Saturday, December 23, 2006

Why the Merkur XR4Ti failed in America

From 1985 to 1989, Lincoln-Mercury dealers across the United States sold the Merkur XR4Ti. It was the hatchback version of the popular European Ford Sierra line. Despite rave reviews by automotive journalists (including one of Car & Driver's Top 10 cars of 1985) and enthusiasts, it was a commercial flop. Over the years, as I saw the lone XR4Ti on the road, I asked myself the same question, why was it unsuccessful here? I have finally had a chance to sit down, do some research, and figure out why.

1. Cost. Because the XR4Tis were assembled in West Germany, manufacturing costs relied on the dollar-mark exchange rate. The rate fluctuated wildly, and for the most part, against the U.S. dollar. On January 1, 1985, $3.15 bought a German mark. By January 1, 1990, it took $1.68 to buy the same mark. The decreasing value of the dollar made the XR4Ti just too expensive for the typical consumer, and Ford Motor Company.

2. Marketing. Ford messed up the marketing big time. In a period when turbocharged, import hatchbacks with great handling were all the rage-- 944 Turbo, RX-7 turbo, Starion turbo, et al.-- the XR4Ti was a perfect competitor. It had a 2.3 liter turbocharged engine which produced 175 horsepower, 200 pound-feet of torque, and did the 1/4 mile in 15.5 seconds. But alas, Ford decided to start a new brand, Merkur (German for "Mercury"). Americans could not pronounce it. And when Americans cannot pronounce something, they naturally tend to distrust it and run away from it.

3. Styling. Though a few, like myself, loved the car's styling, most did not. The most controversial cue was the "bi-plane" rear spoiler. Though it was eventually scrubbed and replaced with a normal spoiler, the car's fate in America was already doomed.

4. Passive restraint/airbag requirement. This was the straw that broke the camel's back. In the late 80s, the feds promulgated regulations requiring all new cars to come equipped with passive restraints (those oh-so-useful motorized shoulder belts) or airbags. Because of the R&D costs, Ford decided to just pull the car from the American market. And thus, the end of an underrated, cult favorite, pocket rocket.

1 comment:

Anonymous said...

Your exchange rate reason makes absolutely zero sense. It if cost X Marks to build, in 1985 it would cost 3.15X Dollars to buy. It 1990, according to your numbers, then it would have cost 1.68X Dollars, so cheaper.