Could Ford and GM Revive These 2 Brands As Competition Heats Up?

By Daniel

Maybe those of us involved in the U.S. automotive industry should label 2015 as the year of the comeback. We've seen General Motors' revive the Chevrolet Colorado and GMC Canyon in the mid-size truck market and do very well. We've heard from Fiat Chrysler Automobiles that its Alfa Romeo brand would make a comeback in the U.S. market, and longtime Ford Motor Company Ranger and Bronco fans are abuzz with the possibility that those two vehicles will be available again sooner rather than later. Heck, even in a general sense, SUVs have made a comeback and have been selling at a such a rapid pace that we could confuse 2015 with 2005.

So, amid a 2015 that is full of comebacks -- and at a time when competition for market share is heating up among automakers -- is there room for a couple of dead brands to be revived? Here are two that are intriguing, at least at first glance: Mercury and Hummer.

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Could Mercury help Ford? When former Ford CEO Alan Mulally came on board, he made a plethora of changes at the Blue Oval, many of which helped save the company from the bailouts its crosstown competitors received. Some of those tough decisions revolved around shutting down Mercury, as well as selling off other valuable brands like Jaguar. Ultimately, Ford was left with its namesake brand and its struggling Lincoln luxury brand. But is now the time to try and bring back Mercury?

Ford's 2007 Mercury Mountaineer. Image source: Wikimedia Commons.

At first glance, it's not the worst idea in the world. On the positive side, it would offer a vehicle lineup that would generate better top-line price tags and bottom-line margins. That's because originally, Mercury was slated to sell at a sweet spot in between Ford's namesake brand and its premium Lincoln brand. It would essentially be Ford's answer to General Motors' Buick. The idea of Mercury is intriguing because like Buick, it could sell in the U.S. as well as overseas -- GM's Buick is currentlysetting brand records in China.

However intriguing, though, Mercury really doesn't have a place in 2015 or in the near term. That's because Ford's selling strategy has evolved from different brands occupying different price ranges, to different trims spanning those markets. Mercury vehicles were often produced on the same assembly lines as regular Ford vehicles, and rather than bringing the brand back, Ford has opted to develop premium trims such as the Titanium and Platinum. Those premium trims accomplish the same task of generating higher transaction prices and margins while offering consumers more luxurious features and technology options.

General Motors' Hummer brand is also intriguing. A Hummer revival makes sense because the off-road image is something GM lacks with current products under its umbrella of Chevy, Buick, Cadillac, and GMC SUV offerings. It would be a direct way for GM to take advantage of red-hot SUV sales that Jeep is reaping the benefits of.

Hummer H3. Image source: Wikimedia Commons.

It's also more of a possibility with Detroit automakers beginning to send more passenger car production down to Mexico plants and reserving production capacity in the U.S. for light trucks, which could mean an opportunity to bring the Hummer lineup back to life. However, while it's a brand with a potential comeback, it seems more likely that GM will design more SUV offerings under its GMC brand with a more rugged all-terrain design as well as additional Cadillac crossover SUVs that generate a higher price tag than the rest of its brands.

As industry analysts continue to wonder if sales are peaking in the critical U.S. automotive market, the competition among automakers to gain market share will continue to heat up. Because of that, it seems like reviving dead brands would be a quick way to gain interest, market share, and even incremental profits if the brand can take advantage of sizzling SUV sales. However, while automakers will continue to expand the vehicles they offer, it seems like the industry consolidation of its brands is here to stay. At least for the near term, and despite 2015 being a year of many comebacks, don't expect to see a reappearance of these two dead brands.

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Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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