How does a car company fail? They may seem too big to just disappear, but the automotive business can be brutal. Here are some of the more interesting tales of carmaker demise; some you’ve no doubt heard of, others maybe not…
Saab started out as an aircraft company, initially building planes for World War II. After the war, they made non-military passenger planes, and then began making cars in 1949. (That quirky-cool ignition between the seats was a carryover from their plane designs, as was the cockpit-inspired ‘black panel’.)
One of the first Saab dealerships in the US was opened by Kurt Vonnegut, in Massachusetts, before he had gained notoriety as a writer. (That dealership was very short-lived, but the New England market would always be one of Saab’s strongholds in North America.)
Saab was always at the forefront of ergonomics and safety, and they pioneered the first heated seats in the industry in 1972, as well as the first “self-repairing” bumpers (which recovered their shape in impacts up to 5 mph), and then marked another first in 1998 with their Active Head Restraint system.
But Saab had always struggled to be profitable. It was an idiosyncratic and unique brand from the start, which made it polarizing; but its divisive styling and quirks had always commanded a loyal following. In 1990, GM took a 50% stake in Saab Automobile. In 2000, they bought it in its entirety. But GM didn’t understand and failed to preserve the character that differentiated the marque. It also didn’t invest in reinventing Saab as a true luxury brand.
As Saab’s cars became more homogenous—and shared more with GM’s other cars than their own heritage—its loyal following fell away. In 2010, GM sold Saab to Spyker. And in 2012, Saab cars went down with Spyker as the company declared bankruptcy.
The Yugo is often—and with little argument from anyone—referred to as the worst car in history. Csaba Csere, Car and Driver’s technical director at the time, said “It’s obvious to me that the Yugo GV is inferior to every other car sold in America.” It initially (very initially) sold well, because it was cheap—under $4,000 when it came to the US in 1985.
But it sucked. Which became apparent almost immediately. It had a zero to 60 time of 14 seconds, and a maximum speed of 86 mph. It scored miserably in crash tests. It became the butt of late night comedians’ jokes. It never managed to achieve ironic cult classic status (as even the Pacer had managed to do), but somehow remained in production until 1992, when Yugo America went bankrupt for the last time.
With sexy looks, a drug scandal, and a Hollywood turn, DeLorean is without a doubt the coolest failed carmaker.
Its stainless steel body, and gull-wing doors (that’s what we used to call them, kids, before Tesla and its Model X “falcon wing” doors) turned heads when it was launched in 1981.
Unfortunately, under that shiny bodywork, the DMC-12—after it was configured to meet US emissions standards—only had about 140 horsepower. Which could still blow the doors off the Yugo (had the Yugo existed then), but by any other measure it was pretty disappointing.
The DeLorean might have still been able to coast a bit on its unique looks, were it not for a perfect storm of other challenges. Like the fact that the company never met production targets. And the economic recession that coincided with its launch. And the drug trafficking arrest of its eponymous founder, John DeLorean.
The DeLorean Motor Company dissolved into bankruptcy in 1982.
But then, in 1985… it had a starring role alongside Michael J. Fox, as a time machine in the Back to the Future films. That newfound pop culture notoriety (and desirability) came too late to save the original DeLorean enterprise. But it created enough interest to give rise to a second incarnation of sorts.
In 1995, a British Entrepreneur bought the rights to the DeLorean Motor Company name and logo, along with the remaining parts. This new ReLorean (they should have called it that, right? But they stuck with the original name) venture, based in Houston, is making cars from a mix of the old parts and new ones, and adding some updates like GPS. There’s talk of a plan to build truly new DMC-12s—with better suspension, brakes, engine, wheels—which may find the right timing to be successful if it comes to pass.
Fisker Automotive started out in 2011—the same year as Tesla—and took $159 million in federal Department of Energy loan money designated for electric car manufacturers. (Part of a total $1 billion that had been earmarked for Fisker and Tesla.)
Tesla repaid their $465 million part of the loan nine years early, but Fisker did not fare as well.
In November of 2013, Fisker filed for Chapter 11 bankruptcy after some challenges with battery packs (which were produced by an outside vendor, who went bankrupt) that had a tendency to catch on fire, and tremendous losses on each car they produced. (Jalopnik recently figured the per-car loss at $577,000.)
Fisker’s production was short-lived, but there were some high points. Not many Karmas were produced, but many of them were snapped up by a wide range of A-listers. Karma owners included Justin Bieber, Ashton Kutcher, Leonardo DiCaprio, Phil Mickelson, Al Gore, and Colin Powell.
And now, the Fisker Karma is basically back—in an updated package, with a new name: it’s now the Karma Revero. But it looks a lot like the original, and production is ramping back up. The company is also developing three new concepts, and plans to launch an additional model in the next 18 months.
Who’s next? The news is full of automakers’ struggles, and bankruptcy is relatively commonplace in the industry. Ford, GM, and Chrysler have all had major struggles recently. Ford has eliminated almost all of their sedans in the US market, and all three makers are focusing on SUVs and crossovers. Hopefully their ability to adapt their production to market demands will keep them from meeting similar fates to Saab, DeLorean, and others.