The Mustang II had a worthy German-built rival in the Capri II

Mustang II and Capri II

I wait at the head of the pack, impatiently, for the light to change. In front of me is a hood scoop astride two wide stripes, and beyond it is the open road. A hooded snake is coiled to strike from each fender, warning any potential rivals that this is a Cobra. The light turns green, and I stab the throttle of the V-8, anticipating a thrust of power that will inevitably hurl man and machine forward as Carroll Shelby intended. The Honda Accord beside me, blissfully unaware that we are racing, putters away from the light calmly and efficiently, leaving me in its wake.

There was a time when buying a new Mustang Cobra off the Ford lot meant you were an apex predator armed with a screaming, high-compression small-block swilling leaded fuel through a four-barrel carb as fast as you dared to feed it. Apparently, 1977 was not that time. The Mustang Cobra II was certainly not what Shelby intended, and it proves the rule that sequels are never as good as originals.

[Editor's Note: This story originally ran in the March/April 2019 issue of Hagerty magazine. There was a strong reaction from Mustang II fans, who thought we were unfair to the car. In response to that criticism, we've published another Mustang II story which provides another perspective on the performance potential of the model. Turns out, you can make a Mustang II into a pretty sweet land-speed racer. Check it out here.]

During its three-year production run from 1976–78, the Mustang II’s optional Cobra II package was purely cosmetic. It consisted of a blacked-out grille, front and rear spoilers, quarter-window louvers, a hood scoop, and graphics. Depending on your perspective, it was the rock bottom of the Mustang’s long fall or, more kindly, a flickering light in the dark age of the Mustang II. Only the King Cobra was more ostentatious. That version of the Mustang II placed a Cobra graphic over the full width of the hood. The car resembled a Shrinky Dink version of the Pontiac Trans Am. In truth, that’s not fair to Shrinky Dinks, as they maintain their proportions after they’ve shrunk, and this Mustang is all out of sorts. It was not a good time to be a Mustang fan.

Am I being too hard on the Mustang II? Perhaps. It was the malaise era, of course, but couldn’t Ford do any better? Well, it turns out it did.

Behind me on the winding Southern California coastal road, also staring at Honda taillights, is Ford of Europe’s own take on a sporty compact, the Capri II. Considering the Mustang and the Capri share a pair of powertrains and were sold by the same company, in the same country, often in the same showroom, they could scarcely be more different.

As we pull into a gas station and park the pair at either side of a pump, the contrast in their styling is apparent. Both are based on compact cars, yet the Mustang seems like it’s trying too hard to fit into an oversized leather jacket, its hood scoop and window louvers affectations of the earlier GT350. The Capri, on the other hand, clearly has European roots—like a slick, sporty coupe, full of Italian panache but with the dimensions of the greenhouse stretched in favor of German practicality. Its styling isn’t perfect; few cars with such a humble origin and humble price point are.

Mustang II Cobra badge
Steering wheel
Mustang II Cobra
Larry Chen

Both cars belong to Southern California collector Hiram Bond, whose diverse portfolio of Italian and German cars includes this pedestrian pair. He has a sentimental attachment to these sporty Fords. Hiram bought a brand-new Capri II way back when, and his mother special-ordered a Mustang II Cobra while Hiram was in high school—this exact Mustang II Cobra, in fact. Hiram explains: “My mother drove station wagons her whole life. When she saw Farrah Fawcett drive the Cobra on Charlie’s Angels, she screamed. She told my dad she had to have that car.” Hiram recalls he and his mother paging through the brochure and noting a small mention of the Hunter Green stripe option. Rather than a clone of the Charlie’s Angels car, which wore the much more popular blue stripes, the order was placed for Hunter Green. Hiram sold his Capri II and never knew what happened to it, but about a year ago, this finely preserved specimen was for sale, and he snapped it up. It was just as he’d remembered and once again served as quite a contrast to the Mustang.

To learn more about the cars, and how the U.S. wound up with two disparate models filling the same niche from the same company, I emailed former Marine Corps aviator and auto industry veteran Bob Lutz, who was the chairman of Ford of Europe in the late ’70s, to ask if he’d like to chat and share his opinion on these two FoMoCo stablemates. He soon replied from his BlackBerry, “Sure. Do I have to say something positive?”

According to Mustang lore, Lee Iacocca’s original edict for the Mustang was a $2500 price and a curb weight under 2500 pounds. Ford engineers delivered on both by using the Falcon’s lightweight unibody chassis, which was inexpensive to manufacture. You know by now the Mustang was a huge sales success. It inspired Ford of Europe to use a similar recipe when developing the Capri, its own pony car for the European market for 1968, borrowing the Cortina’s platform and giving it a sporty makeover.

For 1970, the Ford Falcon, which still shared the first-generation Mustang’s underpinnings, was redesigned using a similar unibody structure and renamed the Maverick. Its Mercury Comet counterpart was also redesigned and continued to share sheetmetal, keeping its name. When they were released, both were smaller and rode on shorter wheelbases than the Mustang and its Mercury Cougar twin. There was plenty of room for a car below them in the lineup to compete with the scads of imports already nibbling at Detroit’s bottom line. Ford developed a new subcompact with a similar command from Iacocca, this time with a goal of 2000 pounds and $2000. The Pinto was born.

With no Mercury subcompact available—at least not yet—Ford brass decided to fight the influx of imports into North America with an import of its own. Touted in ads as “the first sexy European under $2300,” the 1971 Capri landed on U.S. shores six years to the day after the first Mustang debuted. By then, Ford’s homegrown Mustang was significantly larger and more expensive, with a base price of $3000. Whereas the German-built Capri was marketed in Europe as a Ford and wore the company name in lettering across the hood, the U.S. version was devoid of the Ford name or any blue ovals. There were also no Mercury emblems to be found. Instead, it was sold as a more upscale sports car, playing on its European origin in ads that noted it was “imported for Lincoln-Mercury.”

Although the Capri has a soft, plush interior and family-car looks with its taller greenhouse, it is a far more focused machine, with a firmer suspension and better road feel. It is more responsive to driver inputs, partly because of a manual transmission that delivers actual throttle response. If the Mustang had been equipped with a manual, or a more quick-shifting automatic, the contrast might not have been as stark.

The Capri’s V-6 seemed livelier and quicker to rev as I drove some twisty roads around the Palos Verdes peninsula south of Los Angeles. At 109 horsepower, the 2.8-liter V-6 made for a surprisingly even match to the Mustang V-8’s 139 horses, thanks in part to the Capri’s manual transmission. My main criticism was of the shifter. To call it vague would be an understatement. I felt more connection with a machine the last time I watched Arnie play the original Terminator. Find a road where you can leave it in second, and the Capri is soon forgiven as the V-6 revs eagerly. Free from worrying about the clutch pedal, your left foot can find the windshield-washer switch on the floorboard that does an excellent job of posing as a dimmer switch. German market quirks aside, the Capri communicates with the driver and is fun to steer in the way that most low-powered yet lightweight cars are. It feels small, not because the pillars are thick and the center console is massive, but because it’s actually small.

Despite being way down on displacement, the Capri had no problem keeping up with the V-8 Cobra as we meandered through Palos Verdes, California.
Larry Chen
Despite being way down on displacement, the Capri had no problem keeping up with the V-8 Cobra as we meandered through Palos Verdes, California.

By 1973, the big, bulky Mustang had lost its potent engines, and sales were beginning to suffer. Although it was still in its first generation, the Mustang was ready for a rebirth, a return to its original promise as a nimble, lightweight car with modern styling. Ford’s North American execs saw what OPEC and the EPA were up to and knew the big-block’s days were over. They began developing the next Mustang with the smallest, lightest platform they had, that of the subcompact Pinto. Bob Lutz, who would later leave Ford to help usher in the four-cylinder K-cars at Chrysler, explained Ford’s difficult task: “We were facing a federal mandate of 27.5 mpg, and nobody really knew how to get there.” Ford chose the easiest way to improve fuel economy: Make cars with less frontal area, and shrink engine displacement.

Ford engineers set the new wheelbase at 92 inches, 17 inches shorter than the outgoing Mustang’s and two inches longer than the Pinto’s. Overall length, however, was a foot longer than the Pinto’s. Indeed, the Mustang II had the same amount of total overhang as the much larger 1973 model it replaced, but on a much shorter wheelbase. This was Lutz’s major gripe about the car, and he didn’t hold back, telling me, “The Mustang II was a catastrophe. It didn’t have enough wheelbase. It was probably the only car in the world to have excessive front overhang, excessive rear overhang, and excessive lateral overhang. They did the best they could to make it kind of look bigger than it actually was, and it was an aesthetic disaster.” Ouch—and just when the looks of the Cobra were beginning to grow on me. But Lutz wasn’t done: “The Mustang II is the ultimate proof that the best designers in the world can’t produce a commercially acceptable design if the proportions are wrong.”

Fresh out of an extended stay in storage, our Mustang sluggishly cranked over and chugged to life. Despite the extra displacement, the Mustang’s 5.0-liter V-8 was saddled with a slow-shifting three-speed automatic and a spongy torque converter that sapped what little of the small-block’s pep managed to eke past the smog pump and emissions throttling. The Mustang’s V-8 seems to make more noise than horsepower. The rush of air from the engine fan drowns out much of the beloved small-block Ford engine note. The rest is swallowed by the overachieving mufflers. The overboosted steering, the cushy springs, and the body roll would lead you to believe you were piloting a luxury barge rather than a supposedly sporty subcompact. The Mustang also had more discernible rattles and squeaks, with the hatchback piping up with a groan every time the chassis flexed. It’s perfectly suited as a runabout; it’s just decidedly not as fun as the Capri II.

The Mustang’s cabin edges out the Capri’s. Available in red, white, blue, or black, it was dated at the time but now seems perfectly fitting for a sporty, no-nonsense machine. The comfortable seats help distract me from the numerous squeaks and rattles. Again, points to the Capri II for quality.

European mustang II
wheel detail
Eventually, the exchange rate killed the Germanbuilt Capri’s chances in the U.S., but the Fox body was just around the corner, and the larger, more modern platform would usher in a new Capri, this time with real Mercury badging.
Larry Chen
Eventually, the exchange rate killed the Germanbuilt Capri’s chances in the U.S., but the Fox body was just around the corner, and the larger, more modern platform would usher in a new Capri, this time with real Mercury badging.

With the Mustang downsized for 1974, Mercury, Ford’s mid-tier brand, was left without an entry in the sporty compact field. The Mercury Cougar, the Mustang’s former pony car counterpart, joined the larger personal luxury market. The Cougar’s move to Pontiac Grand Prix and Oldsmobile Toronado territory meant the Capri, imported from Europe since 1970, would be the de facto pony car for Lincoln-Mercury dealerships. It, too, was redesigned for 1974 and, like the Mustang, added a Roman numeral to its name. The Capri II’s styling changes were evolutional, as the basic shape was unchanged, yet it was taller, wider, and more spacious, with a new hatchback in place of the trunk, adding practicality.

Versions of the Capri II for the U.S. market shared the Pinto’s engines: the OHC 2.3-liter four and the 2.8-liter V-6. Even without a V-8 option, Lutz recalls the Capri with affection, noting, “From a dynamics standpoint, it was a far superior car to the original Mustang.” His main critiques were the changes made to help it fit in at Lincoln-Mercury dealerships by adding thick, wide vinyl body-side moldings that wrap high around the car, disrupting its sculpted fenders and quarter-panels. Federally mandated 5-mph bumpers didn’t help, either. The proportions were right for a pony car, however, with a longer, 102.0-inch wheelbase and the proper long-hood, short-deck look, with wheels pushed to the corners.

Of course, there were questionable stylistic additions on the Cobra II as well. Whether it was a Cobra II, King Cobra, or Mach 1, the top engine in the Mustang II was the same engine you could opt for in the base car, a 139-hp 302 V-8 that wheezed through a two-barrel carb and valves that were briefly waved open by a camshaft with so little lift it could double as a rolling pin. That didn’t stop Ford from plastering the Cobra II with all sorts of adornments that pointed to improved performance but didn’t deliver. Despite the boy racer jokes, stickers and graphics don’t add horsepower, and neither did the Cobra II’s nonfunctional hood scoop. For 1978, Ford even turned the scoop around backward when it added bold new graphics and zero additional horsepower. It’s not like Ford had anything to lose. Lutz was especially hard on the Cobra II trim: “It had all those graphics and spoilers on this pathetic little thing. It has to rank up there as one of the biggest mistakes in the history of the industry, including the Aztek.” As a Pontiac fan myself, that one stung.

Considering they were developed simultaneously, I asked Lutz if any thought had been given to basing the Mustang II on the Capri II rather than the Pinto. “Well, that would have been my vote,” he explained. “And it would have been any intelligent person’s vote, but this was before the days of global product development. The Capri II was a nice car, but the two sides of the Atlantic weren’t talking to each other. Everybody did their own thing, and the U.S. was convinced the Mustang was such an icon that they could do whatever they wanted with the name and it would somehow turn out to be a sales success, which of course the Mustang II wasn’t.”

The Mustang II looks sportier than the Capri II from most angles. Unfortunately, the hood scoop that is so much fun to look at doesn’t do the engine any favors.
Larry Chen
The Mustang II looks sportier than the Capri II from most angles. Unfortunately, the hood scoop that is so much fun to look at doesn’t do the engine any favors.

Lutz was partly right. As the Mustang II was being introduced in late 1973, OPEC declared its first oil embargo that threatened to forever end America’s love affair with cheap gasoline. The Mustang was poised to capitalize, debuting for 1974 with a fuel-efficient four-cylinder for the first time. A 2.8-liter V-6 was optional. The V-8s were gone. Surely, it was doomed to fail. A mob would descend on Dearborn wielding Edelbrock Torker intake manifolds, demanding a Mustang they could bolt them onto.

There was no mob, there was no last-minute V-8 for 1974, and the reborn Mustang II was nonetheless a sales success, at least initially, moving almost 400,000 copies without a V-8 on the menu. Ford has not had a more successful year of Mustang sales since. The following year, with a 302 V-8 back on the options sheet, sales fell to 190,000, the single largest year-over-year drop in Mustang sales by volume and percentage in the model’s history. Sales slid in 1976 and ’77, but only slightly. Over the same three years, sales of the rival Camaro and Firebird increased, helped in part by the Smokey and the Bandit phenomenon.

The high rate of inflation triggered by the recession of the early and mid-1970s caused MSRPs to climb throughout the decade. The German-built Capri faced an even tougher hurdle as the deutsche mark made strong gains against the U.S. dollar. By 1977, the Capri’s base price had climbed to $4585; the Mustang started at $3700. A V-8–equipped Mustang Mach 1 or Cobra II with all the bells and whistles would be priced similarly to a four-cylinder Capri II without air conditioning. At that price, its superior handling was a tough sell, and buyers weren’t motivated; 1977 was the Capri II’s final year in the U.S. market.

Hiram Bond’s Mustang II is a miraculously intact time capsule, allowing a clear look 40 years into the past. A pony car is not always a muscle car, and even in the heyday of muscle, there wasn’t a 12:1, solid-roller big-block engine under every hood. It was the sales of those inline sixes and grocery-getter small-blocks that created the economies of scale that allowed for the more fearsome trim levels to be developed.

A pony car is supposed to be appealing and sporty-looking, even if it doesn’t always deliver the performance promised by the styling. However, by the early 1970s, consumers had come to expect the Mustang to offer performance somewhere in the lineup, and the Mustang II never truly did. That’s not to say there’s no place for these kinds of cars in a collection, especially any car with sentimental value. Hiram told me, “I’d sell most of my collection before I ever got rid of it.”

In its defense, the Mustang II, like many Fords before it, gave hot rodders an inexpensive entry point for V-8 power, even if it took a year. Virtually any small-block V-8, regardless of manufacturer, is only an intake, a cam, and a set of headers away from a whole new demeanor. By 1976, hopping up a 302 was old hat and one stop at your neighborhood speed shop. A phone call to Performance Automotive Warehouse, Summit, or Jegs could have a heap of parts ready to remedy that situation.

Still, Lutz was right. The Capri, even in its “tarted-up U.S. version,” as he says, was still the better of the two. The Mustang II missed the mark when it came to design and never backed it up with any great engines or inspired handling. The Capri II was good enough that you could forgive the lack of a V-8, if not the price. Perhaps it could have picked up the Mustang mantle had it been built in the States, wearing a galloping Mustang emblem and bridging the gap between the iconic first generation and the much-loved Fox-body. It’s maybe a bit more dour and less rakish, but at least it’s no Pinto.