DETROIT -- Ford Motor Co. will discontinue its 71-year-old Mercury brand and end production of vehicles in the fourth quarter, Mark Fields, Ford's president of the Americas, said today.

Fields also announced plans to expand the Lincoln lineup with seven new or refreshed vehicles in the next four years.

Ford product development chief Derrick Kuzak said a new compact car will be developed for Lincoln. The car will be based on the same platform that the 2011 Ford Focus sits on, but it will be designed and engineered specifically for Lincoln, he said.

The final decision to kill Mercury was made this week and approved by Ford's board today, Fields said.

A total of 1,712 dealerships sell the Mercury brand in the United States, but there are no stand-alone Mercury stores. Among the Mercury stores, 511 also have Ford franchises and 276 are combined with Lincoln franchises and 925 are dualed with both Ford and Lincoln franchises.

Some of the 276 Lincoln-Mercury dealerships are in markets that cannot support a stand-alone Lincoln store, Fields said. He said Ford will work with those stores, helping them to either get a Ford franchise or consolidating their Lincoln franchise with a Ford store.

Mercury dealers will all receive packets tomorrow morning outlining Ford's transition plan for the brand and outlining monetary compensation for their store based on a formula Ford has developed, Fields said.

Sources previously confirmed that Ford executives planned to propose to the board in July that Mercury be wound down by slowly starving it of product and marketing funds.

Mercury sales fell 74 percent from 2000 through 2009 and dropped 11 percent in May. "Sales had sunk too low to keep Mercury around," said John Wolkonowicz, an auto analyst with IHS Global Insight in Lexington, Mass. "The volumes are now probably too small for it to be profitable."

Mercury joins the ranks of other departed Detroit brands, such as Oldsmobile, Pontiac, Saturn and Plymouth. Edsel Ford, son of founder Henry Ford, established Mercury during the Great Depression as a mid-priced alternative to mainstream Ford and upscale Lincoln.

Read more: http://www.autonews.com/apps/pbcs.dl...#ixzz0pjVtrCv1