The auto industry is like most any other. It was started by a very few leaders, and then once the marketplace was defined (e.g. it was clear there was money to be made) then the industry got saturated with many, many manufacturers and brands. Someone told me once there were HUNDREDS of car companies in the 30s and 40s...take a look at the link of defunct manufacturers below.
Once a market matures, much of the competition gets pared down. It becomes survival of the fittest. There are mergers, there are bankruptcies. The late 30s, 40s, 50s and 60s saw a lot of manufacturers and brands go...many more than we have lost in the 70s, 80s, 90s, and 00s. The 50s, and 60s were probably the best decades for the American manufacturers that made it to the top.
The 70s and 80s saw huge rises in imports. Essentially the imports were a game changer. They created a second wave of market and industry maturation. Many would say Detroit didn't see it coming...but it should have. For every Honda and Toyota half-way around the world, Ford, GM and Chrysler had already beaten down 10x as many domestic competitors for the past few decades.
The major difference was that the importers, especially the Japanese importers, were selling something different. They were selling cheap cars, that sipped gas, and that ran like a clock...for miles and miles. Yeah, I know, there are those that are here that will say that the Japanese imports suck, that their brother or cousin had a Corolla that sucked, etc...and that may be true, but that individual reality does not (did not) hold up against the mass perception of the time.
With all the new imports that came since the 70s (Japanese and European) the marketplace "reset". Competition grew, big time, and with it the American consumers started questioning brand loyalty. It is one thing to be loyal to a brand when there are only two other choices, and arguably one probably does suck (Chrysler always sucks...just kidding). However, it is quite another thing to be loyal to a brand when competition is great and arguably value (a function of quality, cost, reliability, and versatility) is a toss-up. At that same time (70s and 80s) it became chic to own an import...it became a status symbol. That's just good branding...good marketing.
People drive what they want to drive, and their wants are based on many, many complex factors: marketing, price, looks, status, cool factor, uniqueness, what the vehicle says about them, etc...
So long Mercury. Unfortunately, the U.S. no longer needs and the business model cannot support a brand that is, for the most part, just a re-badge of another. There was a time in the automative industry when that was enough...that time is gone. There was a time when brand loyalty meant something. Not so much anymore.
TJR