Germany was first, followed by France, England and Italy. Japan arrived a few years later, with Korea trailing by several decades. Since 1949, foreign car makers have mounted assaults on America’s automotive market. A few have flourished, others have had moderate success, but many have retreated after failing to establish a beachhead. And now another wave is forming, threatening to storm our shores. Entrepreneur Malcolm Bricklin is leading the charge, establishing Visionary Vehicles LLC to import a line of “aggressively priced, beautifully styled, high-quality vehicles” built in China. Are we about to witness the next automotive revolution, or are we being asked to buy the Bricklin bridge?
Malcolm Bricklin has a, uh, "colorful" business background. When he was in his 20’s, Bricklin built his father’s building supply into a chain of stores. When the company became embroiled in lawsuits, Malcolm took his millions and left– just before the company went bankrupt. Bricklin’s next business venture: selling motor scooters built by Fuji Heavy Industries. After he realized Fuji’s Subaru 360 automobile was so light it could slip under the government’s safety regulations, he formed Subaru of America to import the tiny car.
Sales went fairly well until Consumer Reports named the 360 “the most dangerous car in the United States.” Sales plummeted and Bricklin bailed out of the business. But not before securing a thousand 360s in an attempt to establish a private race series (no really). Not long afterwards his financial backer sued Bricklin for misappropriation of funds. Bricklin moved on to his next– and arguably most infamous– project: the Bricklin SV-1.
Bricklin’s automotive namesake created a high price sports car clad in an acrylic plastic shell. The SV-1’s gullwing doors– its most distinctive feature– weighed almost 100 pounds apiece. The electro-pneumatic system controlling their operation was so failure prone Bricklin’s boffins had to design a way to exit the “Safety Vehicle 1” via the cargo hatch. To help Bricklin and his investors finance this venture, the entrepreneur convinced the province of New Brunswick, Canada to provide a $2.88m loan guarantee (in exchange for Bricklin’s production facility). Bricklin sold 200 dealership franchises and produced 2854 plastic fantastics. In 1975, the company went into receivership, leaving the citizens of New Brunswick with $23m in accumulated debt.
Ten years later, Bricklin resurfaced on the automotive scene, importing the Yugoslovian-built Zastava Koral under the name Yugo. By 1988, Yugo America was in financial trouble. Bricklin sold his share to Zastava for more than $15m. In 1992, after selling 120,000 cars, Zastava withdrew from the US market. A year later, Bricklin partnered with none other than Lee Iacocca to found the Electric Bicycle Co. The company sold expensive battery-powered bicycles through automobile dealers. In 1995, Electric Bicycle went bankrupt. Which brings us to Bricklin’s latest undertaker– I mean, undertaking.
After briefly considering bringing Zastavas back under a different name, Bricklin journeyed to Wuhu, China looking for a source of bargain-basement vehicles. Finding a willing partner in Chery, Bricklin started making plans to "redefine the price of luxury" by importing an inexpensive line of high-content vehicles into the US market. The company is a joint venture: a 60 – 40 split between Chery (i.e. the Chinese government) and Visionary Vehicles. Bricklin’s deal insulates him from competition; Chinese government regulations restrict American manufacturers operating in China (e.g. GM) from building cars for export. For now…
Bricklin’s plans call for importing a quarter-million units beginning in 2007. His business plan also estimates 100% growth per year for the first several years. If all goes according to plan (hardly a given), Chery’s first export into the American market will be a “BMW 3-Series/5-Series challenger for about $19k,” followed by a two-seat roadster for $15K and a “BMW 6-Series fighter at around $25k.” No less than twenty models are planned for the future, including a hybrid, an AWD sedan and a crossover.
Like many of Bricklin’s other ideas, Visionary Vehicles has hit a few “snags.” Thanks in part to a $2m franchise fee, the company has signed up only 20 percent of the desired 250 dealers. Chery has rescheduled its US launch to late 2008 or early 2009, while Malcolm looks for alternative sources of adventure capital.
There are many unanswered questions surrounding this venture. If Bricklin doesn’t secure 250 dealers, can he proceed? Can he succeed? What effects will recent talks between DCX and Chery re: building a cut price Chrysler or Dodge for the US market have on Visionary’s “exclusivity?” The biggest question is, of course, whether American car buyers will want Bricklin’s automobiles. Undercutting established econoboxes like the Toyota’s Yaris ($11,050) will take some doing. Despite all the talk about BMW's, will Bricklin's Chinese vehicles come with same cheap and not so cheerful stigma that killed Yugo's ambitions? Can Bricklin finally build a viable business? It’s too early to say, but I wouldn’t bet on it.
I was driving one of Bricklin’s little Subarus around a private test track near Philadelphia when the news of my ski buddy, Jim Clark’s premature death was announced. I got out of the car and never looked back. I did the absolutely correct thing for the wrong reasons, but you should all continue to vote with your feet where Bricklin is concerned.
Bricklin’s never been anything but a con man. Anyone who hands him a $2MM “franchise fee” is an idiot and deserving of whatever they get.
The offset crash test results of the Chery QQ (Daewoo Matiz ripoff) and also the Jianling Landwind (licensed 1st gen Isuzu Amigo) are scary, to put it nicely. Bricklin’s going to have to show that he’s no longer commited to importing deathtraps to get the show on the road.
http://paultan.org/archives/2006/02/18/chery-qq-crash-test/
http://paultan.org/archives/2005/09/30/jiangling-landwind-x6-gets-zero-in-crash-test/
Does anyone else recall 1999 when Daewoo USA tried a “different” (VERY different) means of marketing cars in the United States initially? They soon gave up trying to have college students be salespersons/demonstrators, and established a properly franchised dealer network (not asking millions up front, I’m pretty sure, either).
After getting a grip on rational marketing methods for the USA, Daewoo was doing reasonably well and ready to import their tall-station wagon, the Tacuma (styled in Italy, as most of their cars were).
The Tacuma was a Matrix/Vibe sized car and would have been competition for Mazda 5. Then, GM, Suzuki and SAIC purchased most of Daewoo and yanked the rug from under Daewoo USA, refusing to sell them any vehicles or even spare parts. Daewoo also had upgraded versions of their cars in the wings, which ended up being sold as the Chevrolet Aveo (plus Optra and Epica in Canada), the Suzuki Reno, Forenza and Verona.
Not forgetting that Daewoo had a very high-profile corporate head (now in jail after doing a runner for a few years) who took many many chances and was brought low from two factors – greed and the 1997 Asian financial crisis which crippled one of the fastest growing car companies on earth – yes, Daewoo. (It had “planted” a high number of joint ventures and car factories world-wide in markets which have subsequently proved their thinking correct). Much of Daewoo was bought for pennies on the dollar, one of the best investments GM has made recently in fact.
I think when a start-up car import company has to resort to some kind of gimick such as a “high-profile personality” or selling cars through college students for free “buzz” then the end-result will inevitable.
Also, unfortunately and not to be personally insulting to Mr. Bricklin (who in fact has done well for himself – though many of his prior business venture investors may still have empty pockets) his past experiences in business have not been a success in the sense of making any of his investors money!
Another Chinese auto maker, Geely, may do better in the USA – kind of like the turtle and the hare all over again.
As a native of New Brunswick, my memory goes way back when it comes to being aware of the Bricklin SV-1. Despite the financial penalties we took, there’s a certain odd sense of pride that we were part of creating a car of a certain infamy.
As I recall, the individual owners of the Bricklin SV-1 really love them.
I appreciate the personal stamp you see on cars from such a small builder…they have no cigarette lighter or ashtray, as Bricklin believed it was dangerous to smoke and drive. That’s something you won’t see nowadays, one man’s convictions built right into the vehicle.
“Convictions” being the key word, something he’s probably just barely avoided judging from his eviscerated investors.
I did like the SV-1, AMC engine and all.
Bricklin’s original plans for his dealerships are ususual to say the least:
The Visionary Vehicle ‘stores’, if that’s the accurate term, are unlike anything we’ve seen in the auto industry. Each multi-million dollar facility will be “an entertainment destination†that sells automobiles. Exlcusive dealerships will be located away from other car dealers and preferably away from other commercial development. Customers will make an appointment to come to the store with kids and pets. A valet will wash and park your car. The kids will be entertained and the pets fed while Mom and Pop enjoy an experience designed to resemble a major auto show. Vehicles on display are surrounded by big screen video, laser-like “pins of soundâ€, allowing for audio information focused in one limited space, and a host to guide customers around and answer questions, not to sell a car. An on-site test track is stocked with all models for test drives. Customers can drive as many cars as they like. At a projected 30% below the competition’s price, with quality at or better than said competition, and products that are appealing in all categories, the vehicles will sell themselves, insists Bricklin, meaning no sales staff needed. There will be no haggling over price and dealers will be guaranteed 15%.
Speaking of the dealers, Bricklin is now recruiting 250 of them to put up big bucks to get in on the ground floor. He claims that of the first 6 prospects pitched, 6 wrote checks and got on board. Not only will they get their own store, they’ll own a small piece of all the other stores and even get part ownership in the Chinese factory. And, since there will be few Visionary Vehicle locations – meaning large protected territories for dealers – customers will have the option of having their cars serviced at independent local shops chosen by the dealer. The dealer will get a piece of their action, too.
(From http://www.theautochannel.com/news/2005/03/19/016404.html)
He has backed down from this somewhat, now saying dealers can set up dealerships in vacant showrooms, but he still wants his showrooms separate from any other manufacturers’.
Okay, I’m not a math whiz, in fact I barely passed algebra, but how does Bricklin plan to pay for all the luxurious goodies that Frank described above, and still make a profit? That must be some hellacious markup he’s planning on getting, which means that the competition should have an easy time undercutting him.
Besides which, price is only part of the equation when it comes to cars. Cars are a LTR, not a one-night-stand. A customer needs to have confidence that the company is going to be around for a while before they’ll lay down the long green, even at a discount price. Seems to me the right way to do this is to either piggyback onto a bigger company, using their already established dealer network, or else start small and humble and build a solid reputation before expanding.
One other factor. Toyota, although they don’t lose money on the Yaris, are happy to not make MUCH money because it gives them CAFE-padding for LS480s. Thus consider this a $500 subsidy on the Yaris.
(Honda, on the other hand, LOVES CAFE, and would love to see it raised still further. But they are just about the only major automaker who doesn’t have a single V8!)
Chery? Geely? Huh? Those Chicomms certainly have a way with words. Now if Geely could just get a product placement in Ben and J Lo’s sequel to “Gigli”…
It’s amazing that Bricklin keeps coming back after wiping so many bankrupcy, never going broke himself and always find savvy investors (suckers) to give him more money.
A lot of his claims are dubious. Some statements show a lack of business wit (or a very disingenuous mind). In any case: run the other way. You don’t compete with a BMW 6 series with a $25,000 car. Because if your car was just as good, you could charge for just as much. Otherwise you’re competing with a Camry. It’s called: the market. BMWs are not made of more expensive metal or more refined plastics, yet, they cost more. They cost more because people are willing to pay more.
Plus there’s the thorny issue of intellectual property. As long as Chery is manufacturing in China for the Chinese market, they are untouchables – China not being totally openmarket nor WTO friendly. Once they touch the US soil, it’s a different set of rules. The few cars that I saw under the Chery flag has “derivative” styling. That is, an Infiniti copy, a maxima copy, a CRV copy. And that probably is the tip of the iceberg. I wonder how much content under the hood is “original”. Reverse-engineering is probably alot cheeper than engineering.
Add safety, regulation, emissions, import issues and no wonder it’s been delayed till ’08 or ’09.
Please stop holding your breath.
I thought the work done to bring Subaru to the US was Bricklin’s shining moment. Thanks for setting me straight, Frank.
If China’s gonna be a automotive player in the States, its not gonna be with Bricklin’s help. But I must admit I like the SV-1, wedge style and easily-tuned Ford small-block power…
1974 Bricklin SV-1 gullwing cars ran AMC (American Motors) 360 cubic inch V8’s with a four barrel carburetor, 1975 Bricklin SV-1 gullwing cars had Ford 351 cubic inch (Windsor) V8’s with a two barrel carburetor and a catalytic convertor. As mentioned, these cars were built in New Brunswick, Canada.
Volvo built (assembled) cars for Canada (and even sold some in the US) in Halifax, Nova Scotia from the early 1960’s until the 1999 acquisition by Ford. By far the most satisfactory maritimes automotive assembly operation and the longest lasting.
CMI built (assembled) Toyota and Isuzu cars for Canada in Sydney, Nova Scotia in the late 1960’s.
Renaults and Peugeots were (natch!) assembled in a Quebec assembly plant in the late 1960’s.
Finally, Hyundai built Hyundai Sonata cars from about 1997 for a few years in a Quebec plant until they apparently discovered that the Quebecois are “allergic” to work, and thus pulled out the plant. They’ve recently placed a US plant in operation, having done their homework a lot better this time.
I wonder if the Chinese car companies would succeed IF they did not import built-up cars, but imported kit components and assembled the cars here? Would people pay 25% less than “normal” market pricing for a comparable car, say, instead of 30% less, if they knew it was providing a few thousand jobs in the US?
Maybe not, upon reflection of the hoards of people buying cheap Chinese stuff every day in our country at Wal-Mart, Sam’s Club and all manner of other stores (don’t point fingers at Wal-Mart until you check through your own home and see where at least 25% of your “stuff” bought in the past few years was made – it’ll be China, guaranteed – the original “price point” and brand names scarcely matter).
If you want to read an insightful book on Subaru, their advertising, and how they got to where they are now, pick up a copy of “Where the Suckers Moon.” It focuses on Wieden & Kennedy – the ad agency that fought for – and won – the Subaru account. It covers the early (Bricklin) years, too.
The June 12, ’06 Automotive News has George Soros poised to spend US $ 200m in “a joint venture with…Chery…to distribute them in the United States”, with the big question being will he elbow Bricklin aside ?
Chery here has a problem. A Ford/Chevy type problem. What they have is a Mitsubishi Eclipse clone.
http://www.vvcars.com/importer.php?page=product
The questions are:
What does this car do for me and why would I want one?
Is it cheap? That only matters if I want it. I can buy a brand new, 0 mile Chrysler PT Cruiser for $9988. Does that alone make me want it? No, it’s just not enough on it’s own.
Is this China car fast? Because if it’s slow, then I don’t want it.
If this car is slow, does it get good gas mileage? Because if it only gets 20 or 30 miles per gallon, the vehicles I already have do that and the market is full of vehicles that get that so what makes this particular China car special?
This car is going to have to offer something or everything that nothing else does.
Cheap and fast? That would sell.
Cheap and gets really good mileage. That might sell OK(about as good as Hyundai’s and KIA’s sell).
Now if this car was really fast, and it was electric(X1, Tesla, etc,), and it was cheap, then it would sell…
But if it’s just a run of the mill 4 banger with about 150hp, and gets about 30mpg, and costs $16k+; then it’s not even worth the boat ride over here.
But, would I buy this car to commute to work in if it was $4,000 brand new… Hmmm.. I just might..
A brand new car for $4000? That sound’s pretty good actually. If it’s cheap enough, then it will sell well. Price alone could sell these cars, but it would have to be really, really cheap considering the $9988 PT Cruiser is just not cheap enough to motivate one to run out and buy one on price alone.
If the Chery’s are anything like the Geely’s they will likely make the ’80’s Hyundais look well built & reliable. The pics & info I’ve seen on the Geely make it obvious that their quality is probably only marginally better than the Yugo. At least the Yugo name badge was stuck on straight. Some people will buy a car strictly based on price, but most require a quality vehicle at any price.
It looks decent enough..
http://auto.geely.com/product.do?method=list&sort=33
Aaargh, their website is maddening! If I hear “I’m a caw guy” one more time…I mean, do I really need poorly matted, greenscreened, rich white male Flash foofaraw to sell me a car? No, I need simple photos, specs, and the assurance that my “value-priced” Eclipse clone won’t kill me before its craptacular fit, finish, and operation drive me to do it myself.
Hey, it’d be great to have another inexpensive automotive alternative, but this guy’s history speaks volumes. Caveat, uh, drivor.
A guy in my dad’s neighborhood owns an orange Bricklin SV-1 with a Chevy LT1 engine swap that he loves. He had to replace the gullwing opening mechanism with his own fabricated design to make it more reliable. Say what you want about it, it is a very rare and interesting car that I’m sure gets lots of looks. I need to get some pictures of it sometime.
If Bricklin is involved, I’m running the other way. However I wouldn’t dismiss the Chinese. I remember a time when Americans pointed and giggled at the curious little cars that were coming over from a foreign land called Japan….
A career journalist is the VP of Product Development? I guess it kind of has a precedent. After all, William Clay Ford hired Matt Millen to run his football team after watching his insightful journalistic analysis for a couple of seasons.
I wouldn’t mind owning a SV-1 Bricklin – as a second or third car – just because of its historic significance. Back in the mid-Seventies, C/D did a two-car comparo between the anemically powered ’75 Corvette and a Bricklin (by then, as I recall, the engine wasn’t an AMC 360 cid V8, but a Ford 351). Things back then, were that bad.
But to my mind, the best place for the SV-1 is a museum, not a roadway. I can still recall a letter-to-the-editor around that time (again in C/D) from some poor Bricklin owner who had bought his through a Ford dealer. The gullwing doors leaked so much, then finally gave up, and according to what was written, simply drilled holes in the floorpan of the interior, so the water could just run out.
Given that, and all the other tales of failure, I know that if Bricklin came to me, and I was an auto dealer, I would laugh in his face. Yes, I read the interview with Mr. Bricklin in Motor Trend, about this time last year, as I recall. I am sure many readers of this site did too. It was a good interview, so good it almost made me believe this conman was speaking the truth. But then, good conmen have that gift don’t they?
Minor correction to last post: last sentence of the second paragraph should read “they finally gave up…”
Bricklin is a true piece of work. And a man to be avoided every bit as much as a mult-level-marketing weenie.
But as for China… they WILL become a major factor in the auto biz. It’ll take some time, but they understand the value of taking the long view. They’ll begin with deals with some established players to get into the market and learn how it works. Then they’ll copy some designs and put forth their own brands.
They won’t be competing with BMW or Porsche or any of the premium stuff anytime soon, but they know there is a market for cars priced like Kias and Hyundais. And as those companies move up market China will be on hand to replace them. I can see China selling basic entry-level cars for under $9K and Camry-like appliances for maybe $12K. The things may (or may not) be made of recycled Tsingtao beer cans, but people will buy them.
Just to close the loop on this, from today’s Detroit News:
Visionary Vehicles ends its venture with Chery
Malcolm Bricklin’s plan to be the first U.S. importer of Chinese autos hit a snag as his Visionary Vehicles LLC said it ended a joint venture with the company that was to build the vehicles.
Bricklin, 67, began meeting other Chinese automakers during last week’s Beijing Auto Show after deciding against an exclusive relationship with Chery Automobile Co., Visionary spokeswoman Wendi Tush said Wednesday. Chery may still assemble some cars for New York-based Visionary on a contract basis, she said.