Outta Sight: Malcolm Bricklin's Visionary Vehicles
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.
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