Mustang sales losing traction so far this year

The latest version of Ford’s iconic Mustang appears to be growing old, and back-to-back monthly sales declines to start 2007 have the struggling company a little worried.

The new Mustang, which made its debut in the fall of 2004, has been a bright spot for Ford at a time when bright spots have been few.

So when Mustang sales dropped by 19% in January and February compared with the same months in 2006, executives became concerned.

“It’s gotten our attention because when a high-volume product like that declines as much as that, we want to see what we might want to do,” said George Pipas, Ford Motor Co.’s top sales analyst.

A drop in Mustang sales should be a worry for Ford. Overall U.S. sales slipped 8% last year. The company sold 160,975 Mustangs in 2005 and 166,530 in 2006, big numbers in the mid-size sports coupe market, a segment considered to be a niche.

“It did phenomenally well for a while, due in part to [being] really the only car in the segment,” said David Lucas, vice president of Autodata Corp. “It was exciting. It appealed both to young people and the people who remember what the Mustang used to be.”

Pipas said even Ford was surprised at the car’s staying power when sales continued to grow last year, though it is during the second full year when sales usually begin to decline for most models.

“Two months is hardly a litmus test for the entire year, particularly when the two months aren’t big sales months for anything, let alone two-door sports coupes,” Pipas said.

Still, Ford is working to keep the Mustang fresh with new variations that keep the car exciting, as well as gearing up new promotions heading into the spring and summer, traditionally the Mustang’s best sales months, spokesman Alan Hall said.

The company just began shipping new versions of a Shelby GT Mustang, and sometime next year, it plans a dark-green “Bullitt” version reminiscent of the 1968 Fastback Mustang GT that Steve McQueen drove in the classic movie.

Cars with sportier body styles like the Mustang traditionally have shorter life cycles than more conventional cars, said Tom Libby, J.D. Power & Associates’ senior director of industry analysis. The Mustang, because of its name and status, has defied that at times, Libby said.

Still, Ford must do everything it can to protect the Mustang’s turf, he said.

“That model is a core model for them,” he said. “They can’t let this one fall off its perch.”

The company’s other remaining icon, the F-series pickup truck, also has seen its sales drop and is facing heavy competition from General Motors Corp. and Toyota Motor Corp.

Competition for the Mustang is only going to get worse when Dodge resurrects the Challenger muscle car in 2008 and Chevrolet comes out with the new Camaro early in 2009.

“When you’ve got the Mustang and the Camaro and the Challenger going head-to-head, the winner is the consumer because it’s going to put a lot of downward pressure on prices,” Libby said.

Ford won’t say when a new Mustang will hit showrooms, but Pipas said he wouldn’t be surprised to see it sooner than later.

“This is a product where you like to redesign the product and give these loyal buyers something to look at every four years or so,” he said.