Ford Shutting Down Mustang Plant For A Week After Huge Sales Drop

You can partially thank the Chevy Camaro for this momentary blip in the Mustang universe, but that doesn’t tell the true story here.

Ford announced that it will be shuttering its Flat Rock, Michigan plant for one week due in part to a massive decline in sales last quarter. The new mustang got off to a roaring start once it was released, but has since declined in the United States last month to the tune of 32%. In the auto industry, you’ll normally see a few percentage points dropped here or there, but 32% is legitimately worrisome.

The second-largest U.S. automaker idled the factory in Flat Rock, south of Detroit, to match production capacity with demand, Kelli Felker, a company spokeswoman, said in an e-mailed statement. The plant, which employs 3,702 workers and makes Mustangs and Lincoln Continentals, will resume production Oct. 17, Felker said. Under the automaker’s labor agreement, workers will be paid during the shutdown.

The idling may be a sign of the growing weakness of the U.S. auto market, which had been a leading driver of economic growth. Automakers’ monthly sales have been coming up short — though they beat expectations in September — and many analysts are now predicting the U.S. auto industry won’t match last year’s record of 17.5 million cars and light trucks.

I don’t actually think it’s the U.S. market showing the beginning of a downturn. I think there are 2 things at play here. First, muscle cars, specifically the Mustang, are coming with too many variants. Companies need to start realizing that they are not compact sedans and don’t need 10 different engine or trim levels. Muscle cars are luxury cars, so stop trying to make them seem upmarket. 3 engines is also too much. A V6 and a V8 is all that’s needed, not 4cylinder turbocharged powerplants.

Second, why upgrade from a Mustang from 2010 that’s running fine and has a similar amount of power? Sure there’s brand loyalty, but are there really that many Mustang owners that want or can upgrade? Is the new Mustang attracting a new buyer? The Chevy Camaro says no.

Camaro overtook Mustang last month for the first time since October 2014 on the strength of incentives that more than tripled last month to $3,409 per car, compared with an average discount of $2,602 on the Ford pony car, according to data from researcher J.D. Power obtained by Bloomberg.

“In terms of incentives, we’re always going to be disciplined, but we’ll be competitive as well,” Erich Merkle, Ford’s sales analyst, said in an interview.

Ford has sold 87,258 Mustangs in the U.S. this year, down 9.3 percent, while GM had Camaro sales of 54,535, off 11 percent, according to researcher Autodata Corp. Ford Chief Executive Officer Mark Fields has said the U.S. auto market has plateaued and that showroom sales are weakening.

Maybe it’s because the cars everyone is making are so reliable now that there’s no need to upgrade or that people just aren’t interested in trading in a Civic for a Mustang. Whatever the multitude of reasons are, it looks like muscle cars are in trouble for the near term until something gives.

(Source: Bloomberg)