DEARBORN, MI – Ford Motor Co. officially pulls the plug on the 71-year-old Mercury brand.

The auto maker says it will end Mercury production in the fourth-quarter to concentrate more resources on its Lincoln luxury marque.

“The company plans to expand and enhance the Lincoln lineup, so we decided to discontinue the Mercury brand,” Mark Fields, president-The Americas, tells reporters at a news conference here today.

Ford says it intends to expand the Lincoln lineup with seven all-new or significantly refreshed vehicles over the next four years, including its first-ever C-segment product. Ford officials are mum on the style of the C-segment vehicle, but vow it will be fully differentiated from any Blue Oval product.

Fields says the decision to axe Mercury was made today following a vote by the board of directors. When asked why the timing was right to discontinue the brand now, Fields says it’s largely due to the success of the core Blue Oval brand.

The Ford brand is “growing in strength,” he says, noting an increase of 2.2 points of market share.

“Mercury’s total market share is eight-tenths of 1%, and that’s declining,” Fields adds. “The gain on the Ford brand is more than twice Mercury’s share.”

Ford also says large numbers of Mercurys were purchased using discount plans. And as the Blue Oval made strides in quality and content, more and more traditional Mercury buyers were cross-shopping the Ford brand.

Some 53% of Mercury buyers cross-shopped Ford and Lincoln products, the auto maker says.

Fields says Ford is in the process of alerting its 1,712 Mercury dealerships, a process that should be complete within 36 hours.

Ford will work to link affected dealers with existing Blue Oval franchises. In cases where that process is not feasible, the auto maker will “compensate them fairly and reasonably,” he says.

The future of Mercury, founded by Edsel Ford, has been a hot-button topic for years, but Ford executives repeatedly have shown support for the 71-year-old premium brand that filled the gap between the Blue Oval and Lincoln.

Fields says that show of support was not an effort to deceive dealers or the public, but rather was genuine at the time.

“We were not lying to dealers,” he says. “We go through an annual review process, and based on that we decided on this. We were not misleading.”

Bob Tasca, chairman of the Ford, Lincoln, Mercury dealer council, supports Ford’s decision but says it’s likely to take a toll on dealers.

“For some dealers, if they sell Ford, Lincoln and Mercury, it will probably simplify their business,” he says. “But there’s an emotional side because it affects people. There will be some cases where it makes a lot of sense and dealers will prosper, but some will go out of business.”

Fields says no corporate level jobs will be lost due to the decision, as all personnel currently working on Mercury projects will be transferred to Lincoln.

Plants that build Mercury products also will be unaffected, says Derrick Kuzak, Ford’s product chief.

Kuzak declines to comment on upcoming additional Lincoln models but says an all-new Lincoln exclusive V-6 is in the works, as well as “fuel-efficient” transmissions.

In recent years, the Mercury division has been starved of product. The Mercury Sable, twin of the Ford Taurus, was scrapped when the all-new ’10 Taurus debuted, and the Mountaineer SUV is slated to be discontinued when the ’11 Ford Explorer arrives.

Also departing the lineup is the Grand Marquis large sedan. Production will end this year.

Mercury’s lineup soon will consist of just two models – the Milan midsized sedan and the Mariner cross/utility vehicle.

Accounting for upwards of 450,000 units in a given year during the 1980s and 1990s, Mercury sales have been falling like a rock over the past decade.

The brand posted its best year in 1984 with deliveries of 527,198 vehicles and a whopping 16.5% share of the auto maker’s 3.2 million sales, Ward’s data shows. But last year, Mercury accounted for 92,299 deliveries and a 6.2% share of 1.7 million Ford sales.

In order to sell of remaining Mercury stock once production is discontinued, Fields says Ford plans to offer incentives this summer.