By Warren Brown
Sunday, March 19, 2006
The automotive industry has its characters. One of the most notable is Malcolm Bricklin, an entrepreneur variously identified as the man who brought Subaru and Yugo to America, a dauntless visionary and an impractical dreamer.
Perhaps he's simply a clever person who sees the inevitable and takes advantage of it before it occurs.
That is what he seems to be doing with Chinese cars. They are coming to America, sooner or later, despite any opposition from American car companies, their unions or the politicians who have sworn to protect their collective interests.
It's a version of the Wal-Mart Effect -- the tendency of consumers to ignore nationalism, politics or product origin in pursuit of the best deal. Bricklin understands that motivation, and he sees what he firmly believes is a good deal in the prospective importing of mid-priced cars from Chery Automobile Co., of Wuhu, China, into the United States.
People with money apparently believe that Bricklin is on to something good. He has secured $225 million in initial funding from Atlantic-Pacific Capital Inc., a venture capital company founded in 1995 that has raised, by its own estimate, $21 billion to help start-up businesses.
To put it in perspective, $225 million is not much money in the automobile industry. It barely covers the cost of a modest cosmetic change on an existing line of cars, or a marketing campaign for a new model. It certainly is nowhere near enough money to do everything that has to be done -- safety and emissions compliances being two of the most important items -- to get a little-known foreign car ready for U.S. entry.
But none of that technical stuff is really Bricklin's concern. He is first and foremost a salesman, and his New York-based Visionary Vehicles LLC is primarily a retail operation currently without any known ability to service any cars it might sell.
Bricklin, ever the optimist, sees no obstacle there either. Publicly, at least, he still contends that Visionary can start bringing Chery-made cars to the United States in 2007 -- a formidable undertaking, considering all of the things that have to be done to make that a reality.
Ultimately, Bricklin hopes to have 250 Chery dealerships in the United States with annual sales of 250,000 cars. Early planning has those dealerships doing much of the servicing, using parts sourced from overseas, possibly even stocked by general retail outlets such as Wal-Mart, according to several sources.
Clearly, Bricklin recognizes that 250 dealerships are not enough to service several hundred thousand cars being used all over America. So, he is floating the idea of certifying independent repair shops to handle warranty-covered Chery repair work. That could be an interesting and, perhaps, beneficial development for consumers. But the nation's traditional franchised new-car dealerships, nearly 20,000 of them represented by the National Automobile Dealers Association in McLean, are not likely to be amused.
NADA, for the moment, is keeping mum on the entire Bricklin-China venture, wishing him neither good luck nor ill will. But NADA officials privately concede that they will have to deal with him eventually. "If he is successful, we won't be able to ignore him," one NADA official said at a recent national dealers meeting in Orlando.
Indeed, ignoring Bricklin has never been in any rival's best interest, although the man has had more than his share of spectacular, even laughable flops.
Mention of the Yugoslavian-made Yugo, which Bricklin started bringing into the United States in the early 1980s, still brings chuckles. And eyes roll skyward north of the border when anyone talks about the Bricklin SV-1, a dramatically ill-fated, gull-winged sports car backed by the Canadian government and produced in St. John, New Brunswick, from 1974 to 1976.
Some 2,854 Bricklin SV-1 cars were produced before the Canadian business went bankrupt, owing $23 million.
But there was also Subaru, an automotive subsidiary of Japan's Fuji Heavy Industries, which Bricklin helped to establish in the United States in the late 1960s and early 1970s. Bricklin is no longer a part of Subaru. But the people who were laughing at him back then are not laughing at the highly successful Subaru of America now. It's a contender.