Ford Mustang Faces Sharp Sales Decline in Early 2025

Mustang sales dropped over 30% in early 2025 due to price hikes and competition. Ford offers discounts but faces challenges keeping the muscle car legacy alive.

Ford Mustang is facing a sharp sales decline in early 2025, despite being the last traditional American muscle car standing. In January and February, Ford sold only 5,191 Mustangs — a 34% drop compared to the same period last year.

The main reason behind the slump is aggressive price hikes. Compared to the 2024 model year, prices rose by as much as $3,700, with the V8-powered GT alone seeing a $2,700 increase across several trims. Another $1,000 hike followed in December, pushing the car further out of reach for many buyers. High auto loan interest rates — averaging 7.5% for new vehicles — added fuel to the fire.

In January, Mustang sales fell 36.4%, and February showed a 32.2% drop. Notably, the all-electric Mustang Mach-E outsold the gasoline-powered Mustang for the first time. Ford moved 6,841 Mach-E units in the first two months, while traditional Mustang sales plummeted.

External factors also played a role. Severe winter conditions in January 2025, with heavy snow and freezing temperatures, hit the entire U.S. car market hard. Retail sales dropped nearly 1%, and unsold vehicle inventory grew.

Meanwhile, the Mustang's price brought it dangerously close to rivals like the Nissan Z, Toyota Supra, and BMW Z4 — all offering similar performance and more modern interiors. The V8-powered Mustang GT now starts at $47,055, placing it in direct competition.

Ford’s decision to raise prices came just as the Camaro and Challenger exited production, leaving Mustang as the lone muscle car survivor. Instead of capitalizing on that advantage, Ford may have priced itself out of the market. In response, the company rolled out discounts — $1,000 off the EcoBoost and $2,000 off the GT. Still, even with incentives, the 2025 GT costs more than last year, starting at $44,560.

Ford now faces a serious challenge: reigniting interest in a model that has long embodied the spirit of American muscle cars. A rumored Shelby GT500 revival, codenamed "Legend" and slated for 2026, could inject fresh excitement with a supercharged V8. Whether that will be enough to revive the Mustang legacy remains to be seen.

Source: autoblog.com