General Motors Company (GM): Ford Motor Company (F)’s 2015 Mustang Is Risky

I have a unique perspective on Ford Motor Company (NYSE:F)‘s upcoming 2015 model Mustang. As you can see from the personal photo below, I drive a mustang and I love it. On the other hand, I’m also a Ford investor and understand the need to make the next Mustang part of a global platform to expand sales. This design change will likely be the biggest challenge the Mustang has faced in its lifetime. It also faces another challenge – General Motors Company (NYSE:GM)‘ Camaro. The Camaro has topped the Mustang the last three years in U.S. unit sales and sports a flashy redesign. Let’s look at these two issues and see what Ford Motor Company (NYSE:F) has in mind for the secretive 2015 Mustang.

Photo credit: Author

Global or bust
The driver in me cringes when I imagine the style change that the Mustang would need to attract a much different European consumer. It just wouldn’t be the same bold, iconic muscle car, because that strategy doesn’t work outside of the U.S. market. It would likely take the muscle car and make it smaller and more modern — the opposite of the retro look it has now. Ford Motor Company (NYSE:F) also has to make sure its model isn’t too different so that it can take back the sales lead in the U.S. market from General Motors Company (NYSE:GM)’s Camaro. If it goes with a more European style in its design, it risks losing even more ground. As an investor I cringe at the thought of alienating the cult following that the Mustang has had for decades.

I cringe even more at the idea of alienating both markets by creating something too big and inefficient for Europe, and too Euro-inspired for the U.S. market. Martin Smith, chief of Ford Europe design, admitted that the challenge represents a fine line to walk. “That is a really interesting challenge,” Smith said at the Geneva auto show. “What will emerge from that whole process is one of the best sports cars in the world and one that is still affordable.”

The current retro look is appealing to the Baby Boomers and the Generation X crowd, but the millennials have taken to it less enthusiastically. I guess that makes me an oddity, but that’s the market information Ford Motor Company (NYSE:F) has collected and it has to act on it. If they ignore the millennial generation, they risk giving the Mustang a slow but sure death. The millennial generation will soon be the top-spending age group — the 2015 Mustang will have the difficult job of attracting all three generations with its design.