On April 17, 1964 at the New York World's Fair, Ford introduced the Mustang. It was athletic, uncomplicated and inspired. The urbane sport was an immediate success, selling far more models in its first two years than Ford management had ever hoped.
Ford responded well to immediate challenges from Chevrolet’s Camaro and Plymouth’s Barracuda. The distinctive Mustang needed to keep pace with demands for style and performance while maintaining its strong brand. Ford’s gallop kept perfect pace, with true believers like Carroll Shelby driving the herd.
But somewhere around the ten-year mark, the Ford team lost its way. Oil prices skyrocketed, thanks to the manipulations of the OPEC countries. The demand for high-mileage commuters gave Japanese cars a firm foothold in the American market. So in 1974, Ford introduced the Mustang II. It was an 83 horsepower, four-cylinder shadow of the original with an optional vinyl roof.
In its first year, the Mustang II actually sold well. But in its second year, sales dropped 49%. F-o-r-t-y n-i-n-e percent. The automotive experts at Edmunds describe it like this: “Everyone hates the Mustang II. It was too small, underpowered, handled poorly, terribly put together, ill-proportioned, chintzy in its details and altogether subpar.”
From the perspective of 2013, this story does have a happy ending. Right about the time that Alan Mulally took the wheel as CEO, Ford introduced the 9th Generation Mustang. What a gorgeous car – and utterly loyal to its mid-sixties avant-garde original. Introducing this beast frustrates the greenies. If Ford had made this move in 1974, their heads would have exploded.
So how has this approach worked out? Ford reports, “Strong second quarter with total company pre-tax profit of $2.6 billion, or 45 cents per share, an increase of $726 million, or 15 cents per share, compared with a year ago; 16th consecutive quarter of profitability. Net income of $1.2 billion, or 30 cents per share, up $193 million, or 4 cents per share, compared with a year ago. et income of $1.2 billion, or 30 cents per share, up $193 million, or 4 cents per share, compared with a year ago.”