairman of the Lincoln Mercury National Dealer Council. "I think it's a great start."

The only new vehicle announced for Mercury is an unnamed small car that will go on sale in 2010. Officials won't say whether the new Mercury is Focus-sized or smaller.

Ford spokesman Mark Truby said the car will be a derivative of a Ford-brand vehicle, which continues Mercury's strategy.

The number of Mercury nameplates will be reduced, Lincoln Mercury spokesman Mark Schirmer said. Mercury won't be a small-car channel, but it will focus on good fuel economy, he said.

Count on the Milan, Mariner and new small car sticking around long-term, Schirmer said. He wouldn't comment on the future of the Sable, Mountaineer and Grand Marquis.

CEO Alan Mulally told Automotive News that he decided to keep the brand alive because "there's a good market for the Mercury customers."

Some Mercury dealers praised Ford's announcement that it would "broaden and accelerate dealer consolidation." Recently, much of that consolidation was achieved by combining stand-alone Ford and stand-alone Lincoln-Mercury dealers.

Lou King, general manager at Ourisman Ford-Lincoln-Mercury in Alexandria, Va., said switching to a dual dealership was a boon to her business. Ourisman sold only Ford for 14 years. In late 2006, it bought the inventory and customer database of a Lincoln-Mercury dealership that was closing.

After the deal, the service department grew 40 percent, she said.

Ford Motor ended 2007 with 4,056 domestic-brand dealerships in the United States. It trimmed 214 dealerships last year and 126 in 2006.

With sales plummeting in the wake of $4 per gallon gasoline, the financial pressure on dealers intensified through the spring and summer. The downturn has Ford marketing chief Jim Farley pushing for the consolidation to happen faster. 

You can reach Amy Wilson at awilson@crain.com

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