Champion of the Yugo to import Chinese cars

By Published on .

The man who brought the U.S. the Yugo now wants to bring America Chinese cars-and he's dangling to agencies a potential $225 million account. But auto experts are highly skeptical of the entrepreneur's ambitious plan.

Malcolm Bricklin, chairman of Visionary Vehicles, is planning to import five models from China here in 2007 via a deal with China's Chery Automobiles. He expects to sell 250,000 units in the first year, and the plan is to offer high-performance luxury cars comparable to BMW and Lexus but at half the price.

Paul Lambert, president of North American marketing at Visionary, told Advertising Age he'll start a search for a new agency in about three weeks, and he expects to handle the informal review personally, sans a consultant. Mr. Lampert had his own Manhattan agency in the 1980s, which handled Yugo advertising for Mr. Bricklin.


The marketer will consider traditional agencies, event specialists or a combination, he said. "We're going to look at whoever has the next big idea," he said, noting he expects to have a winner sometime in the next six months to handle what he expects to be a $200 million to $225 million ad budget for the U.S. launch. He said a third of the budget will come from dealers.

But Visionary has a long road ahead. At this point, Chery only has vehicle designs; engineering the cars and factory tooling could easily take another two to three years. The cars will have to meet a long list of U.S. safety and emissions standards. No dealers have ponied up to pay between $8 million and $15 million for a dealership, Mr. Lambert said. Visionary, which will own a piece of the dealerships, wants 250 retailers. Also still undecided: what the brand name will be for the five models.

Meantime, China Motor Corp. has signed 25 U.S. dealers for its imported cars from China, which are due this fall, said CEO David Shelburg. China Motor sent informational discs to dealers about their plans before the National Automobile Dealers Association convention in early February, where dealers test drove the cars. One of the dealers said China Motor won't require standalone showrooms, unlike Visionary, and the franchise fee is considerably cheaper than Visionary's.

Mr. Lambert said Visionary's imports will be positioned as sophisticated luxury, offering performance and quality. The venture is benchmarking the industry's top luxury players, including Lexus, BMW and Mercedes-Benz. But the Chinese cars will cost between $20,000 and $30,000, significantly less than the $40,000 to $60,000 models they compete against, Mr. Lambert said.

Evan Hirsh, a VP at consultant Booz Allen Hamilton, said the first-year sales target of 250,000 units is "outrageously high." Plus, Visionary will be playing in "a very tough part of the market" price-wise with unproven products.

John Bulcroft, president of consultant Advisory Group, is skeptical, pointing to Mr. Bricklin's spotty track record. Mr. Bricklin has had a boom-and-bust career. He started Yugo America in 1984. It went bankrupt in early 1989, just months after he sold his share to a Wall Street investment firm and left. Although he and childhood friend, Harvey Lamm, were successful as the first Subaru car importers starting in 1968, Mr. Bricklin left Subaru three years later to make his own gull-wing car. Less than 3,000 Bricklins were built before the assembly line stopped in 1975. His Electric Bicycle Co. went bankrupt in 1997.

In 2002, he announced he would import an inexpensive car from Serbia from the same maker of Yugo. His plan to start selling them in the U.S. in 2003 was never fulfilled.

In this article:
Most Popular