Ford tries to stem Mustang sales slide

http://www.msnbc.msn.com/id/17472505/

DETROIT - The latest version of Ford's iconic Mustang is 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 percent in January and February
compared with the same months in 2006, company officials became a
little 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 percent last year. The company sold 160,975 Mustangs in 2005
and 166,530 in 2006, big numbers in the midsize sports coupe market, a
segment considered to be a niche.

"It did phenomenally well for a while, due in part to (it 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 year
full year when sales usually begin to decline for most models.

It could be too soon, however, to write of Ford's Mustang, Pipas said.

"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," he said.

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

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.

"We have other things up our sleeve that we can't talk about that
you'll see midyear," said Hall.



Cars with sportier body styles like the Mustang traditionally have
shorter life cycles than more conventional cars, said Tom Libby, J.D.
Power and 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.

There's also pressure on Ford to roll out a new model faster to
compete with Chevrolet and Dodge, something all automakers are under
pressure to do with intense competition in just about every market.

"They can't let it languish so it's in the doldrums when the Camaro
comes out," said Libby. "They have to keep it at the forefront."

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.

"There will be another Mustang before too long," he said. "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, give or take."