Although it had been American Motors since the merger of Nash-Kelvinator and Hudson Motor Cars in 1954, they had kept the name on the down low. When those marques were discontinued, they became Rambler and fostered an image as the sensible compact car company. But they were being outdistanced and it was time to shed the dowdy image and become AMC.
The Ambassador was one of the first to shed the Rambler mantle. The car was little changed from the 1965 model and was available in 880 and 990 trim levels. A two-door hardtop was added to the top of the line for $2600 and named the DPL or Diplomat. It was intended to compete with the Chevrolet Caprice, Ford LTD and Plymouth Fury VIP. This was an odd category that I don't fully understand, but it seemed to be taking the personal luxury car persona from coupes like the Thunderbird and extending it to family sedans. It was just a higher, more luxurious equipment level but where the existing niche had usually been a separate line, this just encroached upon the car line above them (Pontiac, Mercury, Dodge). In any case, although the DPL was AMC's halo car, the Ambassador convertible and wagon were priced higher. The move to a longer wheelbase and abandonment of the Rambler nameplate succeeded in adding prestige and sold almost four times as many as the car that shared the Rambler Classic chassis two years earlier.
It's difficult to understand how the Ambassador strategy worked. AMC''s top of the line car was the same size as a 1966 Chevelle but marketed as competition to a Chevrolet BelAir that was thirteen inches longer and five inches wider. Although the Ambassador was five inches longer than the intermediate Rambler Classic, the difference was all ahead of the windshield. The interior was no bigger. The lower-trim full-sized Chevrolet Biscayne was priced at $2536, the top-level Ambassador 990 at $2574 and the BelAir at $2636. The same-sized top-level Chevrolet Chevelle Malibu was $2458 although maybe not as nicely equipped. $100 in 1966 $ equals about $750 in 2016 money. As was said in an earlier write-up, Mercedes-Benz and BMW would cash in on the luxury in a smaller envelope concept, but it would be nearly a decade before that idea panned out.