The company was formed on January 14, 1954, as a result of the merger of two small automakers, Nash-Kelvinator Corporation and Hudson Motor Car Company. At that time, it was the largest merger of companies in the United States.

Under the leadership of George W. Mason, AMC focused on the production of compact subcompact cars, competing with the “Big Detroit Three” (General Motors, Ford and Chrysler). The first such car was the Rambler, which later became the third most popular car in the United States.

In the 1960s, the company, led by Roy Abernathy, unexpectedly changed its direction and began producing large cars. This strategy turned out to be extremely unsuccessful, and after receiving significant losses, the company returned to the production of subcompacts.

In the late 1960s – early 1970s, American Motors produced the Javelin and AMX sports models. In 1970, AMC acquired Kaiser Jeep (an SUV manufacturer) as a complement to its existing business-class cars.

In 1987, American Motors was acquired by Chrysler and ceased to exist, but contributed greatly to the revival of this brand.