DeLorean, or the DeLorean Motor Company, was an American manufacturer of automobiles founded in 1975 by John DeLorean. By 1981 it failed to meet its sales targets, and yet by the mid-80s it became a cult through the movie trilogy Back To The Future. DeLorean failed as it suffered from quality control issues owing to a foreign and unskilled workforce. DeLorean Motor Company was purchased by DeLorean enthusiast Stephen Wynne in 1995.
| Event | Description |
|---|---|
| Founding of DeLorean Motor Company | The DeLorean Motor Company (DMC) was founded by John DeLorean, a former General Motors executive, in 1975. The company aimed to produce a distinctive sports car that would stand out in the market. |
| Introduction of the DeLorean DMC-12 | The iconic DeLorean DMC-12, known for its stainless steel exterior and gull-wing doors, was introduced in 1981. The car gained fame and recognition due to its futuristic design and unique features, partially helped by its prominent role in the “Back to the Future” film trilogy. |
| Financial Challenges and Production Issues | DMC faced several challenges during its operations. The production of the DMC-12 was plagued by quality control issues, and the car was often criticized for its underwhelming performance. Additionally, the company faced difficulties in meeting production targets and managing costs. |
| Investment from the UK Government | In an effort to save the struggling company, John DeLorean secured a significant investment from the British government in 1981. The government provided financial assistance to DMC’s manufacturing facility in Dunmurry, Northern Ireland. |
| Legal Troubles and Drug Arrest | In 1982, John DeLorean was arrested and charged with drug trafficking. He was accused of attempting to finance his struggling car company by participating in a drug deal. DeLorean’s arrest and legal troubles further damaged the company’s reputation. |
| Bankruptcy and Closure | Despite the government investment, DMC continued to face financial troubles. In 1982, the company filed for bankruptcy, and its manufacturing facility in Northern Ireland was closed. Production of the DMC-12 ceased, and the company’s assets were liquidated. |
| Legacy and Pop Culture Icon | The DeLorean DMC-12 achieved cult status and remains an iconic symbol of 1980s pop culture. It became immortalized as the time machine in the “Back to the Future” film series. The car’s unique design and association with the films contributed to its enduring popularity among collectors and enthusiasts. |
| Attempts to Revive the Brand | Over the years, there have been various attempts to revive the DeLorean brand and produce new versions of the DMC-12. These efforts have included proposals to create electric versions of the car, but none have resulted in full-scale production. |
| Ownership and Replicas | The rights to the DeLorean name and design have changed hands multiple times. Several companies have produced replica versions of the DMC-12, often with modern engines and features. These replicas aim to capture the nostalgia associated with the original car. |
| Legal Disputes and Authenticity | Legal disputes have arisen over the use of the DeLorean name and design. Some companies have faced challenges related to copyright and trademark issues when producing replicas. Authenticity and restoration of original DMC-12 vehicles are also important considerations for collectors. |
Background
DeLorean, or the DeLorean Motor Company, was an American manufacturer of automobiles founded in 1975 by John DeLorean.
While working as a division head at General Motors, DeLorean felt the time was right to start a new company and revolutionize the stale automobile industry.
He designed a futuristic sports car –the DeLorean DMC-12 – with gull-wing doors and a stainless steel exterior.
The car went into production in 1981 but failed to meet sales targets for various reasons. Less than two years later, DeLorean Motor Company went bankrupt with only 9,000 units ever made.
The interesting paradox is that nonetheless the car commercial failure, it became a cult through the movie trilogy Back To The Future, also thanks to its futuristic look:
At first glance, DeLorean’s demise seems obvious. The company failed because it couldn’t sell enough cars to remain viable.
In reality, the story is rather multifaceted. Let’s tell it below.
Poor production quality
The first batch of cars to roll off the production line was plagued with problems. Assembly line workers were unskilled which led to quality control issues.
Given DeLorean’s desire to put a fast engine in a small car, the industry was also critical of the DMC-12’s lack of power. There were related concerns over poor fuel efficiency and average handling, two characteristics John DeLorean had initially preached as vital to a good car.
Poor business model
DeLorean originally had plans to manufacture his cars in Puerto Rico. However, the company received a better offer from the British government to build them in Northern Ireland.
Although DeLorean received approximately $120 million in grants, there was a three-week delay in shipping cars across the Atlantic.
The currency exchange rate between the two countries was also unfavorable and impacted profitability.
Company insiders would later acknowledge that DeLorean knew it was going to run out of money on the first day of production.
As a result, it became reliant on the British government and private investment to remain in operation.
The price of a DeLorean given its lack of pedigree and production quality was also high. Initially, they were offered for sale at $25,000, over 50% more expensive than the better equipped Chevrolet Corvette of the time.
Bankruptcy
In late 1982, DeLorean was under immense pressure to remain in business. In October of that year, John DeLorean was sensationally arrested in a sting operation conducted by the FBI.
The filmed sting showed DeLorean agreeing to bankroll a fake cocaine smuggling operation to keep the business afloat. The founder was later acquitted on grounds of entrapment, but the company was insolvent and declared bankruptcy one week after he was arrested.
Manufacturing continued until 1983. An Ohio-based company acquired the remaining cars and sold them for $21,000 each.
Potential revival
The DeLorean Motor Company has been owned by CEO Stephen Wynne since 1995. From his Texas workshop, Wynne restores old DeLoreans with the more than 4 million spare parts he received after taking over the company.
In 2019, Wynne suggested he might make a modern SUV or electric-based DeLorean to take advantage of the company’s rejuvenated brand equity.
Key takeaways:
- DeLorean was an American automobile manufacturer founded by John DeLorean. The flagship DMC-12 was in production for less than two years before the company filed for bankruptcy.
- DeLorean suffered from quality control issues owing to a foreign and unskilled workforce. Its decision to manufacture cars in Northern Ireland also meant its business strategy was not sustainable.
- DeLorean Motor Company was purchased by DeLorean enthusiast Stephen Wynne in 1995. There are tentative plans to make a new model from the millions of parts he inherited from unassembled DMC-12s.
Quick Timeline
- DeLorean, or the DeLorean Motor Company, was an American automobile manufacturer founded by John DeLorean in 1975. It produced the iconic DeLorean DMC-12, known for its gull-wing doors and stainless steel exterior.
- The company faced various challenges, including poor production quality due to unskilled workers, lack of power and fuel efficiency in its cars, and a high price compared to competitors.
- DeLorean Motor Company’s business model also suffered due to manufacturing in Northern Ireland, delayed shipments, unfavorable currency exchange rates, and reliance on government grants and private investment to stay afloat.
- In late 1982, the company faced a financial crisis, and John DeLorean was arrested in a sting operation for attempting to fund a fake cocaine smuggling operation. The company declared bankruptcy shortly after.
- The DeLorean Motor Company was later acquired by Stephen Wynne in 1995, who restores old DeLoreans with spare parts and suggested plans for a potential revival, including a modern SUV or electric-based DeLorean to capitalize on the brand’s equity.
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