[4][5] In 1969, Ford began research predicting the emergence of the luxury compact segment, driven by gasoline prices, multiple-vehicle families, and urban traffic.

[6] To expand its sales potential of fuel-efficient automobiles, the Ford Granada was redeveloped before its launch, becoming an additional compact model line.

While not intended as a direct competitor for European luxury sedans (such as Mercedes-Benz or BMW), Ford intended for the Granada to be sold to buyers either downsizing from a larger intermediate or full-size car while wanting to retain the same comfort and convenience features along with buyers seeking to upgrade from a lower-content compact car.

In response to increased demand for compact-segment automobiles, Ford continued the production of Maverick (through the 1977 model year); the Granada was repackaged as a premium vehicle in its segment.

Using unibody construction, the Granada was equipped with coil-spring front suspension and a leaf-sprung live rear axle (in contrast to larger Ford sedans).

[8] While the Granada was largely a clean-sheet design, the forward part of the floorpan of the Maverick was adopted into the unibody structure, along with elements of the steering gear and suspension.

In a major shift away from the Coke-bottle styling of the Ford Maverick, the Granada adopted a combination of both U.S. and European design elements.

[10][11] In addition to cosmetic upgrades (styled steel wheels, exterior striping, bucket seats, and interior trim) the Sports Coupe was given heavy-duty suspension and larger front brakes.

[12] A 1977½ variation on the Granada Sports Coupe, produced from May 1977 through the end of the model year, featured blacked-out molding, modified trim, taillights, and color selections.

Externally distinguished by a vinyl roof,[6] the Ghia received an upgraded interior; with either cloth or leather seats offered as options, along with a wood-trimmed dashboard.

[9] Ford did not offer its own equivalent of the 1975 to 1976 Mercury Grand Monarch Ghia;[17] the trim line was repackaged as the Lincoln Versailles for 1977.

For the 1983 model year, as part of a major realignment of the Ford and Mercury product lines, the Granada nameplate was withdrawn.

As part of a mid-cycle revision, the model line effectively continued as the Ford LTD (the LTD Crown Victoria remaining as full-size sedan).

[19] In a break from the previous generation, the second-generation Granada shifted away from European-influenced styling, sharing many visible body parts with the Fairmont (including the doors).

Although stamped on door threshold trim on Ford-division (and Continental Mark series) cars for many years, the blue oval had been absent on vehicle exteriors in North America since the 1930s.

The blue oval had remained in wide use as the company corporate logo in sales literature, advertisements, owners manuals and on dealership signs.

During its production, the North American Ford Granada was also marketed by the Lincoln-Mercury, with the division selling three counterparts of the model line.

In line with the previous-generation Monarch, the Cougar sedan/station wagon were nearly externally identical to their Ford Granada counterparts (differing only with grilles, taillamps, and badging).

For 1977, Lincoln-Mercury repackaged the Mercury Grand Monarch Ghia (a personal car of Henry Ford II) as the Lincoln Versailles.

In line with its Cadillac counterpart, while the smallest Lincoln ever produced at the time, the Versailles was the highest-price vehicle sold by the division, undergoing a strict quality-control regimen during assembly and including nearly all available features as standard equipment.