American automobile industry in the 1950s
In 1954, the smaller American Motors Corporation (AMC) was formed when Hudson merged with Nash-Kelvinator Corporation in a deal worth almost USD $200 million ($1.735 billion in 2013 dollars) the largest corporate merger in U.S. history at that time. Other mergers with smaller independent manufacturers followed. Although AMC was moderately successful it was never sufficiently large to challenge any of the Big Three, and was eventually bought by Chrysler in 1987.
American Motors Corporation
The continuing quest "in the business world's toughest race – the grinding contest against the Big Three automobile makers" also meant annual styling changes requiring large expenditures. American Motors' management total confidence "that the new 1965 models would stem a bothersome decline" actually began falling behind in share of sales. Moreover, a new line of redesigned cars in the full and mid-sized markets was launched in the fall of 1966. The cars won acclaim for their fluid styling, and Abernethy's ideas did work as Ambassador Sales increased significantly. The dated designs of the Rambler Americans, however, hurt its sales which offset gains from Ambassador sales. There were quality control problems with the introduction of the new full-sized cars, as well as persistent rumors of the company's demise because of their precarious cash flow. Consumer Reports negative ratings for AMC's Safety didn't help either.