Here's the story:
Illustrated Corvette Series No. 3 - 1955 Corvette

It was actually because of Ford that the Corvette survived! According to Zora Arkus-Duntov, "There were conversations in the hallways of GM about the Corvette being dropped. Then the Thunderbird came out, and all of a sudden GM was keeping the Corvette. I think that Ford had brought out the competitive spirit in Ed Cole."

Indeed, the '55 Corvette was on the slippery slope to oblivion. From a financial standpoint, there was no reason to keep the Corvette since it was losing money. Sales for the 1955 model were only 674 units, while Ford had sold 16,155 Thunderbirds! It wasn't that the Corvette was a bad car, it just got off to a poor start and never generated enough excitement to get buyers to part with their cash. In fact, the 1955 Corvette featured huge improvements.

The most exciting one was the replacement of the boring Blue Flame Six with Chevy's all-new small-block 265 V8. The Corvette version ran a special camshaft that raised horsepower to 195 bhp. The new engine bumped the 0-60-mph performance up to 8.5 seconds and the quarter-mile time to 16.5. Top speed was close to 120 mph. The new, lighter engine also got better gas mileage, some 2-3 mpg better than the Six.

Unfortunately, the biggest sports car no-no was still with the '55, the Powerglide automatic transmission. Only a few cars at the end of the production run were made with a close-ratio three-speed gearbox. But too late for magazine tests. Road & Track took a chill to the Corvette, stating, "The Corvette comes close to being a really interesting, worthwhile, and genuine sports car, yet misses the mark almost entirely."

Fortunately, the right people in GM had fire in the belly and weren't ready to give up on the Corvette. The 1956 Corvette would shake off all the limitations of the Motorama show car and begin the process of making the Corvette America's only true sports car. There were even plans for racing. Things were about to get very interesting. - K. Scott Teeters