Once the import market heated up neither Mercury nor Pontiac really had a reason to exist. At the end of each brand neither had unique models, just rebadges of mainline products. Meanwhile Volkswagen, and then the Japanese imports, brought in truly different cars. I think that for a major manufacturer, two or three brands is optimum. The mainstream brand, a luxury brand, and optionally a truck brand. I still think GM is doing it wrong. Chevy either needs to get out of the truck business and let GMC handle it, or they need to ditch the GMC label. Dodge spun Ram off into its own brand. Ford runs their trucks under the house label. GM needs to poo or get off the pot.
When it comes to luxury brands, Ford can't decide what it wants to do with Lincoln. If they don't start marketing Lincoln is going to die the same death as Mercury. GM has a good grasp of how to manage Cadillac, they just need to reintroduce reliability. Dodge has one luxury vehicle, the Chrysler 300. The Pacifica is the only other Chrysler currently for sale, and it has no luxury panache. The 300 is truly a budget luxury car, but Chrysler really needs a halo car, and it can't be a smoking turd reliability-wise.
Meanwhile Acura and Lexus are still doing relatively well and Hyundai has spun off Genesis into a luxury brand. Nissan is seriously trying with Infiniti, but they keep shooting themselves in the foot.