And while the design of Ford’s beloved steed has evolved over the years to reflect the needs of a changing world, Mustang has never lost its essence – that certain cache that makes it an American icon. At no point in history is this more evident than in the period from 1974 to 1982, when the brand endured two major transformations.

Next month, Ford and the Mustang Club of America will commemorate the 45th anniversary of the Ford Mustang with a four-day celebration in Birmingham, Ala. During the weeks leading up to the anniversary, we are taking a nostalgic look back at Mustang history. Last week, we took you back to the early years, 1964-1973. This week, we begin with 1974.

The Ford Mustang: 1974-1982
It’s 1974. Americans have lost faith in government, following the Nixon Watergate scandal, but the country is moving forward under the direction of President Gerald Ford. The Vietnam War is coming to an end. Peace signs, mood rings, hip-hugger pants and pet rocks all are popular signs of the time. “One Flew over the Cuckoo’s Nest” wins the Oscar for Best Picture, and “All in the Family” continues to be a ratings success on television. “Love Will Keep Us Together,” by Captain and Tennille, is at the top of the record charts. The cost of a postage stamp is 10 cents, and there is a gas shortage in the U.S. – the likes of which hasn’t been seen since World War II.

The oil crisis, rising insurance premiums and tighter emission control standards helped bring the era of high-performance muscle cars to an abrupt end in 1973, and Ford responded with the second generation of the Ford Mustang – the smaller, more fuel-efficient Mustang II, which debuted in 1974.

1974 Ford Mustang (Image: Ford)

1975 Ford Mustang (Image: Ford)

1976 Ford Mustang (Image: Ford)

1976 Mustang Cobra II (Image: Ford)

1977 Ford Mustang Cobra II

The Mustang II – built on a derivative of the “Arizona” platform that gave Ford the Pinto – was 19 inches shorter and 490 pounds lighter than the 1973 Mustang. The 1974 model year was the first ever that a V-8 was not offered in the Mustang, and the Mustang II years never saw a convertible option.

Despite its smaller size, the Mustang II brought back traditional Mustang design cues, such as the side scallops from the ‘60s. It also retained classic Mustang traits, like three-place taillights, setback headlamps and the running horse in the grille.

Though the Mustang II has been much maligned over the years by some enthusiasts who claim the car lacked the power and luster of a true Mustang, it was a strong seller for Ford. In its first model year, nearly 386,000 vehicles were sold, and the Mustang II captured the coveted title of Motor Trend “Car of the Year.”

“The fact that the Mustang II arrived amid the Arab Oil Embargo was further testament that Ford had, indeed, delivered the right car at the right time,” said John Clor, author of the book The Mustang Dynasty. “There’s no denying that the II had connected with its customers in a way few cars of that era had.”

Performance-hungry enthusiasts prompted the return of the V-8 to the Mustang lineup in 1975. Ford introduced the Shelby-inspired Mustang Cobra II in 1976. And a special edition King Cobra Mustang debuted in 1978.

King Cobra Mustang 1978 (Image: Ford)

Mustang’s third major transformation

The third major transformation in the history of the Ford Mustang came in 1979, when Ford introduced a sleek, European-inspired pony car. The all-new vehicle shared its Fox platform with the Ford Fairmont and the Mercury Zephyr, and it was totally different from everything else on the road.

1979 Ford Mustang (Image: Ford)

1980 Ford Mustang: The Design needed a girl for attracting men (Image: Ford)

“We wanted to make a fresh statement for Mustang,” recalls Jack Telnack, chief designer of the 1979 Mustang. “We were very strongly influenced by European design, and we knew that we had an opportunity to make a contribution to the fuel economy of the car by more efficiently bending the sheet metal, giving the car a more aerodynamic wedge shape.”

Unlike its predecessors, the 1979 Mustang featured a slant-back front end. It was four inches longer in body length and wheelbase than the Mustang II. And though it was a bigger car with a more spacious interior, it was 200 pounds lighter than the previous Mustang, due to advanced body engineering and the increased use of lightweight materials.

“We actually wanted people to be uncomfortable with the car when they first saw it because if they weren’t uncomfortable with it, that would mean they had seen it before,” said Telnack. “It took people a little while to get used to the new look, but once they did, they understood the design, and they appreciated that it was a Mustang.”

It didn’t take long for people to fall in love with the new Mustang. Ford sold 370,000 cars in the vehicle’s first year.

1982 Ford Mustang (Image: Ford)

No significant changes were made to the Mustang between 1979 and 1981, but in 1982, the “Boss” was back. The Mustang GT returned after a 12-year absence, and the 5.0-liter V-8 engine returned for specially equipped 1982 Mustang hatchbacks. At the heart of the Mustang performance revival was a tweaked “high output” 302-cubic-inch small-block engine that produced 157 horsepower – the most since 1971.

During the four weeks leading up to the Mustang’s 45th anniversary, we will take a nostalgic look back at five historic generations of its longest-running nameplate, beginning with the early years, 1964 to 1973.

The First Generation of the Ford Mustang

Flash back to the spring of 1964. The mood of the country is still sullen, following the 1963 assassination of John F. Kennedy. Lyndon B. Johnson is leading the nation forward as president of the United States. “Beatlemania” is sweeping the country, with hits like “I Want to Hold Your Hand” and “Can’t Buy Me Love” at the top of the Billboard charts. The price of gas is 30 cents a gallon, and it costs 5 cents to buy a postage stamp. “The Beverly Hillbillies”,  “Bonanza” and the “Dick Van Dyke Show” are among the most popular shows on television, and “From Russia with Love” starring Sean Connery as James Bond, is playing at U.S. theaters.

On April 17, 1964, the Ford Mustang, with its long hood, short rear deck and sporty features, caused a sensation when it was introduced to the public at the New York World’s Fair in Flushing Meadows, Queens.

1964 1/2 Ford Mustang Convertible (Image: Ford)

In 1962, Ford Designer Jack Telnack sketched a proposal for the original Mustang fastback If you look closely at the rear end of the car, you will notice an interesting bit of trivia. The car bears the name "Cougar," which was the code name for the Mustang project until the actual Mustang name was approved. (Image: Ford)

1971 Mustang (Image: David Newhardt/ Mustang - Forty Years)

1973 Ford Mustang Mach 1. (Image: David Newhardt/ Mustang - Forty Years)

1966 Shelby Mustang GT-350H (Image: Ford)

“When the Mustang was unveiled, the reaction was so positive that there was no doubt it was going to be a success,” recalls Joe Oros, chief designer of Ford’s original pony car – dubbed the 1964 – because it was launched at an unusual halfway point in the year.

Don Frey, product planning manager for the original Ford Mustang, says he knew the car was going to be a hit months earlier when the design team gave Ford employees a sneak peek at one of the prototypes.

“We built the first prototype in an experimental garage, and employees flooded the place to see it,” he said. “Their reaction was spectacular, and it was very revealing to us. We knew the car was going to be roaring success from the start.â”

And what a success it was.

The 1964 Mustang debuted at a price of $2,368  -  a bargain even in 1964. Ford expected annual sales of about 100,000 units. But 22,000 Mustang orders were taken on the first day, and sales reached an astounding 417,000 in the car’s first 12 months on the market. Within two years, Mustang sales reached one million.

Frey says he believes the car had such dramatic appeal because the styling was very unusual for its day.

“The design was very European, particularly the front end,” he said. “There was no other car like it in North America at that time.”

Another facet of Mustang’s appeal was that it could be any vehicle the customer wanted it to be. The original Mustangs were available in three body styles – convertible, hardtop or fastback – with the most extensive list of options Detroit had ever offered. The Ford Mustang could be an economical “base” car, a macho high-performance car or a luxury car.

“Mustang was designed to be designed by you,” one of the original print ads declared. And it was true. Everyone who owned a Mustang believed no one else had a vehicle like theirs, and the vehicle had broad appeal.

“We were told to design a car that the ladies would love that the men would love just as much, and that’s exactly what we did,” said Oros.

Marketing studies conducted at the time showed that women bought as many Mustangs as men.

“They loved the styling, and the car was very affordable,” said Frey. “Women bought it by the thousands.”

Frey, now 86, is the proud owner of one of the original Mustangs -built in June of 1964. It’s a red hard top with a white interior, and he keeps it parked in his home garage.

“I have a driver who comes by, and we take it out,” he said. “To this day, people stop us and ask if it’s an original Mustang.”

At age 92, Oros says he’s still as passionate about the Mustang as he was 45 years ago. “He wants me to stop in the middle of the freeway whenever he sees a Mustang, and I tell him that we can’t do that,” said Oros’ driver and caregiver Violeta Orlanda. “When we do stop somewhere, he searches the parking lot to find the Mustangs, and he insists on checking them all out in detail from front to back.â”

Oros says his fascination and fondness for the pony car he helped create will never end. “It makes me feel proud every time I see one,” explained Oros. “After all of these years, Mustang has never lost its luster.”

Frey is equally as proud. “We created an icon,” he said. “And I had a hand in it.”

With “Mercedes-Benz Young Classics,” Daimler AG is setting its sights on a new, promising business segment. On this foto: Mercedes-Benz SL-Roadster, model range 107, from 1971 to 1985. (Image: Mercedes_Benz)

Daimler has opened the first “Mercedes-Benz Young Classics Store” as a pilot project in the Mercedes-Benz Museum in Stuttgart. Here, customers are able to purchase, rent, insure, and even finance the young classics on offer. The store offers a variety of cars dating from the 1970s onwards, all in first-class condition. Interested parties can also view the range of available young classics online at http://www.mercedes-benz.com/young-classics.

Daimler also hopes to open up interesting new growth potential in Europe and the United States by expanding the spare parts business for the classic cars made by Mercedes-Benz. In doing so, Daimler is meeting the demand of classic car enthusiasts for original spare parts, while also expanding the current product range.

Young classics are vehicles between 15 and 30 years old. According to Germany’s Federal Office for Motor Vehicles, the market in Germany for young classics comprises approximately 6.6 million automobiles, 1 million of which are Mercedes-Benz cars, representing a market share of 15.6 percent.

Surveys by FIVA and Dekra show that around 60 percent of all owners of Mercedes-Benz young classics are between 21 and 50 years of age. Only 20 percent of them use those cars as their main vehicle.

Mercedes-Benz Young Classics is supported by the Business Innovation unit. The aim of the Business Innovation Team is to explore growth opportunities along the entire value chain. The focus is on unexploited potential within the company, as well as new business ideas relating to the current core business. Mercedes-Benz Young Classics demonstrates the breadth of the opportunities that exist for translating inherent strengths into additional, profitable growth.

Mercedes-Benz Young Classics will be presenting its product line at the Techno-Classica trade fair in Essen (April 1-5, 2009), the world’s largest fair for classic cars.