The 1968 Mustang receives little change cosmetically. The galloping pony emblem is integrated more subtly into the hollowed grille; chrome block "Ford" letters disappear from the hood; reflectors, adjacent to the front and rear bumpers, are added. The side scoops were thin chrome pieces, and "Mustang" on the fenders was written in script rather than block letters. 1968 was the first year for shoulder seat belts.
Powertrain changes are more dramatic. The 302 cid V8 replaces the venerable 289 cid V8. The 302 becomes one of Mustang’s best-known blocks due to its longevity; it would stay in the lineup until 1995, with the exception of the 1974 and 1981 model years. A Motorcraft carbureted 427 cid V8 overpowers the next closest block, the 428 cid V8, making 390 horsepower at 4,600 rpm.
Combined with the GT’s standard front disc brakes, performance tires, heavy-duty suspension, and dual exhaust with chrome quad outlets, the engine elevated this pony car it its raciest version yet. New cosmetics also were included for 1968, with new styled steel wheels in chrome or painted silver with special GT hub caps, and new « C » stripe that accented the side scoop.
The West Coast-only Mustang GT/California Special was available in 1968. The car was available only in coupe form. The Shelby-inspired car had the same grille, fog lamps, and rear fascia as the Shelby models from that year. « GT/CS » was printed on the Shelby-style side scoops. The wheels were the same as GT wheels, but without the GT center caps. Only 251 High Country Specials were produced, and they were all coupes.
Shelby production moves from California to Michigan. Shelby hires the A.O. Smith Company to make the Shelby Mustang conversions. The GT-350 and GT-500KR each receive Cobra snake emblems.
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