Mustangs were cheap cars back then. They didn't have some premium as sports cars, they cost less because they had 2 less doors, less interior space, and other than the engine really they were just overall less materials and time to make. They used a bunch of common parts from other Ford cars also of course.

:edit:just looked it up, the list price of a mustang on launch was equivalent to 20k today. Not an expensive car at all