Muscle Cars Make a Comeback

The American auto industry is trying to muscle its way out of the doldrums.

Three decades after the heyday of muscle cars -- raw, powerful vehicles such as the Ford Mustang and Pontiac GTO that helped define freedom-of-the-road independence for a generation -- some newly redesigned versions are emerging as strong sellers. Ford Motor Co. is selling about 18,000 Mustangs a month, as many as its factory can produce, and says demand is greater than expected.

In coming weeks it will face a new challenger, the Dodge Charger, from DaimlerChrysler AG's Chrysler Group, which is hitting showrooms this month and is a remake of a vehicle that last rolled off assembly lines more than 25 years ago. The Mustang and GTO have both been on the market since last year.

The stakes are high for Detroit's Big Three auto makers, which are having trouble finding new designs that connect with buyers. At Ford, the Mustang is one of its few big hits among several new passenger cars that were supposed the help the company regain market share.

Despite a few successes like the Mustang and the top-selling new Chrysler 300 sedan, Detroit's auto makers have mostly had trouble getting buyers interested in their new designs. Ford already has started reworking the look of its Ford Five Hundred, a rival to the Chrysler 300, less than a year after its launch in hopes of boosting sales. GM's Buick division has piled up a big inventory of LaCrosse sedans, an all-new model that was supposed to turn around the brand's dowdy image.

In the first five months of this year, Ford's market share has fallen one percentage point to 19.1%. GM's is down to 25.7% from 27.2%

Even with the Mustang's strong sales, Ford's market share has continued to slip, although profit from the car is one of the factors putting Ford in slightly better financial condition than General Motors Corp. In the first quarter GM had a loss of $1.1 billion.

To meet current demand, Ford considered investing in additional capacity to build more Mustangs than the current maximum output of 192,000 a year. Executives decided against it to avoid getting stuck with too much capacity should demand slack off after a year or two, says Stephen G. Lyons, Ford North America group vice president for market, sales and service.

Part of the Mustang's appeal to buyers is its aggressive, retro look. As part of the redesign for the 2005 model year, Ford reverted to styling that hews closely to the look of the Mustangs of the mid-1960s. The most noticeable change is the car's front end, which features a large grille slanted backward toward the engine, giving it sort of a "shark nose" profile.

Despite the redesign, don't expect the kind of refined interior found in a BMW or Audi. There is plenty of hard plastic, and the rear seat is small: During a recent test drive, a three-year-old complained about a lack of leg room. Entry-level Mustangs go for $19,890, but the most powerful GT version starts at $25,815.

The remake of the GTO, which also started appearing in showrooms with the 2005 model year, followed a different strategy. Instead of evoking the car's 1970s heyday, it adopted a more modern, rounded look, which hasn't been a hit with buyers.

As a result, GM is on track to sell only about 13,000 this year: this year, they are averaging only about 1,000 a month. Evan Sobran, a 43-year-old real-estate executive in Duxbury, Mass., who has test-driven the car, says it drives well but doesn't turn heads like the Mustang and Charger. "It's $34,000 and looks like a Saturn, or some rounded bar of soap," he says.

That is bad news for GM, which was hoping the GTO would help generate excitement for its other new passenger cars, particularly the Pontiac G6, a all-new replacement for Pontiac's aging Grand Am. The company was counting on a comeback in passenger cars to offset declines in sales of sport-utility vehicles, one of its biggest sources of profit.

Chrysler is launching the Charger while the company is on a roll, thanks to the success of the 300 sedan, which shares its underpinnings, as well as its powerful eight-cylinder engine, with the Charger. If the Charger turns into a hit along the lines of the 300, Chrysler could be on its way to its most profitable year in some time. A sedan with a big, bold front grille, the 300 is among the hottest cars right now. Chrysler sells about 12,000 a month.

The new Charger won't be an updated copy of the original, which is perhaps most widely known for its iconic role in "The Dukes of Hazzard" television show.

In a nod to the baby-boomer sensibilities of its current target market, the new Charger is a four-door -- the original had only two. The car does retain its scowling, angled headlights as well as other styling cues to remind consumers of its heritage.

Catering to consumers' concerns about fuel efficiency in an era of $2-a-gallon gas, the Charger also has a system that shuts off four of the engine's eight cylinders while cruising on the highway or sitting in traffic. In one day of heavy stop-and-go driving, the Charger managed 19 miles a gallon, which is roughly two or three miles a gallon better than the Mustang in similar driving. On the highway, the Charger got almost 24.

June 16, 2005
Source: By NEAL E. Boudette, Staff Reporter of The Wall Street Journal

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