9 past mistakes offer lessons for today’s new automakers

In 2021, there are easily twenty electric vehicle start-ups whose founders dream of becoming the next Tesla. Wanting to be the next big thing is a story as old as the auto industry, given that over 2,000 American automakers have come and gone, and all of those founders had the same dream. Many have found some initial success only to make it all go wrong in the end.

As glamorous as the auto industry may seem, the chances of lasting success for new manufacturers are slim. So, while many failed companies have since faded into oblivion, their stories may be of some use to novice manufacturers today.

Selling reliability is not a panacea

Engine failures were common in the early days of the automobile; the driver and passengers could regularly find themselves stranded miles from their homes. Most car manufacturers have responded by trying to improve the quality of their engines. But not Howard Carter.

Howard Carter’s idea was to equip his new car with two 24-horsepower air-cooled four-cylinder engines and accompanying accessories. Each engine would operate independently, connected by clutches in the flywheels and by chains to a single three-speed transmission. While the aftermarket motor could be used if the other one broke down, it could also hike the other up to traverse a steep hill, although you would have to crank each motor by hand to start it. Carter worked with water-cooled four and six-cylinder engines, as well as twin radiators, ignitions and exhaust.

As you might expect, these cars, dubbed the Carter Two-Engine Car, were heavier than their rivals. A lower-cost line, the Washington single-engine, proved more popular, and the twin-engine car eventually lived a brief life from 1908 to 1909. The public, it seemed, was ready to try their luck with it. a single engine car. .

The moral? Save it for NASA: Selling reliability doesn’t always work.

Don’t forget to run your business, as well as a race

Front-wheel drive is now common, but it took decades to overcome its inherent problem that the wheels that steer the car provide propulsion as well.

But J. Walter Christie believed that a car should be pulled like a train, not pushed like a boat. So he built an engine and mounted it transversely between the front wheels. The crankshaft moved the front axle, directly driving the front wheels via flywheels coupled by clutches to telescopic universal joints. He established the Christie Direct Action Motor Car Company in 1905 with the intention of manufacturing his new creation. To make him known, Christie entered the race, becoming the first American to participate in the French Grand Prix in 1907; he drove a 20-liter V-4 engine racing car. Unfortunately, the sales never materialized. “It’s not a shame to be poor, but it’s pretty damn embarrassing,” he reportedly said, according to auto historian Beverly Rae Kimes.

The moral? Race cars can be fun, but that doesn’t pay the bills. Focus on production and sale consumer cars.

Even a successful Wall Street bull gets bitten by a bear market

You only have so many chances to succeed. Consider William Crapo Durant (yes, this was his middle name), which created General Motors in 1908. Ousted from GM two years after its inception, Durant regained control in 1915 through a series of financial moves, only to lose control again five years later when his Stock market shenanigans have put GM in financial jeopardy.

Intrepid, he founded Durant Motors in 1921, building an empire similar to GM’s and made up of Locomobile, Flint, Durant and Star. Initially successful, the company grew rapidly, but sales began to decline in the middle of the decade. Undeterred, Durant continued to grow his business through acquisitions, which quickly put the company in a difficult financial position.

The stock market crash of 1929 caused auto sales to drop sharply everywhere and put a number of automakers at risk, including Durant’s. By 1933 Durant Motors was over, as was Durant’s career in the automotive industry. He declared bankruptcy in 1936 and his only assets were $ 250 of his clothes, according to the February 9, 1936 edition of the New York Times, against $ 914,231 of liabilities. He died in 1947 at the age of 85.

The moral? While there may be second acts in American life, there are few thirds, quarters, or fifths.