Ford's New Mustang Drags on the Street -- Update

Date : 11/18/2019 @ 9:49PM
Source : Dow Jones News
Stock : Ford Motor Company (F)
Quote : 9.02  0.09 (1.01%) @ 12:53AM
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Ford's New Mustang Drags on the Street -- Update

Ford Motor (NYSE:F)
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By Paul Vigna 

Mustang purists aren't very happy about their beloved pony car becoming an SUV, and an electric one at that. Investors don't seem all that impressed, either.

On Sunday in Los Angeles, Ford Motor Co. unveiled the Mustang Mach-E, an electric SUV that bears the name of and takes its styling cues from Ford's most famous car. It got a ton of attention in the automotive press and on social media, but the Street reviews so far have been, well, flat. Ford shares closed Monday unchanged at $8.95.

The new electric Mustang might have been aimed more at potential Tesla buyers than Ford investors, but the latter could use a jolt, too. Since peaking above $16 in 2015, Ford shares have been steadily dropping. They hit a 10-year low of $7.81 in December 2018 and have recovered only marginally this year.

The sagging stock reflects the fact that Ford has struggled to get ahead of auto trends.

"Ford has taken a lot of heat for being behind on EVs," Edmunds analyst Jessica Caldwell said, "but the Mach-E could be just the thing the company needs to quiet the naysayers." The new Mustang, she said, is an attempt to offer buyers a sleek, electric SUV that also has that name of a product they already know.

Still, it is a pretty big gamble for Ford. They are messing with auto royalty. The Mustang is one of the truly iconic American cars. But the Mustang -- the muscle car, that is -- isn't a huge seller.

Through the third quarter, the company had sold just 55,000 Mustangs in 2019, down 10% from the same time last year. By comparison, the company sold 194,000 Escape SUVs, 120,000 Explorer SUVs and 62,000 Expedition SUVs.

The future isn't muscle cars; it is SUVs. That, of course, is a model that Ford practically invented on its own with the Explorer. Ford is betting that annoying the Mustang fan base will be worth it -- if it means taking sales from Tesla.

Write to Paul Vigna at paul.vigna@wsj.com

 

(END) Dow Jones Newswires

November 18, 2019 16:34 ET (21:34 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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