Retaining the same wheelbase as the XC, but with a 20-millimetre (0.79 in) increase in front track,[5] the XD featured a new, smaller body with no reduction in interior space,[3] and crisp styling that reduced aerodynamic drag by ten per cent.

[4] There was a further 24-kilogram (53 lb) saving on six-cylinder models following a mid-life update in June 1980 that included the introduction of an alloy cylinder head and electronic ignition,[6] with the improved combustion characteristics of the revised engines also contributing to fuel efficiency improvements of seven to ten per cent over comparable earlier XD models equipped with the cast iron head engines.

[7] The combination of lightweight components and improved engine design enabled the Falcon to deliver fuel economy comparable to that of the smaller Holden Commodore, an advantage that Ford exploited in its marketing.

[8] Fuel injection had been considered for the XD but was ruled out on grounds of cost,[5] eventually debuting in the successor XE Falcon.

The exterior also featured the Marchal fog lights from the ESP and 14-inch "Volante" style alloy wheels made by Globe.

He set up an aftermarket body styling company with Bob McWilliam, but remained a silent partner to avoid conflicts with Ford management.

Draper then designed an aero kit and tested scale models of an XD Falcon in Ford's wind tunnel.

[21][22] Johnson and co-driver John French also won the 1981 James Hardie 1000 driving an XD[23] when race was stopped after a multi-car accident on lap 121 of 163.

[26][27] Allan Moffat also raced an XD Falcon in the 1980 Bathurst 1000 when delays in approval of his Mazda RX-7 meant he would have to wait until the following season in 1981.

Ford Australia had announced that they would not be taking part in racing due to a disagreement with CAMS over homologating the XD, which left AMR with no program and budget.