1974
The Mustang II arrived -- re-emerging as a “small car.” Reduced in size and weight, it was a serious attempt to recapture the verve and spirit of a previous era. Ford management had recognized the problems of the oversized Mustang and with several years lead time, again sponsored a design competition to create a 1974 Mustang that would have to be one thing. It would have to be a “little jewel.”

This was a time when the oil crisis was being felt at the gas pump. In addition, insurance rates for high-powered cars were soaring out of sight. Market research showed people were interested in sporty-looking subcompacts that didn’t necessarily leave a strip of rubber on the street. Research also showed small foreign cars were continuing to sell well. The answer was something sporty and nimble, with superior handling, quality, fine engineering and fresh design characteristics. 

The downsized result was a total departure from the Mustangs of recent years. Available in only two body styles -- two-door hardtop and three-door hatchback -- it did retain Mustang’s characteristic long hood/short deck configuration, along with a return to side sculpting and as always, the distinctive Mustang grille.

Two engines were offered -- a basic 140ci, 2.3 liter, overhead cam, four-cylinder rated at 88hp or an optional 171ci, V-6 producing 105 horsepower, neither of which could generate any appreciable performance for a platform weighing 3,000 pounds.

The front suspension was redesigned with springs located between the control arms; a front subframe isolated the engine from the rest of the chassis because of the vibration inherent in four-cylinder engines; rack and pinion replaced re-circulating ball steering; front disc brakes were standard as were staggered rear shocks, and a four-speed manual transmission was standard equipment.

The 1974 was available in three models -- the basic two-door or three-door; the luxury-oriented two-door “Ghia” hardtop, or the Mach 1 hatchback. The Ghia, named after the Italian coachworks design studio that Ford had acquired several years earlier, replaced the Grande as the luxury entry. The name also implied some degree of European panache. The Ghia upgrades included the luxury interior group; digital quartz clock; deluxe seatbelts and shag carpeting, to name a few. 

The Mach 1 came with a 2.8 liter V-6. Its unique bodyside treatment with Mach 1 lettering set it apart and a Rallye package helped it live up to its performance potential. The upgrade included a Traction-Lok differential; CR70x13 wide oval radials; competition suspension; extra cooling package, styled steel wheels with trim rings and a leather-encased steering wheel. Other options were a manual sunroof; forged aluminum wheels and an anti-theft alarm system.

With a silhouette and dimensions closer to the '65 Mustang, Mustang II was the right car for the times. Strong first year sales confirm that a smaller platform, gas-efficient powertrain and the addition of rack-and-pinion steering were welcome changes. Even the pony, alone without its corral on the eggcrate mesh front grille, was redesigned and seemingly slowed from a gallop to a trot, perhaps in the interest of energy conservation.

Sales for 1974 rebounded. Production of Iacocca’s “little jewel” more than doubled to 385,993, or just 10 percent less than the 12-month total for the first Mustang. Numbers for 1974 included 177,671 two-door hardtops; 74,799 hatchbacks; 89,477 Ghias, and 44,046 Mach 1 hatchbacks. The four-cylinder, two-doors retailed for $3,134; hatchback s for $3,328 and Ghias for $3,480. The six-cylinder Mach 1’s sold for $3,674.