PONY THAT WON’T DIE : Ford Mustang, the Ultimate ‘60s Car, Still Leads Its Class
“I bought you a brand new Mustang, ‘bout 1966 . . .
Mustang Sally, guess you better slow your Mustang down.” --”Mustang Sally,” by Bonny Rice, April Music, 1966
Only a handful of Baby Boomer cultural landmarks have hung on from the halcyon days of the 1960s. The Mustang is one of them.
Long after Jerry Rubin joined Wall Street and Haight-Ashbury was gentrified, V-8 Mustangs still get built, and still go fast.
The ultimate ‘60s car has become an ‘80s survivor.
Nearly 25 years after a young Ford executive named Lee A. Iacocca first got his picture on the cover of Time magazine for introducing a new kind of American performance car, the Mustang is still the runaway sales leader in its class.
Today, the Mustang is outselling the Chevrolet Camaro and Pontiac Firebird combined and is even outpacing far newer Japanese makes such as the Honda Prelude and the Nissan 300 ZX. Analysts expect Mustang sales in 1988 to reach their highest levels in a decade.
“The Mustang is truly amazing,” says Chris Cedergren, a sales analyst with J .D. Power & Associates, an automotive market research firm in Westlake Village. “I’ve got to think even Ford is amazed at its performance after all these years.”
Ford is plenty surprised; an unsentimental Ford management has threatened to pull the plug on the Mustang time and again through the 1980s.
In fact, the Mustang, which turns 25 years old next April, has survived and even flourished into the late 1980s almost despite Ford. Company officials who keep expecting the car to fade acknowledge that they have balked at investing much money in the product ever since the late 1970s.
So the Mustang, once Ford’s brightest star, has become Ford’s poorest orphan.
Its advertising budget is among the smallest for any Ford product. It hasn’t had a major redesign since 1979. The current Mustang is Ford’s oldest model in age of design and is derived from a basic car platform, code-named Fox, that has long since disappeared from the rest of Ford’s lineup.
The Mustang is produced in Ford’s oldest, least automated assembly plant, a multistory museum piece here in Dearborn that once built the Model A. Slightly embarrassed Ford officials, who like to steer visitors to newer plants instead, acknowledge that the plant’s layout hasn’t changed much since it started building Mustangs in 1964.
Meanwhile, Ford has refused to replace key equipment in the plant because of the long-expected shutdown of Mustang production, and so today the tooling is aging and worn.
“We let things go because we didn’t think the Mustang was going to be around,” Mustang plant manager Louis Callaway says. “If you are contemplating the end of production, you don’t bring in a lot of new automation.”
Ford has starved the Mustang for resources even though the aging design has met Ford’s annual profitability guidelines since 1983, says Ron Muccioli, Ford’s Mustang product planning manager.
Refuses to Die
Huge losses on the car between its redesign in 1979 and 1982, he says, still offset those later profits. As a result, early losses have made it impossible for the Mustang to meet Ford’s longer-term profit guidelines--and have made it harder for Ford to justify new investments.
But despite it all, the Mustang, with one of the most beloved names in the auto business, has refused to die.
So in July, with Mustangs selling at a 175,000 annual clip, and the Dearborn plant producing at capacity, Ford announced that it would finally spend $200 million to upgrade the factory, redesign the Mustang’s interior to add air bags, and continue Mustang production “through the early 1990s.” At least $80 million of that budget will go toward bringing the Dearborn plant into the 1980s.
“We’ll go through and make major repairs on presses, conveyors and fixtures that just were worn out,” Callaway says.
To be sure, there was a time not long ago when Ford had every reason to believe that the Mustang was on its last legs.
Like a lot of ‘60s stars, the Mustang had a rough ‘70s. Sales nearly disappeared after skyrocketing gas costs, federal emissions controls and disastrously dull Ford designs took all the fun and power out of the Mustang.
After setting a Big Three record for first-year sales by a new model in 1964, Mustang sales had peaked in 1966 at 549,400 units, when it still had virtually no competition. With the Mustang, Ford had invented the “pony car,” and it took time for General Motors and Chrysler to catch up.
But the competition did catch up. By the late 1960s, the Pontiac GTO and Firebird, the Chevy Camaro, Plymouth Barracuda and Dodge Charger were all crowding into the Mustang’s turf.
At the same time, Ford was trying to increase its profit on the Mustang by making it bigger and heavier, and by loading it up with equipment. By 1972, Mustang sales had slumped to 172,600.
Gas Crisis’ Influence
The gas crunch of 1973 then sent shock waves through the performance car market, and Ford quickly downsized the Mustang in 1974, transforming it into an eminently forgettable Pinto derivative.
“If you went back to 1964, we had a medium-size car, then we let it grow and grow and get heavy, and then we scaled way back in the ‘70s, and we let the gas crisis dictate too much,” acknowledges Mike McCabe, Ford’s marketing plans manager for the Mustang.
The 1979 redesign helped bring power back to the car, but it was launched just as the industry was about to enter its worst slump in 50 years. Sales bottomed out in 1983 at 117,000.
But as gas prices started coming down and Japanese car prices started going up in the mid-1980s, the Mustang began a gradual recovery.
Since it had spent little to update the Mustang, Ford was able to hold down its price, just as sticker shock started hitting buyers of imported performance cars. Then, when Ford started offering convertibles and V-8 packages on the least expensive LX version of the Mustang, sales took off. A freshening of Mustang’s exterior and interior in 1987, along with some fine-tuning to its V-8, boosted sales even more.
As a result, the Mustang became a rarity in the auto industry of the 1980s--an affordable performance car.
Today, while muscle car nuts, many of them 40-year-olds staving off mid-life crises, are paying more than $16,000 for fully souped Mustang GTs packing 225 horsepower, fuel-injected V-8 engines, others are buying the less expensive Mustang LX and getting the same V-8.
Pricing Has Helped
Meanwhile, an entirely different group of less affluent buyers, including many young single women, are buying four-cylinder LX models, which start at just $8,835, to gain the appearance of owning a sporty car.
Ford officials believe that pricing has been the key to the Mustang revival. “When you look at the Camaro and the Firebird, I think they are more attractive than the Mustang,” says Muccioli. “We’re outselling them because we are cheaper than they are and have just as much power.”
For the legion of Mustang collectors and club members--an important influence on Mustang sales--the new Mustang’s power, juiced up in 1987 to what they consider legitimate muscle car levels, is starting to wash out bad memories of Ford’s earlier threats to kill off their car.
“The new Mustang is A-OK with a lot of collectors,” says Teresa Vickery, a Georgia collector and member of the Mustang Club of America. “We’re getting a state-of-the-art performance package with good brakes and handling, to go along with go-fast cubic inches.”
Yet the Mustang’s future is still by no means certain. In a new study, automotive analyst William Pochiluk predicts that the Mustang plant will close in the early 1990s, despite the new investment by Ford.
Pochiluk and other analysts believe that the Probe, Ford’s new front-wheel-drive performance car, is bound to start eroding Mustang sales during the next few years. In addition, Ford’s new Australian-built Mercury Capri convertible, to be introduced next year, could also hurt, especially as the Mustang grows ever older.
While Ford engineers are working on at least two Mustang design programs for the early 1990s, staffers say the existing design will remain virtually unchanged for three or four more years, ensuring that the Mustang will look increasingly dated next to Ford’s newer products.
Company officials also make it clear that they still aren’t sure Mustang’s sales will ever be enough to justify a major redesign. Thus, they may still let the car die.
Says Muccioli: “To do an all-new car in a segment where you can only (sell) 150,000 to 200,000 units (per year)--you can’t justify it. It doesn’t pay back.”
