Report: Mercury dealers to sell new cars as used

Article by Christian A., on November 15, 2010

Mercury is expected to post strong sales numbers for November, as Ford announced that some dealers pushed to move out their inventory or took at least final incentive payment and report the vehicles as sold by Friday November 12. If they respected it, Ford announced that it will get them their cash settlement check before this year ends.

Hines Park Lincoln-Mercury dealer found in suburban Detroit didn’t sell all the remaining Mercury vehicles by the deadline, according to Ryan Colb, the store's operations manager. He only sold six cars last week and took the final payment on Friday, on the last two--both Mountaineer SUVs.

According to Colb, the cars will be put in the used-car lot, because the used-car market is strong now and customers are waiting for a bargain.

As you may know already, Ford announced that it will kill the Mercury brand by the end of this year. Last month, Ford gave Mercury dealers the opportunity to report any new Mercury vehicles they own as sold and use the final pay system.

The final pay refers to the amount that the automaker pays dealers when they sell a car. "If a dealer has 10 vehicles left on the lot, they can report all 10 sold and get paid out for those vehicles and then go ahead and sell them as used," said Ford spokesman Steve Kinkade.

Now dealers will have the other option: sell the vehicles as new until December 31, or retail incentives on remaining 2010 and 2011 model year vehicles.

Ford is thought to be no longer able to defend the cost of supporting Mercury as the brand continues to post declining volume. However, the plan to kill the Mercury didn’t come up overnight. Ford has been planning Mercury's departure for years. In fact, decades ago, Lincoln dealers were urged to include Mercury franchises so that they would have volume needed to survive. Just recently, Ford has started to consolidate these dealerships into Ford-Lincoln-Mercury stores. Interestingly, these dealers currently get their volume from Ford brand sales.

Ford Motor had 1,780 Mercury franchisees at the end of 2009, but there were only 292 stand-alone Lincoln-Mercury stores while there are no stand-alone Mercury stores. In 2009, Lincoln-Mercury dealers sold 175,146 vehicles; of which, only 92,299 were Mercury.

In addition, the Ford and Lincoln Mercury dealer councils were merged. According to some Mercury franchisees, Ford has stacked the Lincoln Mercury side of the council with dealers who also have Ford stores.

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