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In the early 1960s in response to the success of the Corvair Monza, Ford president Lee Iacocca formed a clandestine "Fairlane Committee" with other executives to explore the feasibility of developing a sporty compact car for the emerging Baby-Boomer generation. Knowing that Henry Ford II was still bitter about the recent failure of the Edsel, Iacocca and his group kept development costs low by utilizing existing drivetrains and basing the new car on the Falcon platform. After much debate about a name, "Mustang" was finally chosen, initially for the World War II fighter plane but later taking on an equestrian identity as a "wild horse of the western plains.
Ford introduced the '65 Mustang on April 13, 1964, at the New York World's Fair, followed by an elaborate marketing and advertising campaign prior to the car's public introduction on April 17. The new car was an immediate success, with dealers taking orders for 22,000 on the first day. Over 400,000 were sold in first 12 months; sales topped one million in the first two years. It remains one of the most successful car launches of all-time.
Based on evolving variants of the Falcon chassis, Mustangs produced from '65-'73 are recognized as the "first generation." When first introduced, '65 Mustangs were available as hardtops and convertibles with a fastback joining the line-up in August 1964. Cars built from March to mid-August 1964 are known as "'64½" models because they were produced during Ford's 1964 production cycle, although all first-year Mustangs carry a '65 Vehicle Identification Number (VIN).
The first Mustang was a long hood, short rear deck design, providing a sports car profile in a four-seat configuration. A number of design cues – open grille, side sculpting to emulate rear brake scoops, and tri-bar taillights – would become Mustang styling features for the future.
In late 1964, Ford asked Carroll Shelby to prepare Mustang fastbacks for sports car racing. By removing the back seat and modifying the engine/suspension, Shelby created the GT 350, both as a street model and an SCCA race car, known as the "R-Model," which went on to win the 1965 B-Production championship. Shelby Mustangs were offered through '70.
Marking the Mustang's first anniversary on April 17, 1965, Ford added a pair of packages to the Mustang's option list. To create the first GT Mustang, the GT Equipment Group included fog lamps, side stripes, "trumpet" exhaust tips, and heavy-duty suspension. A Décor Interior Group came with woodgrain trim, molded door panels, and unique bucket seats with embossed running horses, inspiring the name "Pony interior."
For 1967, the Mustang was updated for the first time with new, more sculpted sheetmetal and its own interior, as opposed to the Falcon-style interior of the earlier models. The Mustang also grew in size to accommodate the 390 big-block engine as an option. Shelby added a new GT 500 model with a dual-quad 428 engine. Mustang joined the musclecar ranks with the introduction of the 428 Cobra Jet engine for the GT on April 1, 1968. Earlier in 1968, Cobra Jet Mustangs won the Super Stock class at the NHRA Winternationals.
The 1969 Mustang grew once again, becoming more muscular in appearance. Two new models debuted – the Mach 1 for the fastback, now called "SportsRoof," and a luxury Grande for the hardtop. A Ram-Air option for the 428 Cobra Jet added a "Shaker" hood scoop that protruded through the hood. The Boss models were introduced at mid-year to homologate special engines for racing – the Boss 429 for NASCAR and the Boss 302 for Trans-Am. Parnelli Jones and George Follmer won the 1970 Trans-Am championship in Boss 302 Mustangs prepared by Bud Moore.
With larger engines predicted for the future, the '71 Mustang grew larger still, reaching almost intermediate size. The 428 Cobra Jet was replaced by the 429 Cobra Jet, while the Boss 302 gave way to the Boss 351 when Ford discontinued racing activities in the summer of 1970. With increasing insurance rates and stricter emissions requirements, the 429 disappeared in '72, leaving the four-barrel 351 as the top performance engine for '72-'73.