Tuesday, July 19, 2005
Is Ford keeping Mustang GTs rare to inflate prices?
Several readers have commented on the rarity of the new Mustang GT and the pricing of same. The situation is being compared to the Thunderbird Fiasco, that had dealers charging hefty premiums over the MSRP. I'm not here to defend Ford, but it should come as no surprise to Mustang Fans that this is happening. There are several reasons;
Mustangs have traditionally been sold in a 33% GT and 66% V-6 mix. Just look at prodcution numbers for the last few years (where available) and this will be clear. Many Mustangs over the years have been sold to rental fleets is part of the reason. Another factor is the CAFE or Corporate Average Fuel Economy ratings, in an effort to comply with these regulations, V-6 models have outnumbered V-8 models for years.
Now with a completely new model Ford should have anticipated a higher demand for the GT model this year, but they underestimated demand and had to increase production by about 40%. from 140,000 to about 190,000 units. Still with the 33/66 mix of GT and V-6.
This will be the best year for Mustang sales since 2000, when 215,000 units were sold. And in 2000 how many of those 215,000 were V-8 models (Cobra and GT) Just about 60,000 units or 33%.
I have no doubt that dealers are not negotiating prices on Mustangs. It's been a while since a Ford dealer has had a car that they didn't have to discount. Besides full size trucks, Ford has been slipping. Now with new models coming in that may change. But look at the current discount frenzy and then ask yourself, "If I were a dealer, wouldn't I charge a premium or full price for any car I could?" Of course you would.
This type of price policy may carry over into 2006, that's highly likely. But that's because the car is hot, we all want it. I'm sure when the new SVT Shelby GT500 comes out, dealers will be bending customers over the barrel for every one of them. I don't think it will continue past 2006 and Mustang prices will have to normalize and be flexible.
I don't think it's right, that loyal customers should be charged premiums, but I can understand the motivation. Hell, when you have to give away a computer to sell a Focus and Home Depot discounts to sell trucks, it only makes sense not to deal on a car that sells itself.
Mustang GT production for 2005 will be near 60,000 and V-6 will be closer to 130,000. Will you be one of those lucky 60,000? Don't expect numbers to change much next year either.