By the time that the mid-1970s rolled around, America's muscle car heyday was already a memory. While the Clean Air Act — passed in 1970 – was one reason for the decline in powerful American cars, the straw that broke the camel's back was the 1973 oil crisis, which caused mass fuel shortages and price spikes throughout the country — not a great time to own a heavy, gas-guzzling V8 muscle car. In 1970, Pontiac was General Motors' performance brand, using the slogan "We take the fun of driving seriously" to hammer the point home.
However, with the muscle car formula dying — a segment that Pontiac is credited for inventing with the legendary GTO in 1964 — GM's sport-oriented division needed to pivot to a different idea. Pontiac initially attempted to appeal to the luxury market in 1969 with the Grand Prix, which sold well, but Pontiac saw an opportunity for a bit of experimentation. They figured that if they took the luxury elements from the Grand Prix and mashed them with sporty elements from the Trans Am, they'd have a model for a large but unexplored market.
That model became the Grand Am. The Grand Am's first and second generations are the only ones that truly followed that recipe. From 1973 to 1980, the Grand Am had varying levels of success merging the luxury and sports segments with moderate to poor sales figures over the years.
In 1985, the Grand Am was completely rebranded into a front-wheel-drive compact, and it remained as such for the remainder of its third.