The Mercury Cougar was an automobile sold under the Mercury brand of the Ford Motor Company's Lincoln-Mercury Division. The name was first used in 1967 and was carried by a diverse series of cars over the next three decades. As is common with Mercury vehicles, the Cougar shared basic platforms with Ford models. Originally this was the Mustang, but later versions of the Cougar were based on the Thunderbird, and the last was a version of the Contour. The Cougar was important to Mercury's image for many years, and advertising often identified its dealers as being "at the sign of the cat." Glamorous models leading big cats on leashes were a feature of Cougar and Mercury ads.

First generation (1967-1973) Cougar

The 1967 Cougar was based on that year's new second-generation Mustang, but with a 3 inch (76 mm) longer wheelbase and new sheet metal. A full-width divided grille with hidden headlamps and vertical bars defined the front fascia—it was sometimes called the electric shaver grille. At the rear, a similar treatment saw the license plate surrounded on both sides with vertically slatted grillework concealing sequential taillights, a styling touch taken from the Thunderbird. A deliberate effort was made to give the car a more "European" flavor than the Mustang, at least to American buyers' eyes. Aside from the base model and the luxurious XR-7, one trim packages were available for both models: the sporty GT. The XR-7 model brought a wood-grained steering wheel, a simulated wood-grained dashboard with a full set of black-faced competition instruments and toggle switches, an overhead console, a T-type center automatic transmission shifter, and leather or vinyl seats. The GT package, meanwhile, supplied a much larger engine, Ford's 390 in³ (6.4 L) FE-series big block to replace the small-block 289 in³ (4.7 L) standard powerplant. Along with this came an upgraded suspension to handle the extra weight of the big engine and give better handling, more powerful brakes, better tires and a low-restriction exhaust system. The Cougar was Motor Trend magazine's Car of the Year for 1967.

The Cougar continued to be a Mustang twin for seven years, and could be optioned as a genuine muscle car. Nevertheless, it gradually tended to shift away from performance and toward luxury, evolving into something new in the market—a plush pony car. The signs were becoming clear as early as 1970, when a special edition styled by fashion designer Pauline Trigere appeared, complete with a hound's-tooth pattern vinyl roof. A reskinning in 1971 saw the hidden headlights vanish for good, although hidden wipers were adopted. Between 1969 and 1973, Cougar convertibles were offered.

1967–1970 Cougar

The introduction of the Cougar finally gave Mercury its own pony car. Slotted between the Ford Mustang and the Ford Thunderbird, the Cougar would be the performance icon and eventually the icon for the Mercury name for several decades. The Cougar was available in two models (base and XR-7) and only came in one body style (a two door hardtop). Engine choices ranged from the 200 hp (168 kW) 289 in³ 2-barrel V8 to the 335 hp (250 kW) 390 in³ 4-barrel V8. A notable performance package called the GT was available on both the base and XR-7 Cougars. This included the 390 in³ V8 as well as a performance handling package and other performance goodies.

Not much changed for the Cougar in its second year. The addition of federally mandated side marker lights was the major change. But the biggest changes were under the hood and performance-wise for the XR-7 model. Three new engines were added to the option list this year—the 230 hp (172 kW) 302 in³, 4-barrel V8; the 335 hp (250 kW) 428 in³, 4-barrel V8; and the 390 hp (291 kW) 427 in³, 4-barrel V8. Mercury was serious about the Cougar being the performance icon for Mercury. The XR-7G, named for Mercury road racer Dan Gurney, came with all sorts of performance add-ons, including a hood scoop, Lucas fog lamps and hood pins. Engine selection was limited only to the 302, 390 and the 428 V8, a grand total of 619 XR-7G's were produced, and only 14 G's were produced with the 428 CJ. The mid-year 7.0 L GT-E package was available on both the standard and XR-7 Cougars and came with the 427 V8. The 428 Cobra Jet Ram Air was available in limited numbers on the GT-E towards the end of the model year. Conservatively rated at 335 hp (250 kW), the 428 Cobra Jet could produce much more (306 kW) from the factory.

The third year of production saw several new additions to the Cougar lineup. A convertible model was now available. Exterior-wise, the grille switched from vertical bars to horizontal bars, and a spoiler and a Ram Air induction hood scoop were added as options. A new performance package appeared and several disappeared. The XR-7G and the 7.0 L GT-E disappeared, but the 390 and 428 V8s remained. The 290 hp (216 kW) 351 Windsor V8 was added to the engine lineup. The Eliminator performance package appeared for the first time. A standard 351 in 4-barrel V8 under the hood, with the 390 4-barrel V8, the 428CJ and the Boss 302 available as an option. The Eliminator was the new top of the line performance model of the Cougar lineup. It also featured a blacked-out grille, special side stripes, front and rear spoilers, optional Ram Air induction system, and a more performance tuned suspension and handling package. It also came in a variety of vibrant colors like Grabber Blue and Grabber Yellow. Only 2 Cougars came with the Boss 429 V8, making them the rarest Cougars as well as Boss powered cars ever built.

The 1970 Cougar appearance wise was similar to the 1969 model, however there were numerous changes inside and out. It now sported a new front end which featured a pronounced center hood extension and electric shaver grill similar to the 1967 and 1968 Cougars. Federally mandated locking steering columns took place on the inside, and the aforementioned new nose and taillight bezels updated the look on the outside. The 300 hp 351 "Cleveland" V8 was now available for the first time though both the Cleveland and Windsor engines were available if you took the base model 2-barrel motor. The 390 Ford FE engine was now dropped from the lineup, and the Boss 302 and 428CJ engines soldiered along.

1971–1973 Cougar

For 1971, the Cougar was completely restyled. Starting to move upmarket as a near-personal luxury car, the Cougar looked bigger, but actually weighed less and had the same wheelbase as its predecessors. The front end now featured four exposed headlights; the disappearing headlights were gone for good. The center grill piece, or cat's nose, was now larger and more noticeable than ever. The rear featured a semi-fastback with a "flying buttress" sail-panel. However, the convertible returned as did the XR-7 as well as the GT package. The Eliminator package was gone forever, but the Ram Air option remained. The engine lineup was shuffled slightly for 1971 as well. Now only three engines were offered—the standard 240 hp (179 kW) 351 Windsor 2-barrel V8, the 285 hp (213 kW) 351 Cleveland 4-barrel V8 and the 370 hp (276 kW) 429 Super Cobra Jet 4-barrel V8. However, the end of the muscle car era, which was caused by high insurance rates and rising gas prices, would spell the end of these high power engines.

The climate had begun to change as the muscle car era ended. No longer able to use gross power numbers, the manufacturers had to use net power figures which dropped the once mighty figures down substantially. Engines were shuffled around a bit. They were now the standard 163 hp 351 Cleveland 2-barrel V8, 262 hp 351 Cleveland 4-barrel V8, 266 hp 351 4-barrel Cobra Jet V8. Other than that, the Cougar remained a carryover from 1971. Only minor trim details were changed in 1972. The big blocks were gone for 1972 and 1973. The days of the performance oriented muscle car were coming to an end.

Aside from minor grille and taillight changes, 1973 would be largely a carryover year for the Cougar, but it would mark the last year of the Mustang-based Cougar. In 1974, everything would change for the cat. Power figures continued to change as new federal/EPA regulations began their stranglehold on the V8 engines. The new figures continued to fluctuate but engine options remained unchanged from 1972. The standard engine continued to be the 168 hp 351 Cleveland 2-barrel V8. Optional was the 264 hp 351 Cobra Jet V8. The following years changed to the Thunderbird/Torino chassis.

Second generation (1974-1979) Cougar

For 1974, the Cougar was shifted onto a new platform and into a new market as a personal luxury car. It now shared a chassis with the larger Mercury Montego/Ford Torino intermediates and was twinned up with the new Ford Elite. The Cougar thus became practically the only car to be upsized during the downsizing decade of the 1970s. These years marked the end of the "luxurious Mustang", and the beginning of the Cougar's move towards becoming a "junior Thunderbird" and eventually a sibling of the Thunderbird.

The move was also a sign that Ford was getting serious about the intermediate personal luxury market, which Pontiac had created in 1969 with its radical smaller Grand Prix. Every GM division had an entry in this market by '74 and the market was too large to ignore. The new Cougar paid homage to its smaller predecessor with a three-piece grille up front, topped by a new hood ornament which featured a side profile of a cougar's head. This was a touch which would last until 1983. The car's Montego heritage was fairly evident from the back, however. In between, it had acquired the sine qua non of the personal luxury car in the 1970s: opera windows. This body ran unchanged for three years, and during this period all Cougars were XR-7s.

In 1977, radical marketing changes came to Ford's intermediate lineup, although under the skin, mechanical changes were few. The Montego name was discontinued, and all the intermediate Mercury vehicles became Cougars (Ford renamed its Torino line the LTD II). There were now Cougar sedans, complete with opera windows, a lower-line coupe, and even a station wagon, which lasted only one year. The top of the line XR-7 continued as a separate model, with unusual simulated louvers applied in front of its opera windows and a new rear style that was meant to evoke the larger Lincoln Mark coupe. This year, the Elite name vanished from the Ford lineup and the Thunderbird was downsized onto its chassis to become the XR-7's corporate twin. This association between the two cars would continue for two decades. In keeping with the general trend of the times, the old Torino chassis was discontinued in 1979 and all Ford and Mercury intermediates went over to the smaller, lighter Ford Fox platform the next year.

1974-76 Cougar

For 1974, the Cougar had evolved from its Mustang, ponycar origins. The wheelbase grew to 114 inches and was now shared by the Torino/Montego twins, being marketed as an intermediate-sized personal-luxury car to compete against GM's hot selling Chevrolet Monte Carlo and Pontiac Grand Prix. The Cougar was also restyled inside due to the switch to the larger intermediate body but maintained the front fascia look from 1973 with a new styling feature including a rectangular opera window in the rear c-pillars. The Cougar also began to share the look of the Thunderbird and Continental Mark IV as the years progressed. The base model and convertible were dropped this year, but the XR-7 moniker soldiered on as the only model in the Cougar lineup.

Engine offerings from 1974 to 1976 included a standard 351 in³ V8 and optional power plants included the very rare Q-code 351 Cobra Jet V8(1974), plus 400 and 460 in³ V8s. The manual transmission was dropped in favor of the automatic.

Interior offerings during these three years included a standard bench seat with cloth or vinyl upholstery, an optional Twin-Comfort Lounge 60/40 bench seat with center armrest and cloth, vinyl or optional leather trim; or all-vinyl bucket seats with center console.

In 1975 the Cougar XR-7 continued to add more luxury features as it moved upscale. But with more features, the Cougar was gaining in weight as well. Compared to the 1967 version, the 1975 version weighed a full 1,000 lb (450 kg) more. Despite the added weight the buying public wanted the Cougar and sales figures reflected that fact. However for the performance fans, a high-performance rear axle and Traction-Lok differential continued to be on the option sheet. The standard engine continued to be the 148 hp 351 Windsor 2-barrel V8 with the 158 hp 400 2-barrel V8 and 216 hp 460 4-barrel V8 optional.

This Cougar entered its last year largely unchanged from 1975. There was a new body for the Cougar in 1977, so nothing else major was done to the Cougar this year. Only some minor trim pieces served to differentiate this year from last. Engines continued unchanged as well. The high performance axle and Traction-Lok differential were dropped this year. Twin Comfort Lounge reclining seats, with or without velour cloth trim, were the only major change for the interior, but it also showed how much the performance aspect of the Cougar had disappeared.

1977–1979 Cougar

Customers to Lincoln-Mercury showrooms were surprised by the all-new Cougar this year. New sharper and straighter styling that mimicked the Ford Thunderbird and Lincoln Continental Mark V replaced the "fuselage look" of earlier Cougars. The Cougar now shared its body with the Thunderbird, which was downsized to the intermediate bodyshell this year from that of the Continental Mark IV and shared the Cougar's 114-inch wheelbase, putting the T-Bird squarely in the intermediate personal-luxury car market as opposed to its previous higher-priced segment of that market shared with the Buick Riviera and Oldsmobile Toronado. This move would join the Thunderbird and Cougar together and would last until their demise in 1997. The lineup was also expanded to include a sedan and station wagon. This was because the Mercury Montego had been discontinued and its models were absorbed into the Cougar lineup as a result. The base Cougar returned as well for all three models. But the XR-7 came only as a coupe. The Cougar Brougham was available as a coupe or sedan and the Cougar Villager was available as a station wagon only. The engine lineup changed for this year as well. The base engine was the 137 hp 302 2-barrel V8 on all coupes and sedans. The station wagons had the 161 hp 351 2-barrel V8 standard. The 149 hp 351 2-barrel V8 and 173 hp 400 2-barrel V8 were optional on all models.

But the station wagon would prove to be a one year wonder, perhaps not keeping with the Cougar's heritage, and was dropped for 1978. But the real reason was that the new Mercury Zephyr came in station wagon form and Mercury decided that it would take the place of the Cougar station wagon. The Brougham was discontinued as a model and became an option package on the base model. But the sedan would carry on. Since the Cougar XR-7 sales continued to skyrocket, Mercury wisely didn't change much his year. Two new decor packages became available this year- XR-7 Decour Option and Midnight/Chamois Decour Option. This latter package came with a half-vinyl roof, padded "Continental" type rear deck, and Midnight Blue ad Chamois interior with Tiffany carpeting. This was Mercury's take on the special designer decour options used in the Lincoln Continental Mark VI. Engines continued unchanged as well. The Cougar XR-7 would set an all time sales record this year.

1979 would be the last year of the big Cougars. Detroit's downsizing would now affect Mercury's biggest seller. But for this year, nothing major happened. A new electronic voltage regulator, and plastic battery tray would be the biggest mechanical changes for the Cougar. The standard engine continued to be the 302 V8.

The Cougar, and indeed the whole Mercury mid-size line found itself restyled for 1977. The new skin was just that though, and the old Montego running gear continued under the new body. These cars were basically identical to the '77-'79 Ford LTD II, so see that entry for comments. The XR-7 specialty coupe, hier to the previous Cougar's legacy of tacky add-ons, was based on the Ford Thunderbird, itself an outgrowth of the LTD II. These are great looking cars, and tend to be more reliable and less rusty than the previous version. They're still not ideal though. See the LTD II and '77-'79 Thunderbird for a full evaluation.

Third generation (1980-1988) Cougar

For 1980, the XR-7 was again the only Cougar. Now on the Fox chassis, shared by the Zephyr, the Cougar was still a copy of the Thunderbird. The 1980–88 Cougars were nicknamed the "Fox Cougars" because of the new chassis. Opera windows became optional, although the louvered style of the old opera windows were applied to the standard-window coupes. Wipers were no longer hidden, and for the first time, the Cougar had sedan frames around its windows. Inside, there was a turn to flashy electronics, considered ultramodern at the time, with digital instrumentation and trip computer functions available. A smaller 255 in³ (4.2 L) V8 was the base engine, but this engine was considered weak and did not last long. Like the downsized Thunderbird, this generation of the XR-7 was poorly received by the public. For 1981, the line broadened again, with a Cougar sedan, which was now a twin to the newly redesigned Ford Granada (itself now merely a modified Fairmont). Six cylinder engines appeared for the first time, and then in 1982, another Cougar station wagon appeared but, just like 1977, lasted for only one year. With all these changes in such a short period, the Cougar had quickly become one confused kitty.

1983 brought substantial change. Lower-line intermediate Mercury models were now under the downsized Mercury Marquis badge, leaving the Cougar once again as a coupe only. This was in contrast to General Motors, whose personal-luxury coupes (Cutlass, Regal, and Monte Carlo) were on the same chassis and had the same design as the mid-size sedans and wagons. The XR-7 badge went away for this year (temporarily). The car was completely rebodied, along with the Thunderbird, with the two becoming the first examples of the new flowing "aero-look" design, which would eventually spread throughout the Ford line and influence the entire industry. Wipers were hidden again, and the Cougar differed from the Thunderbird mainly in having a very sharply-raked, almost vertical rear window similar to that on GM coupes such as the Chevrolet Monte Carlo. Some critics considered that this, along with its AMC Gremlin-style rear quarter window, went oddly with the smooth organic curves of the rest of the car, but buyers nonetheless responded positively and this Cougar was a success.

Power options were very diverse in this generation, ranging from a turbocharged 2.3 L I4 to a 3.8 L V6 and the perennial 302 in³ (5.0 L) V8. Oddly, the revived XR-7 was now only available with the turbocharged four-cylinder engine and was trimmed more to suggest performance than its traditional luxury image. In 1984, the new Lincoln Mark VII adopted this body shell and for the first time, became a cousin of the Cougar. For 1987, a partial reskinning of the Cougar occurred, bringing flush headlamps and better aerodynamics. The turbocharged motor disappeared, and two models were sold, the LS with V6 or a V8, and the XR-7 with a standard V8 and luxury amenities as of old.

1980–1982 Cougar

An all-new Cougar greeted car buyers in 1980 as the Cougar moved to the smaller 108 inch wheelbase Fox platform. The car was now even more similar to its Ford Thunderbird relative. The sedan and base Cougar were dropped this year. The XR-7 was once again the only Cougar model. Many Cougar fans refer to the 1980 to 1982 models as the "lost years," as sales declined substantially. Engines were reduced to just two and for the first time, a six-cylinder engine was available. The standard engine was now a 119 hp 255 in³ V8 and the 134 hp 302 V8 was optional. A new four-speed automatic overdrive transmission became standard to replace the old SelectShift three-speed automatic.

In 1981 the return of the base Cougar along with a sedan greeted Cougar buyers; the sedan replaced the Mercury Monarch. The engine lineup grew as a 94 hp 200 in³ I6 became the standard engine in the XR-7 and an 88 hp 140 in³ I4 became the standard engine on the base Cougar. This marked the first time that a four-cylinder engine was available on the Cougar as well as a V8 no longer standard on the XR-7. These changes would foreshadow the changes made to the Cougar in the future. Appearance carried over as well, but two new trim lines were added to the Cougars—GS and LS. Both packages were similar in both models, but the base Cougar's LS package only came on the sedan. The GS package focused on appearance, while the LS package offered luxury touches such as power windows and other luxury trim touches.

The Cougar lineup continued to expand in 1982 as the station wagon returned for another appearance in the Cougar lineup. It was only available in GS or Villager trim lines. The Villager trim added the fake rosewood bodyside panels. Another engine was added, the all-new 112 hp 232 in³ V6, but the stalwart engine of the Cougar XR-7 line, the 302 V8, was dropped. The GS and LS trim lines continued to be optional on both Cougar models.

1983–1986 Cougar

An all-new Cougar greeted buyers in 1983; gone were the sedan and station wagon models. The Cougar sported a completely new aerodynamic body, but retained the same chassis. This restyle was shared with its sister car, the Thunderbird. The only major difference was the side window treatments; the Cougar used a more formal notchback along with upswept quarter windows. This made the Cougar look more aerodynamic as well as more exciting when compared to previous Cougars. The new look was such a hit that it outsold the Thunderbird for 1983. But due to the amount of money spent in restyling both models, the interiors were left unchanged from 1982. Also, the XR-7 model was dropped. The GS and LS models carried over from the previous year. Interestingly, no 1983 to 1986 Cougar wore any GS badging, but the Cougar LS did. The engine lineup changed as the only two engines offered were the 232 in³ (3.8 L) V6 and the 302 in³ (5.0 L) V8.

After its redesign in 1983, the Cougar remained mostly unchanged for 1984. The XR-7 returned and for the first time, its standard engine wasn't a V8 or V6, but a turbocharged four-cylinder engine. Similar to the Thunderbird Turbo Coupe, the XR-7 came only with the 145 hp 140 in³ turbocharged I4. The XR-7 also featured blacked-out window trim, wide body side mouldings and charcoal grey lower half with tri-band striping to separate it from the base Cougars. A performance suspension was also standard as well. A three-speed automatic or a five speed manual were offered on the XR-7.

Subtle exterior changes such as a new Mercedes-Benz-esque grille and new taillights were just a few of the many changes as a whole new interior greeted buyers for 1985. This new interior featured a digital instrument cluster which lent a futuristic touch to the Cougar; but it was only available on base Cougars.

1986 was the carryover year for the Cougar. The Cougar was supposed to be redesigned this year, but with sales continuing to be strong, Ford decided to push it ahead to 1987. The biggest changes this year were under the hood as the 302 V8 received new sequential electronic fuel injection (SEFI) which boosted power to 150 hp; a 30 hp improvement versus the previous year. However, the Cougar didn't receive the High Output option from the Mustang which boosted hp to 225 hp. The Cougar XR-7 continued to offer only the turbocharged I4, but it got a power increase to 155 hp.

1987–1988 Cougar

The Cougar received a complete restyle for its 20th anniversary. Much smoother than the previous Cougar, it featured flush-mounted headlights and grille. The side quarter glass retained its upswept design, but it was stretched more to the rear of the car. The interior remained unchanged for the most part. The GS was dropped, leaving the LS and XR-7 models. The XR-7 changed by dropping the turbocharged I4, which Mercury felt was not keeping with the Cougar's heritage. Instead, the 302 V8 became the standard engine. The manual transmission was also dropped this year. The digital instrument cluster, previously optional on the GS/LS models, became standard on the XR-7 as well. The special lower tri-stripes and blacked out window trim continued to set apart the XR-7 from the LS. Mercury also took note of the Cougar's 20th anniversary by creating a limited edition Cougar to celebrate.

20th Anniversary Cougar

1987 was the Cougar's twentieth anniversary and a limited edition Cougar was produced to celebrate. The car went on sale in February 1987. The Cougar LS was the starting point for this special model. All of these special Cougars featured these standard items to set them apart from the regular production Cougars:

• Cabernet Red exterior w/Midnight Smoke moldings
• All exterior badging (front bumper, grill trim, trunk lid nomenclature and moulding trim) was finished in 24 karat gold. C-pillar emblems were finished in a gold cloisonné.
• Non-functional luggage rack
• Mustang GT wheels painted gold with a Cougar center cap
• Special "20th Anniversary Edition" dash emblem
Light Sand Beige interior with unique part leather, part suede Ultrasuede seats with heating and three-user memory profile. The seats also featured a special Cabernet Red piping.
• Special embroidered 20th Anniversary floor mats
• Traveler's convenience kit
• A hardcover book - "Mercury Cougar 1967–1987" which detailed the history of the Cougar
• 150 hp SEFI 302 V8
• Sport handling suspension package (XR-7)

The only options available were power moonroof, power antenna, illuminated entry, keyless entry, automatic climate control, engine block heater and the Traction-Lok axle with 3.08 gear ratio.

With the new MN-12 chassis and new body style coming up in 1989, the 1988 Cougar barely changed from the previous year. Outside, the biggest change was that the XR-7 now came in a new monochromatic color scheme. Only available in three colors (black, red, and white) with body colored or optional argent color wheels set this Cougar apart from its brethren. The base 232 in³ (3.8 L) V6 had multi-port fuel injection and an internal balance shaft that increased power to 140 hp. The 302 V8 received a dual exhaust system which added 5 hp. The analog gauge cluster returned as standard on the XR-7, but the digital cluster remained as an option on both the LS and XR-7.

Fourth generation (1989-1997) Cougar

The car was completely rebodied again for 1989. The biggest change was the switch to the larger MN-12 chassis which was shared by the Thunderbird. The chassis featured a fully independent rear suspension, a first for the Cougar. The flowing lines and extreme notchback roofline were still there, but this generation integrated the two much more successfully. To the surprise of fans, the car had no V8 engine available when introduced. Instead, the base LS had a naturally aspirated 140 hp (104 kW) 3.8 L V6, which had a hard time moving the nearly 3,800 lb (1700 kg) Cougar. The XR7 had a supercharged version of the same engine. Traditional Cougar touches such as digital instruments continued to be available.

The supercharged engine did not find favor with buyers, and the 200 hp (149 kW) 5.0 L V8 came back to replace it in 1991. In 1993, the LS disappeared and the XR7 was once again the only model. For 1994, the Cougar received a minor face lift, finally adding a cup holder in 1997.

Ford's new OHC 205 hp (153 kW) 4.6 L V8 replaced the old OHV 302 as the optional engine. Anniversary editions were issued for the model's 25th year (1992) and 30th year (1997). Nevertheless, the market for coupes was declining across the board, and in 1997, Ford ended its trio of personal luxury cars: the Mark VIII, the Cougar, and the Thunderbird. Some consider these to be the last American muscle cars.

1989–1990 Cougar

The Cougar entered its seventh generation with a completely new body and chassis. Nothing carried over from the previous Cougar except for badging and an engine. In fact, only six parts were carried over from 1988. The MN-12 chassis was designed to give Ford a new world-class rear wheel drive chassis to base the Thunderbird and Cougar. The main feature was the fully independent rear suspension. This new chassis was also nine inches longer (104.2" vs. 113") for better rear leg room. To go with this new chassis an all new body was developed for the Cougar. The formal roof line was kept but the side windows were shaped like a squared off "C" which lent more to the formal look. The Cougar also kept its waterfall grill and more squared off taillights. The LS and XR7 models continued as well, but for the first time in Cougar history, a V8 was not available. The main reason was that engineers had a hard time fitting the 5.0 L V8 under the hood and would have to wait several years before being able to rectify the problem. Instead, a new 215 hp 232 in³ (3.8 L) supercharged V6 was the only engine in the XR7; the same engine in the Thunderbird Super Coupe. The LS had to make do with the 140 hp 232 in³ (3.8 L) V6. The manual transmission also returned for the XR7 only. Mercury spared no expense in making the XR7 the performance model; giving it anti-lock brakes, an adjustable sport-tuned suspension, monochromatic paint scheme in red, white, and black, and 16" wheels. The LS being more luxury oriented featured a fully digital instrument cluster and chrome trim on the outside.

Fifth generation (1999-2002) Cougar

The decline of personal luxury cars downsized the Cougar to return as a sports car after 25 years as a personal luxury car. Of the three names that had constituted Ford's personal luxury lineup, Mark, Thunderbird, and Cougar, the Cougar returned first. This time, it is based on the Ford CDW-27 platform, the same platform that serves as the basis for the Ford Mondeo (Ford Contour & Mercury Mystique in the United States and Canada). This Cougar became Mercury's first sport compact since the 1983 Mercury LN7.

This generation of Cougar had a far more contemporary package, with modern DOHC 4-valve engines, a fully independent multilink suspension, and front-wheel drive. This was also the first hatchback Cougar, and the first to have its own body, unshared by any Ford. The body design used a philosophy Ford dubbed "New Edge" design: a combination of organic upper body lines with sharp, concave creases in the lower areas. The Cougar's body, and the New Edge idea in general, was introduced as a concept called the Mercury MC2 in 1997.

The 1999–2002 Cougars were available with two engine options, the 2.0 L Zetec 4-cylinder engine with 130 horsepower, and the 2.5 L Duratec V6 with 170 horsepower. Also, two transaxle options were available: the manual Ford MTX-75 transmission or the automatic Ford CD4E transmission (available in the U.S. with either engine, although the I4/Automatic combo was extremely rare; supposedly only 500 Cougars were built with the I4/Auto combination).

"Sport Package" models with the V6 featured 4-wheel vented disc brakes (from the Contour SVT), 16" alloy wheels, and a higher speed governor installed. Contrary to popular belief, the speed governor was not removed, but simply raised as a result of high speed rated tires with the 16" wheels. The top speed of the manual transmission car was 153mph in top gear at redline. While this was considered attainable given enough road, the automatic transmission version could not reach this speed without significant engine modification. With the sport package, the speed governor was raised to just higher than 153mph so, essentially, it was never seen. Without the sport package, the speed governor was set at 115 mph.

Ford also prepared two high performance concept-only versions dubbed the "Eliminator", which was a supercharged version built with aftermarket available parts, and the "Cougar S", which featured new body work, all-wheel drive and a 3.0 L Duratec engine.

Interestingly, Ford also sold this generation of Cougar in Europe and Australia as the Ford Cougar, but was not a sales success—surprising given that the Mondeo sold well in many countries outside North America.

This generation never sold well. In North America, the Cougar was sold at Mercury dealerships along side of several cars marketed to a generally older buyer. Salesmen unfamiliar in selling a car aimed at a younger and or female buyer had trouble selling this new cougar. Many feel that had this car been called a Ford Probe and marketed as such at a Ford dealer, it would have sold better.

Admittedly, demand for all coupes continued to dwindle, but the sedan versions also languished in North America, suggesting that the Mondeo platform was simply not well suited there—though there is a theory that Ford did not market the Contour and its Mercury Mystique twin properly while the market for the similarly sized BMW 3 Series grew. A high-performance Cougar S (not to be confused with the concept) was discussed in the press, which was essentially a Cougar with a Contour SVT engine; however, this version never made it into production.

In order to help create excitement for the Cougar, Mercury created several paint and trim packages called:

• Special Edition (2000 model year) available in Zinc Yellow, leather interior with yellow stitiching on the seats
• C2 (2001-2002 model years) available in either French Blue, Silver Frost, or Vibrant White, along with special blue interior accents
• Zn (2001 model year) available with special Zinc Yellow, special Visteon hood scoop and spoiler
• XR (2002 model year) available in either Black or XR Racing Red, with special black and red seats and interior trim. Also came with 17" silver wheels with black accents on the inner spokes.
• 35th Anniversary (2002 model year) Available in Laser Red, Satin Silver, and Black. Most came with leather interiors with silver center sections on the seats. They also came with 17" machined wheels, the same as the XR's without the black paint on the center spokes
• For the 2001 model year, the Cougar was "updated" with new headlights, front and rear facsias, and updated interior trim. Ford's restructuring plan in 2002 decided to cancel the Cougar (along with the Ford Escort, Lincoln Continental and Mercury Villager).