Why did DeLorean Fail ? ……

The answer is more complicated than some may think, and looking at the factors involved the DeLorean Motor Company it certainly had more than it’s fair share of problems.

One thing to bear in mind before we get started here, is that John Z Delorean accomplished something still to this day could never be replicated again (and this was in 1978). In that he constructed an brand new assembly 66,321sqm Plant, hired a management team / supporting staff, trained a workforce of 2300 to build a unique Stainless Steel Sports Car within 28 months.

At the time (1978) Porsche said it would take 7 years to design and build a brand new car, Ford said it would take them 5 years (Even with all the Design, Manufacturing, Supply, Staff and Production already in place…….

1974 DMC Incorporated - 1975 - Design placed with Giorgetto Giugiaro - 1977 First Prototype - 158 Investing Dealers - 1978 Funding Secured (after just 45 days) - 02.10.1978 Factory Groundbreaking started with the first DeLorean rolling off the line 21.01.1981 with the shipment of cars leaving from the factory on 20.02.1981.

DMC’s funding was exhausted as the 1st car rolled off the line, Sales were paramount. So no time was left to fully test the car / rectify and correct any factory production techniques before it was shipping. Of course this lead to many high profile and famous people receiving the first cars with production faults, bad press quickly sprea, the cars were returned to Dealers and and so the story begins …….

Why did DeLorean Motor Company fail ? here are some of answers are here …...

Taking you Back to January 1982

DMC was promised government funding after the 1st car rolled off the Production line (£21 Million) which never happen, as Margret Thatcher had come into power, she had been incorrectly advised of the funding required for DMC, so without further investigation or talks said no more British funding.

U.S dragged into recession, the worst since the 1970 fuel crisis, hitting car sales hard

Snowing in U.K but worse in North East of the United States (DeLorean’s only export market) experiencing its worse storm in modern history = no one buying cars
DMC used GM, Ford, Chrysler and European dealerships to sell their cars. But with dealerships needing to preserve their own cash flow, they concentrated on higher volume cars. So single figure sales for DeLorean were not a priority, so got pushed to one side.
Secret shopper tapes revealed dealerships knew very little about lead times, stock for sale, or details of the car, leading to poor sale technique/ no sales.
A strike on January 11th by Shipping workers between British and Northern Ireland caused supply problems, so workforce put on short time
Factory suffered (accidental) damage caused in the hunger riots which totally destroyed Design blueprints, and all factory worker records
£14 million compensation claim submitted by DCML (for insurance damaged caused to the factory by hunger strike riots) was never paid to DMC from the Department of Commerce.

Tough months ahead on cash flow for DMCL

DMCL had a credit line of $30 Million with the Bank of Americas. This covered the cars during transit – Export carparks were nearly full, so they neared credit limit

Suppliers asked to provide extra credit, as funding was so low

This coincided with the last 2 shipments of 1075 cars ($22 million dollars worth) being released without being covered by the Bank of America, meaning that inward cash flow had dried up.

DMC was also obliged to pay the British government £185 (nearly $400) for each car sold, cutting into the company’s per-car margins.

DMC American could not pay the $22 million to DCML for the stock exported as sales had dried up throughout network.

Week 3 - January with Bank of America Credit line exhausted, on the 28th they withdrawn export cover

1100 of the 2600 (mainly 2nd shift) made redundant, with C.P Trim reduced to 1 day a week

8,580 Cars made up to receivership on 19.02.1982

9,080 Cars made in total up to February 1983

One question remains did DeLorean really fail ?

Well 40 years on and the ‘Dream’ is still alive, maybe the Back to the Future film did move the spotlight from the amazing accomplishments of the 2500 Dunmurry Northern Ireland Factory workers.

But it firmly fixed the DeLorean as one of the most Iconic movie cars of all time.

John DeLorean’s original concept was to build a car :

That was instantly recognisable and the test of time this is still true today whether your young or old - Yes

A Dream Sports Car that lasted as long as the owner wanted to keep it - Yes
To ‘Live the Dream’ - Yes, (maybe not in the way John Z DeLorean imagined) but 40 years on the car is being kept alive by the owners, along with the backup of full dealer services by DeLorean Motor Company operating today in Texas, Florida, Midwest, California, U.K - Yes
Build a car that will never rust - Yes
A unique Iconic car - Yes