Mustang adds some sizzle to Ford sales
More than 15,000 a month sold, it surpasses Chrysler 300
June 1, 2005
BY SARAH A. WEBSTER
FREE PRESS BUSINESS WRITER
Detroit has a new crown jewel.
After just one year on the market, the much-lauded Chrysler 300 -- winner of a long list of awards and the gotta-have-it hype of such celebrities as Snoop Dogg -- is being outsold by a hot new domestic car. And a two-door coupe to boot.
Yes, the new Ford Mustang, after six months on the market, is more popular than the flashy 300.
For the first four months of the year, Ford Motor Co. sold 61,820 Mustangs, while the 300 raked in sales of 49,089 during the same period. That's a healthy lead of more than 12,000 vehicles for the new retro-inspired Mustang, which is built in Flat Rock.
Of course, comparing the Mustang to the 300 may seem like comparing an apple to an orange, said Jesse Toprak, a senior analyst at the consumer Web site Edmunds.com. The Mustang is a sporty coupe, or convertible, that costs between $19,890 and $31,420, while the 300 is a practical large sedan that costs between $24,045 and $35,095.
But the Chrysler 300 has been widely regarded as Detroit's hottest car during the past year, and Ford's Mustang seems to have quietly snatched that honor away from its crosstown rival this year.
"This is the hottest domestic product on the market right now," Michael Devan, general manager of Maroone Ford, a large dealership in Ft. Lauderdale, Fla., said of the Mustang. His store has 48 customers on a waiting list for the GT version of the Mustang, and he's been trying to buy up Mustangs on eBay.com in order to meet his demand.
"The car is just plain hot," Devan said.
Steve Lyons, Ford's vice president for North American marketing, sales and service, said, "I don't think there's any question it's the hottest car in the industry."
Ford has a backlog of 14,000 retail orders, and about 30,000 dealer orders. So the Mustang is essentially sold out until the 2006 model year.
"We've just told the dealers, 'Stop -- we can't build anymore,' " Lyons said. "We're not going to add any significant capacity, and I do hope, at least for the foreseeable future, that we'll have a very sold-out plant."
Gary Dilts, senior vice president of sales for DaimlerChrysler AG's Chrysler Group, which makes Chrysler, Dodge and Jeep vehicles, said the Auburn Hills-based automaker is pleased with its 300 sales and is coming out with a variety of derivations to keep customers coming. An SRT-8 performance version of the 300C hit the market in April and some consumers are hoping for a convertible next year.
Dilts also noted that the Dodge Magnum and Charger are built off the same underlying architecture as the 300, keeping the Ontario plant that builds the vehicles extremely busy.
While Dilts noted that the 300 and Mustang sell in "totally different segments," he acknowledged that the "Mustang is doing a nice job ... and it's certainly got off to a good start."
Earlier this year, the designer of the 300 even gave kudos to the new Mustang, predicting it would sell well.
"I respect the Mustang," Ralph Gilles, the design director who oversees large Chrysler and Dodge passenger cars and minivans, said during an interview with the Free Press in February. "I give Ford a lot of credit for it. I think it's really well done. It's a beautiful car."
According to a consumer survey released by Edmunds.com in May, the Mustang won a landslide victory as the Most Significant Vehicle of the Year for 2005, and the Chrysler 300 sedan took second place. The two cars beat out all foreign competitors.
When it comes to hot product offerings from domestic automakers, Toprak said, "it's really the 300 and the Mustang."
The Mustang, though, seems to be getting a few more buyers than the 300 did after its launch.
Last month, consumers bought 19,559 Mustangs. The biggest month the 300 ever scored was in December, with 13,525 sales. The Mustang is averaging about 15,455 sales a month this year, versus 12,272 for the 300.
Toprak also noted that the Mustang is selling with a nominal $59 in estimated incentives six months after its launch. Edmunds.com estimates that the 300 had more than $1,100 in incentives six months after its kickoff, although Toprak noted that vehicles with higher sticker prices usually require bigger incentives.
Mike Jackson, chief executive officer of AutoNation Inc., the largest chain of auto dealerships in the country, in a recent interview called the Mustang "a complete success" and pointed to it as proof that Detroit automakers can make a strong comeback against foreign competitors.
Despite the success of the new Mustang, however, analysts expect Ford Motor Co. sales to be down 2 to 5% in May. Automakers are expected to report their results today. Wall Street experts who track the industry, meanwhile, expect sales to be down 5 to 7% at General Motors Corp. and up 3 to 6% at the Auburn Hills-based Chrysler Group.
Devan believes the Mustang's heritage and the retro styling of the new model have been crucial to its success."What that car doesn't have that the Mustang has is" a legacy, Devan said of the 300.
Having a pool of consumers chomping at the bit for a new Mustang might have given the product an edge over the 300.
Just ask 82-year-old John Kachigian of Northville, a retired Ford worker who bought his 12th Mustang last year, when the company released its new body style.
"The car does make you feel a lot younger," said Kachigian, who said he has been anxiously waiting for Ford to build a retro version of the Mustang that harkens back to the old Mustang with which he first fell in love.
"I want to go back in time," he said.
While the Mustang name seems to lend some edge to the sports car, the success is somewhat surprising given the fact the car is a two-door coupe. Sedans are usually seen as better sellers than coupes -- largely because they are more practical -- and some automakers have been moving away from that segment of the market.
But as competitors move out of the sporty car coupe segment, Mustang is taking an increasingly large piece of that coupe pie. Ford estimates the Mustang's share of the "sporty car" segment at 54.6% through April.
"This coupe has shown that a coupe can be successful," said Robert Parker, Ford division's car marketing manager. With shifts in the market, he also noted, "it's difficult to pinpoint a challenger."
Lyons ticked off a list of competitors, such as the Camaro and Firebird, which no longer exist in the segment.