Ford has announced the death of its Mercury brand, but will keep and develop Lincoln to challenge the likes of Cadillac and Lexus in North America. Production of Mercury vehicles will end in the fourth quarter of this year “to fully devote its financial, product development, production and marketing, sales and service resources toward further growing its core Ford brand while enhancing the Lincoln brand.”

“We have made tremendous progress on profitably growing the Ford brand during the past few years. Now, it is time to do the same for Lincoln,” said Mark Fields, Ford’s president of The Americas. Lincoln will make the news very often in the near future. The hybrid version of the MKZ will reach showrooms later this year and is expected to be the most fuel efficient premium sedan on the market. Also coming is the significantly refreshed 2011 MKX crossover, followed by another six all-new or significantly refreshed vehicles within four years.

Plans for the brand include a first-ever C-segment vehicle, new Lincoln-exclusive powertrains, including an all-new V6 engine, “advanced fuel-efficient transmissions” and EcoBoost engines for the whole range. Fuel economy leadership with each new vehicle is the ultimate goal.

Mercury was originally birthed in 1939 as a slightly more upmarket offering to Ford. However, the continued strength of the Ford brand – particularly during the past three years – has seen migration from Mercury to Ford for many customers. Today, Mercury’s customer profile, pricing and margins are almost identical to Ford, but Mercury sales have been declining. The majority of current Mercury sales are to fleet buyers and customers purchasing through employee, retiree and friends and family discounts, which largely can be satisfied by Ford’s range.

Of the Ford Group’s 16% market share in the US, Mercury accounts for only 0.8%, and movement has been flat or declining for the past several years. That contrasts with the blue oval badge, which has increased market share by 2.2% so far this year on the strength of new products such as the Fusion and Taurus.