History of the Mustang II

History of the Mustang II

Last Updated August 8, 2023 | Andrew Boyle

The Mustang II was produced from 1974-1978. The short, yet impactful second-generation Mustang always sparks plenty of passionate debates and varying emotions amongst the muscle car community.

The Mustang II’s popularity, or lack thereof, has been a subject of debate since Ford ushered in the Fox Body era for the 1979 model year. Sandwiched between the first and longest Generations, the Ford Mustang II represented a transitional period for one of the best-selling cars in the United States and a crossroads for one of the largest American automotive manufacturers in the world.

Before you make up your mind and determine whether or not the Ford Mustang II was a success or a failure, let’s take a closer look at how the Second Generation came to be and its lasting legacy.

Due to a series of conflicts, both foreign and domestic, Ford was forced to change course as the renowned, yet aging first-generation Mustang drew to a close. In order to adjust to the times and the current political landscape, Ford completely redesigned its famed pet project, and the Mustang II was born.

Picture of Blue Mustang II

Oil Crisis and Political Climate

The introduction of the Ford Mustang in April 1964 represented a changing of the guard for an automotive company that was still picking up the pieces following a disappointing previous decade. The Ford Edsel, which was supposed to help Ford keep pace with General Motors in the post-war period, bombed tremendously and lasted only three years of production.

In a stark contrast to the dark cloud perpetually surrounding the failed Edsel, the Ford Mustang garnered near-universal acclaim from those within the automotive industry, and more importantly, its ever-growing customer base around the United States. The Mustang won the hearts and minds of pony car enthusiasts everywhere and remained in the national spotlight for the better part of a decade.

As has been the case throughout history though, nothing good can last forever.

In 1970, the United States Government announced the first of many Clean Air Acts, which set forth a comprehensive list of federal and state regulations that were designed to limit emissions from both stationary and mobile sources. In a radical change in policy, the federal government took sizable steps to target auto emissions as one of its primary areas of concern and immediate action.

Though few city-goers would complain about cleaner air and a safer living environment, motorists, particularly performance driving enthusiasts, struggled to handle the new world order following the passage of the Clean Air Act. No longer needing rubber-burning, high-performance machines, American motorists began to turn their attention to more practical alternatives.

To further complicate the state of the US automotive industry, as the Ford Mustang’s First Generation entered its waning years, the Organization of Arab Petroleum Exporting Countries announced an oil embargo, targeting a number of Western nations, including the United States. In addition to the US and many foreign governments, the harsh financial penalties sent shockwaves throughout the offices at Ford and the American automotive industry as a whole.

In response to the rising fuel prices around the globe and the added emission laws in the United States, the major automotive manufacturers began to churn out smaller and more fuel-efficient vehicles. That is exactly what Ford did with the new Mustang II.

Mustang II Redesign

The team at Ford had steadily made subtle, yet noticeable, changes to the Mustang’s exterior and interior, without sacrificing too much of what people loved throughout the first generation. Then the uncertain economy combined with the political climate of the 1970s forced their hands. In response to declining sales and growing consumer concern about the price of gas, the Mustang was re-imagined as a smaller, more fuel-efficient vehicle.

Following the 1973 model year, the Ford Motor Company ushered in the Second Generation Mustang era, which represented a fundamental change from previous edition muscle cars. In a significant shift in its vision of the past, the newly dubbed “Mustang II” was based on the design of the Ford Pinto and was designed to compete against imports that were growing in popularity as a direct result of the fuel crisis.

Picture of Yellow Mustang II

In a dramatic change from what was a hallmark of the early years, the second generation Mustang marked the end of the famed Fastback model. In its place, the Ford Motor company introduced an all-new and longer Hatchback model that differentiated the Mustang II from pony cars of yesteryear.

In addition to the dearly departed Fastback, Ford temporarily put a stop to the production of Mustang convertibles for the entire second generation. The Mustang convertible did not return until the 1983 model year, which was four years into the Fox Body era.

The new platform and shorter wheelbase certainly distinguished the Mustang II from its predecessors visually, but arguably the biggest changes came under the hood. For its inaugural year, the Second Generation Mustang did not offer a V8 engine option for the first and last time in the pony car’s history. 1974 Mustang owners could choose between four-cylinder and V6 engine choices, which, not surprisingly, churned out unimpressive horsepower numbers (92 & 105, respectively).

The V8 eventually made its re-debut in 1975, but as was a theme in the Mustang’s Second Generation, the performance stats were nothing near what muscle car enthusiasts had come to expect (140 hp). The 1975 Mustang was slightly redesigned to accommodate the larger V8 motor. The changes included a revamped hood and an all-new header panel. The return of the V8 in 1975 helped the Mustang II remain relevant for the time being, but as you will discover, it was not sustainable.

Mustang II Sales

Because everyone loves something new and the industry changes called for it, the 1974 Mustang was deemed a widespread success out of the gate. With the uncertainty regarding the fuel shortage and the interjection of foreign cars into the competitive automotive landscape, American motorists appreciated Ford’s ability to adjust their needs and the changing market as a whole. What it lacked in performance capabilities, the initial Mustang II certainly made up for in fuel efficiency, which is exactly what was called for in the early 1970s.

For the 1974 model year, the Ford Motor Company unloaded 385,993 units, which was the fourth most in the iconic vehicle’s five-decade-plus history. The 1974 Mustang more than twice outsold the Chevy Camaro, which had also undergone a major redesign that same year. In an exciting turn of events for Ford, the 1974 Mustang won Motor Trend Magazine’s Car of the Year Award that year.

The critical acclaim marked the Ford Motor Company’s first Motor Trend Car of the Year recognition since the Torini’s honor in 1970. The 1974 Mustang is one of just two pony cars to win the coveted award, with the other banner year coming in 1994.

Mustang II Sales by year

Declining Numbers

The return of the V8 engine and the initial hype surrounding the Mustang 2 was not enough to sustain the new era’s initial success. After unloading no less than 300,000 units from 1965-1974, the sales numbers would not even sniff 200,000 for the remainder of the Second Generation. In 1975, Ford sold roughly 188,500 Mustang IIs, and nearly 1,000 less the following year.

The bottom fell out for the second-generation Mustang in 1977, when only 153,000 models were sold. The 1977 model year marked the first time in the Mustang’s history in which it failed to outsell the Camaro. In 1977, Chevy sold nearly 219,000 Camaros, which marked one of the greatest differences between the Mustang and its chief rival.

The Mustang II’s sales rebounded to eclipse 192,000 for 1978, but the gap between the Mustang and the Camaro only widened, which put the team at Ford on notice. The decline in its popularity combined with the rise of the Camaro towards the end of the Mustang’s Second Generation marked a sizable shift in the American automotive industry and set the tone for changes in the coming years.

Special Edition Second Generation Mustangs

The struggling seventies marked a difficult time for the Mustang brand and for performance driving as a whole. In an effort to buck the trend and to drum up some of the fading interest in the Mustang II, the Ford Motor Company debuted a slew of special edition models between 1976-1978.

Group of White Mustang IIs

The Second Generation is not always looked upon in the highest regard, but the Mustang II era marked the debut of the Mustang Cobra, which is one of the most popular special edition pony cars in the present day. The Cobra brand made several appearances throughout the pony car’s First Generation, but it was not until 1976 when Ford officially developed the Mustang Cobra as a stand-alone model for the first time.

Dubbed the Cobra II, the original snake featured a slew of race-inspired features, including an aggressive hood scoop, functional rear spoilers, and of course, racing stripes. The Ford Mustang Cobra II paid homage to the classic Shelby Mustangs of the past, but in order to grow the brand, Ford inserted a special Cobra emblem on its front fenders.

The Ford Motor Company continued to produce Cobras for the remainder of the Second Generation, highlighted by the 1978 King Cobra. The influential King Cobra included a deep air dam, special stripes, and a large snake decal on the hood, along with a V8 motor. Ford produced only 4,330 King Cobras, but the vehicle helped the Mustang regain some of its performance image that was lost in previous years and lift the pony car to its second-highest sale numbers since the genesis of the Second Generation.

Less notable than the Cobra, in 1976, the Ford unveiled the “Stallion” appearance group in several different colors, including bright yellow, white, silver, and black. The Stallion sports package contained a number of black features, including a blacked-out grille, bumpers, and body moldings, to go along with the styled steel wheels and attractive Stallion logos.

In addition to the Cobra models and the Stallion, the Second Generation Mustang also brought about the Sports Appearance Group and a special T-top edition in the 1977 model year. None of the special edition second-generation Mustangs are particularly sought after collectible items for classic car enthusiasts, but without them, Ford fans would likely not have welcomed in the more popular ones in the later years.

Mustang II Legacy

From its exterior to design flaws to its lackluster performance numbers, the Second Generation is a period of time that many Mustang fans view as a black eye of the otherwise riveting history of their favorite vehicle. With the wonderful amenities and technological innovations in the years that followed, it is common for classic automotive supporters and muscle car aficionados alike to cast a dark shadow over the Mustang II entirely.

Critics have panned that the Second Generation Mustang has very little (if anything) in common with the other five generations and that many of the Mustang II’s qualities are the antithesis of what the pony car is supposed to represent. The Ford Mustang II was never going to win any beauty contests or performance driving awards, but like it or not, the Second Generation marks an important period in the vehicle’s illustrious history.

With the oil crisis and the early-1970s emission acts looming large, the Ford Mustang could have easily gone the way of the Fairlane, the Galaxy, and other vehicles that did not last over a decade on the assembly line. Rather than folding due to outside pressures and declining interest, the Ford Motor Company instead set forth an ambitious quest to reform the Mustang to adjust to the times.

Group of Mustang IIs

The Mustang II era lasted just five years, which is the shortest of any of the pony car’s six generations, but the team at Ford displayed tremendous resolve through everything that was thrown its way during the difficult time period. Additionally, automotive historians have correctly pointed out that the Mustang II was indeed the right car at the right time in order to keep the American icon going.

The Ford Mustang is one of the few vehicles that have lasted 50-plus-years that did not take a break during a single model year, even during the toughest times, and the Second Generation Mustang deserves plenty of credit for preserving the pony car’s longevity.

So, the next time that you want to throw shade at the Mustang II or its small, but dedicated fanbase, keep in mind that without it, you may not be driving around in your Fox Body, SN95, S197, or S550 today!

This article was researched, written, edited, and reviewed following the steps outlined in our editorial process. Learn more about CJ's editorial standards and guidelines.