In a news conference today Ford has officially announced that the 71 year old Mercury brand will go out of production at the end of 2010. Billed as part of a realignment of the company’s brand strategy, the ailing mid-level brand Ford says has been overshadowed by many of the newer and more exciting models wearing the Blue Oval in recent years. Buyers have been slowly migrating from Mercury to Ford vehicles, making the brand less and less relevant in the marketplace.

Going forward and making up for the loss of the Mercury brand Ford will expand and enhance its Lincoln brand lineup with seven all-new or significantly refreshed vehicles in the next four years as part of an aggressive growth plan focused on standout product design, class-leading technology and new powertrains. The company says its strategy is squarely aimed at competing with Cadillac and Lexus.

“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. “The new Lincoln vehicles will transform luxury for North American premium customers through an unexpected blend of responsive driving enjoyment and warm, inviting comfort. We will also offer our customers a world-class retail experience through a vibrant retail network.”

Widening the scope of Lincoln, the brand will receive an upscale car based on the same platform as the 2012 Focus, a first in segment vehicle for the brand. The car was originally slated for Mercury, but will be enhanced with luxury and mechanical upgrades such as EcoBoost.

“Lincoln vehicles will reward drivers with smooth, effortless power complemented by agile handling and responsive steering,” said Derrick Kuzak, Ford’s group vice president, Global Product Development. “The cabin is a sanctuary with segment-leading quietness, genuine materials and intuitive, useful technology.”

Lincoln has started gaining traction with customers, as evidenced by market share gains during the past five years. Lincoln’s share of the retail U.S. luxury vehicle market has grown from 4.5 percent in 2005 to 6.3 percent through the first quarter of 2010.

As to winding down Mercury, Ford says its strong financial position will allow them to absorb short-term costs associated with the discontinuation of Mercury and to consolidate future product investments into Lincoln. This will involve the dissolution of some dealership franchises.

Ford also wants consumers to know they will work closely with Mercury dealers and customers during the transition, including providing existing Mercury owners with continued access to parts and service support at Ford and Lincoln dealers and by honoring current warranties, including Ford’s Extended Service Plans.

“We are 100 percent committed to supporting Mercury owners through Ford and Lincoln dealerships and working hard to keep them as valued customers in the future,” Fields said. “At the same time, we will work closely with our dealers to phase out Mercury franchises and continue to build a healthy, growing Lincoln with strong new products and a profitable dealer network that delivers a world-class customer experience.”

Mercury owners will receive additional details in the coming days explaining the transition and assuring them that Ford and its dealers will continue to provide all necessary parts and service support for Mercury products.