With no new models in the pipeline after the 2011 model year, it was feared that Ford could axe Mercury in order to focus on improving its more upmarket Lincoln label. However, Ford execs, including CEO Alan Mullaly, have consistently stated that Mercury was safe and in July revealed that a new small car would be added to the lineup.

Other than that no other details about Mercury’s future model have been revealed. However, Automotive News reports that Ford's European division has been assigned the task of developing and engineering the car despite a lack of plans to sell any Mercury vehicles in Europe. During a recent interview, Ford’s European boss John Fleming said his division was chosen to develop the car because it specializes in lower-medium sized vehicles.

While details about the new car are scarce, there has been some speculation that it could be a reworked Ford Focus. Construction of the new Ford Focus will begin in North America by late 2010 and the Mercury version could potentially be sourced from the same factory. Introducing a new lower-medium car is in line with Ford's plan to associate the Mercury brand with smaller cars and crossovers sourced from Europe. Other models rumored to be heading Stateside include the next-generation Ford Kuga and Mondeo sedan.

Mercury’s immediate plans, meanwhile, include a facelifted Milan due for launch next year, a new hybrid version, and a minor update for the Mariner in early 2010.