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Cars are seen as investments, something that a person will always find valuable as long as it’s in working condition. And while cars’ value depreciates every year at a rate of 15% to 30%, it still remains something of worth to the owner. The same isn’t always the case for carmakers or manufacturers.
Sometimes, for one reason or another, a car brand will fail and eventually have to close its doors. In these cases, the cars they made just didn’t bring in money the way the manufacturers hoped, and they had to stop making them.
In this article, we look at carmakers that had to eventually close up shop because their cars simply didn’t sell well enough to keep operations going. It’s tragic, but also interesting to see that even something like car manufacturing isn’t guaranteed in today’s world.
Pontiac
The Pontiac was supposed to be the cheaper alternative to more expensive luxury cars. The company opened its doors in 1926 with bright dreams and aspirations but had to close down in 2010.
At first, things went well, and the leaders of the company – including John DeLorean – took Pontiac to great heights. The company’s cars were fast and exciting and seen as perfect road and muscle cars.
However, safety concerns and fuel shortages became too big of an obstacle and Pontiac’s reputation suffered badly in the 1970s and 1980s. Slowly but surely, the company became a failure and this downfall led to GM’s Chapter 11 reorganization in 2008.
Plymouth
Plymouth needs no introduction, everyone has somewhere heard of or seen one of this company’s cars. Similar to Pontiac, Plymouth was introduced to the world by Chrysler as a more affordable alternative. Chrysler’s cars are known for their luxury and price, and Plymouth offered people the chance to own something similar at a lower price.
Things started really well at first back in the 1950s and 1960s, but the company’s reputation was damaged in the 1990s by what is called ‘badge-engineering’. This means Plymouth put their label on Chrysler products. As a result, the company lost the respect of car buyers and, in 2001, they had to close their doors for good.
DeLorean
Who doesn’t know of the DMC DeLorean that took Marty McFly on the adventure of a lifetime? Although this movie isn’t the only reason the company was popular, people loved the idea of owning a DeLorean.
John DeLorean, the man behind the company, was admired for designing striking cars like the GTO. He was the youngest GM executive in history, and many looked up to him and his cars.
The company was started with the help of several Hollywood stars as well as the British government, and the car manufacturing plant was opened in Northern Ireland.
Sadly, the first car models manufactured, the DMC-12, proved to be victims of poor quality control and testing. The design, features, and cost of the car received mixed reactions in the United States.
As a result, the company found it challenging to break even, and eventually got involved in a big scandal. In 1982, DeLorean was caught in an FBI sting operation, after which he was accused of drug trafficking. Although he was acquitted of the charges, DeLorean’s reputation was ruined.
While the company’s cars have a cult following, the company didn’t do well enough to justify continuing to operate. There is a bright side, though, as a new company – DeLorean Motor Company – opened in 2016. The company promises to build new DMC-12 cars in the future and give fans what they want.
Hummer
Back in 1990, GM bought a line of cars from AM General. The plan was to build and distribute military Humvee vehicles that civilians can own. After all, driving a Humvee is pretty badass, right? The contract for the production of these gigantic vehicles stood at $1.2 billion and was apparently backed by Arnold Schwarzenegger.
Unfortunately for those behind these plans, the timing was off. People had become more concerned about the environment, safety, and fuel economy. As a result, there was just no hope of actually making these vehicles as popular as hoped. Hummer had to close its doors in 2010.
Studebaker
The history of the Studebaker car is quite interesting. The family behind this now-defunct company is German and were actually blacksmiths. The Studebakers started a wagon and carriage business in the 1800s and went on to the market an automobile in 1912.
The company quickly gained a reputation for providing people with high-quality products that are reliable. However, things weren’t as good behind the scenes. There were managerial issues, but the company managed to get through the Great Depression without closing its doors.
Studebaker continued to produce innovative car designs during the 1940s and even influenced other car manufacturers for decades. Sadly, price wars between Ford and GM nearly had the company on its knees in 1953. It worked hard and could cling to life for 13 more years, but eventually, things came to a halt and the company closed its doors for good.
Packard
Yet another company that wanted to produce luxury car models, Packard, came into the market at the break of the 1800s. Their models were very expensive, costing up to four times more than the comparative Oldsmobile.
Despite this, the company managed to survive the Great Depression. However, when they decided to introduce mid-priced vehicles, things took a turn south. Packard was unable to compete with other companies also selling mid-priced cars.
Mercury
A common theme with these car manufacturers is that they all tried to sell upscale and luxury vehicles at more affordable prices. Mercury’s aim was to sell affordable vehicles that fell between the luxurious Lincoln line and the cheaper Ford models.
From 1940 onward, the manufacturer’s sales began to dwindle, so Mercury and Lincoln merged. Although Mercury’s Grand Marquis and Marquis models remained highly popular until the 2000s, the company’s demographic was just too narrow. As such, it couldn’t stay standing and halted production in 2011.
Saturn
This company, which referred to itself as a ‘new kind of car company’, opened its doors in 1985 in Spring Hill, Tennessee. It operated separately from GM with a unique arrangement and was a private and employee-owned business.
Saturn’s cars managed to sell well, but just couldn’t cut it and make it to the big leagues. Other manufacturers apparently didn’t like Saturn’s status as it was free from GM’s divisions. Sadly, in 2004, Saturn’s arrangement was dissolved.
It was this dissolvent that led to the company’s downfall. When GM started closing divisions in 2010, Saturn was one of the unlucky ones.
Oldsmobile
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Oldsmobile was independent right from the start when it began manufacturing vehicles in 1897. However, in 1908, it was purchased by GM. The company’s Rocket V8 engine made it very popular and it gained a good reputation for making vehicles with speed and impressive power. Oldsmobile became known as an adventurous brand from the 1950s to the 1970s.
Unfortunately, by the 1990s, the company’s performance image had started to suffer and fade. Apparently, it was rebadging that broke the camel’s back and it stopped manufacturing in 2004.
American Motors Corporation (AMC) (1954-1988)
AMC came to be after a merger between Nash-Kelvinator Corporation and Hudson Motor Company all the way back in the 1950s. It was considered the biggest corporate merger in American history back then.
The company started to focus on fuel-efficient cars after the merger, which was a unique and rather bold decision. However, this leap of faith paid off for the company in the 1960s.
Jeeps made by the company became what kept the company running in the 1970s, while the rest of its vehicles didn’t receive much love from car buyers. Eventually, Chrysler bought the company in the 1980s and got its hands on the Jeep line, which continues to be quite profitable.
Final Thoughts
Manufacturing cars isn’t an easy task – a lot of planning and work goes into making cars that actually work and are safe. As these companies have shown, even the best-designed cars won’t keep a car manufacturer afloat. There is a lot more going on behind the scenes and on the market that influences the success of a company. With this knowledge in hand, it’s much easier to appreciate and admire companies like BMW and Ford that are still going strong!
Sources:
TitleMax: Defunct Car Brands
Auto Pedigree: Used Car Guide