The Budd Company of Detroit had long assisted carmakers building new designs, and for 1962 developed a new sort of sporty car they thought could create a new market for younger buyers. Sadly, AMC decided to turn down the new car design that could have become AMC’s own Mustang two years before the 1964 Ford cars, which sold 600,000 units in the first 12 months, or nearly twice as many cars as AMC was producing.

While the Ford Mustang was built using many components from their wildly popular Ford Falcon line, which reduced both production time and costs by using many existing components, the 1962 Budd XR-400 borrowed the AMC Ambassador platform for parts, which would save AMC a lot of production money. However, a number of fateful decisions over at AMC led to the stylish new car never being brought into production. As AMC CEO George Romney was exiting the company to run for Michigan governor, incoming CEO Roy Abernathy decided to part from the successful Romney strategy of producing smaller well selling economy cars. Abernathy wanted to grow many of the AMC cars into competing with the big three in all markets, despite limited production funds for the small car maker to develop these cars. The new car didn’t yet have an existing market, giving Ford a clear shot becoming the first pony car and dominating 100% of the new market two years later.

Another big drawback was that the Budd design was a true 2+2 design with only very limited back seat room, or very close to a two seater. Instead of AMC designers working to improve rear seating to make the new design more practical, AMC designers didn’t seem to be able to see past this shortcoming, which only helped to end serious consideration of the new car. And, by 1975, AMC recognized that competing with all the other car lines of the big three was a mistake, where the luxury car Ambassador and AMC’s later pony car, the Javelin, were both dropped for the 1975 model year as the company once again attempted to concentrate on the smaller car business.

Even more irony took place as well. In 1961, Budd pitched a similar idea to Ford using both Thunderbird and Falcon parts, although Ford had an experimental 1962 Mustang concept car powered by a rear mounted v4 engine. After Ford turned Budd down, Ford actually liked the idea, and Lee Iacocca helped to develop the actual Mustang. In 1997, Ford purchased this one of a kind car and added to the Henry Ford Museum, representing itself as a Mustang forerunner, having the Rambler lettering on the trunk removed, even though it was built of AMC parts.

Perhaps, the failure of AMC not to build the car led to the little car company going out of business and being acquired by Chrysler in 1987, proving to be a fatal business error. 1962-budd-xr400-sports-convertible-61962-AMC-Budd-XR4001963-budd-xr-400-prototype-and-1965-ford-mustang-convertible-front-three-quarters-view1962-budd-xr400-concept-car-09497

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