Ford shuts Mustang factory for a week after sales plunge

Ford Motor is shutting its Mustang factory in Michigan for a week after the iconic sports car suffered a 32 per cent sales decline in the US last month and was outsold by the Chevrolet Camaro for the first time in almost two years.

The second-largest US automaker idled the factory in Flat Rock, south of Detroit, to match production capacity with demand, Kelli Felker, a company spokeswoman, said in an e-mailed statement. The plant, which employs 3,702 workers and makes Mustangs and Lincoln Continentals, will resume production October 17, Felker said. Under the automaker's labor agreement, workers will be paid during the shutdown.

The idling may be a sign of the growing weakness of the US auto market, which had been a leading driver of economic growth. Automakers' monthly sales have been coming up short - though they beat expectations in September - and many analysts are now predicting the US auto industry won't match last year's record of 17.5 million cars and light trucks.

Mustang, which is among Ford's most storied nameplates, received a racy redesign two years ago on the car's 50th anniversary. That new look helped propel the Mustang past the Camaro in 2015 to regain its title as the top-selling sports car in America, which it had held for decades before General Motors redesigned the Camaro in 2010.

Camaro overtook Mustang last month for the first time since October 2014 on the strength of incentives that more than tripled last month to $3,409 per car, compared with an average discount of $2,602 on the Ford pony car, according to data from researcher JD Power obtained by Bloomberg.

"In terms of incentives, we're always going to be disciplined, but we'll be competitive as well," Erich Merkle, Ford's sales analyst, said in an interview. Ford has sold 87,258 Mustangs in the US this year, down 9.3 per cent, while GM had Camaro sales of 54,535, off 11 per cent, according to researcher Autodata Ford Chief Executive Officer Mark Fields has said the US auto market has plateaued and that showroom sales are weakening.

Ford began selling Mustang globally last year, and the factory produces... read full story