Rumors of Mercury's death have migrated from the automotive buff publications to the mainstream media. I've read news stories which begin by reminiscing about the Jimmy Dean Merc in 'Rebel Without a Cause'. And Steve McGarrett's various black Mercuries. (I liked the '67 Monterey coupe used in the pilot episode best.)
I wonder if any car buyers in the prime 30-45 age bracket even know what a Jimmy Dean Mercury looks like? Or remember the late Jack Lord playing McGarrett in 'Hawaii Five-O'? (Or that David Caruso in 'CSI Miami' is channeling Lord's ghost?)
Mercury sales peaked/plateaued in the late 1970s. And began to seriously decline around the dawn of this century. Sales last year were about 168,000 units, down over 70% from peak. Mercury's sales have dropped more than 30 percent since April 2006 and show no sign of improving.
These days, the average Mercury buyer is 55, according to J.D. Power, well above the industry average of 47. Purchasers of the Grand Marquis model average 72 years of age.
Brand loyalty is flagging as well, with only 35% of Mercury owners opting to buy another one compared with the 45% industry average.
When introduced in 1939 as Ford's first foray into the mid-priced field, Mercury was priced about 50% higher than a Ford. The Lincoln Zephyr was priced 50% higher than Mercury. About 2.5 Fords were sold for every Merc. Mercury outsold Lincoln by roughly 3 to 1 in 1939. The Merc was priced in between Oldsmobile and Buick.
In the postwar era, FoMoCo prices began to converge. A 1950 Mercury cost about 30% more than a Ford. A Lincoln cost about 35% more than a Mercury. In 1950, there were about 4 Fords sold for every Mercury and 10 Mercuries sold for every Lincoln.
My dad once owned a '47 Merc (bought used) and said that Mercuries were just "gussied-up Fords." In those days, Buick was a doctor's car, Pontiac was a flashy salesman's ride, Oldsmobile was an engineer's vehicle of choice. Mercury was ... "well I wuz gonna get a Ford and had some money left over ..."
In the mid-Fifties, a decontented, entry-level Mercury Medalist model was introduced at a price which was only about 20% more than a comparable Ford Mainline stripper. By 1956, six Fords were being sold for every Mercury.
In 1958, FoMoCo's mid-price situation was further muddied by the introduction of two new products. The Edsel was priced about 10% below Mercury, cutting into Merc's low-end Medalist/Monterey segment. The new four-seater Ford Thunderbird was priced near the top of the Mercury range, undoubtedly stealing some of Merc's high-end Park Lane hardtop coupe sales. 1958 Mercury sales were about 45% lower than the sales figures for the '56 Big M. In 1958, about 38,000 T-Bird's were sold (jumping to 67,000 in 1959); less than 10,000 Park Lanes were produced.
The Mercury Cougar was a handsome car when first unveiled in 1967. It was priced 15-20% above its Mustang sibling and, while the super-popular 'Stang outsold it by 3 to 1, the Cougar was considered an initial success. And it added a halo to the Mercury brand.
Over time, the Cougar's popularity slipped as did Mercury's as the brand increasingly became a rebadged Ford with a tweaked grille and taillights. Mercury is a virtually unknown brand outside of North America; Ford stopped selling it in Canada a couple of years ago. By early 2007, the average Lincoln-Mercury dealer only sold six Mercs per month.
Today, the Mercury Milan is priced very close to its Ford Fusion sibling. The other sibling, the Lincoln MKZ, costs about 25% more than a comparably equipped Ford Fusion - a premium much like Mercury used to command fifty-some years ago.
Lincoln has, therefore, become the new Mercury. And taken away Merc's reason for existence. No wonder the brand is in its final throes. (That odd racket emanating from a Mercury is not caused by build-quality problems. It's a death rattle.)
Mercury is not alone as a marque with no raison d'être.
The pricing and product differences between Buick, Pontiac, Chevy and Saturn are largely insignificant to most consumers. GM offers four brands when one could easily handle the task.
The Plymouth brand died when Dodge moved downscale to become the new cheap Chrysler Corp. brand. Or a Jeep with a gunsight grille.
Many years ago, Chrysler was a luxury brand; it now straddles between being a Plymouth substitute and a slightly gussied-up Dodge. The now-neglected Chrysler PT Cruiser was initially designed to carry Plymouth badges.
Mercury's demise seems inevitable but other brands from Detroit automakers will surely follow it to the grave.

Obituary In Preparation: AutoBlog has noted: "According to Edmunds Inside Line and its source, the last Mercury to die will likely be the handsome and likable Milan sedan, which will receive a mid-cycle refresh that shall carry the model through to 2012. The Sable will likely expire in 2010 when the new Taurus rolls out without a Mercury counterpart. Ford rhetoric, however, still holds that Mercury and Lincoln are being repositioned, with Abe's brand taking over as the volume-seller of the pair." (added 6/17/08)