Why did AMC fail?

 The failure of AMC's relationship with Renault contributed to the company's demise. When GM discontinued the programme, they were also unable to obtain a rotary engine for the Pacer. Subaru's collaborations have been far healthier and fruitful than AMC's disastrous ones. AMC even collaborated with Levis on a custom-upholstered Gremlin.

AMC Javelin

The downfall of AMC 

Despite all efforts following Romney's resignation, AMC was never a large enough and profitable enough company to compete. In the United States, the late 1960s and early 1970s were defined by the horsepower wars, and AMC created new muscle cars to compete with Mustang, such as the successful Javelin shown above. AMC sold off their Kelvinator Appliance division to fund this, and when the Arab Oil embargo hit in 1973, all hopes of recouping losses vanished.

Prior to that, in 1967, AMC began investing in their own EV programme because the Big Three were already doing so. They attempted to build a "wonderful car" using the first lithium-ion battery, but AMC simply couldn't afford such lavish R&D departments.

The Pacer was introduced in 1975 with the goal of competing in the newly formed compact segment. AMC used their inefficient straight-6 engine as power out of necessity, and the car shared very few components with their other platforms, making it expensive to produce. A net loss of approximately $74 million from 1978 to 1979 compelled AMC to form a partnership with Renault.


The AMC Eagle, which debuted in late 1979, is widely regarded as one of the first true cross-over SUVs. When Renault took over in 1980, they largely ignored the Eagle in order to focus on developing and marketing the compact Alliance, effectively dooming the brand.

Renault was partially owned and run by the French government at the time of the merger. As part of the partnership, AMC was forced to sell off its successful AM General division, further weakening the company. AM General manufactured military vehicles and transit buses, and US policy prohibited foreign governments from participating in US government manufacturing.

The Renault Alliance was named Motor Trend's Car of the Year in 1983. Unfortunately, due to poor distribution, US models were built to lower quality standards than European models, and only two styles were offered to the hungry US market. When gas prices fell in 1985, consumers demanded faster and larger vehicles, and AMC had nothing to offer.

In January 1985, George Beese was appointed CEO of Renault. To cut costs, he fired 21,000 Renault employees and closed two French plants. In a last-ditch attempt to save AMC, he championed the brand back to profitability until his assassination in November 1986. The following year, AMC was sold to Chrysler.