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12 of the Car Industry’s Biggest Flops, Scandals and Mistakes

Vukasin Herbez November 6, 2018

4. Yugo GV

Back in the late ’80s, the ex-Yugoslav car manufacturer, Crvena Zastava attempted to enter the American market with their compact model, the Yugo. The Yugo was an attractive three-door hatchback they built on a Fiat 127 base. But it also came with some improvements in design and technology. Under the hood was a 1.1-liter four-cylinder engine with electronic fuel injection. But for the U.S. market, the buyers got better equipment, a radio, and even AC as an option.

From today’s standpoint, the Yugo was a basic and even a primitive car. However, in the middle of the ’80s, it was a decent proposition and a solution to the economic car dilemma. Fiat mechanics were relatively common in the U.S. since Fiat has just left the American marketplace in the early ’80s. So, why did the Yugo receive such bad reviews from Consumer Reports back in the day?

The reason was simple: driving dynamics and quality. Both were horrible, even by the standards of the day. The engine sent 65 HP to the front wheels over a badly assembled five-speed manual gearbox. The performance was painfully slow, but that is not the worst thing. Also, the fit and finish were bad.

And to make things worse, Yugo importer, Malcolm Bricklin didn’t import enough spare parts. So, if your Yugo broke down, and eventually they all did, the spare parts traveled for months from Yugoslavia to America. Despite that, the Yugo was somewhat of a sales success because they sold over 40,000 of them. The $4,000 price tag was one of the reasons. The Yugo was the most affordable automobile for sale in America when they introduced it.

5. Cadillac Cimarron

Today, almost all luxury brands have downsized their lineup of models, offering more affordable, compact versions of their big sedans. But, back in the early ’80s, this move was something still unheard of and hard to understand. In those days, Cadillac had somewhat of an identity crisis, so they needed to reinvent themselves to fight their foreign competitors.

After long meetings with their product development managers, they decided to introduce a small Cadillac with a lower price to attract more customers. The problem was that Cadillac didn’t have a small platform. So, they turned to Chevrolet and borrowed the modest Cavalier chassis along with their small, slow four-cylinder engine.

Although Cadillac dressed the Cavalier with unique trim, new colors and a new name: the Cimarron, it wasn’t enough. The sales were poor, so Cadillac was under fire from brand loyalists for ruining their image. All over the industry, the Cimarron was a laughing stock. It has remained until this day one of the worst examples of downsizing ever.

6. Cadillac 8-6-4 Engine

Back in the early ’80s, when fuel efficiency and cost savings were imperatives in the car game, manufacturers experimented with various engines and drivetrains. So, Oldsmobile went the diesel route by introducing the notoriously bad 4.3-liter V8 and then the slightly better 5.7-liter V8. However, Cadillac decided to install fancy electronic cylinder deactivation systems on their gasoline V8s.

The idea was like today’s modern systems in many models with big engines. When cruising around town, the car used only four cylinders and the rest were deactivated electronically. This stopped the fuel delivery and shut down the spark plugs. When the driver needed more power, two more cylinders activated, making the engine a V6. And when the throttle was pushed to the end, all eight would fire up to deliver full power.

Everything worked great on paper, at least, so their customers were interested. However, as soon as they delivered the first cars, the problems started. Simply, the electronic system was terribly unreliable, so the engine tended to get stuck in one mode, often as a four-cylinder. After a few years on the market, Cadillac discontinued this option. It took them a long time to recover from their lost reputation.

7. Oldsmobile Cutlass Diesel

In the late ’70s, American manufacturers were all about fuel efficiency and downsizing. The era of big cruisers and powerful gasoline engines of the ’60s was gone. Everybody was trying to find a way to introduce new, innovative technologies. Oldsmobile was at the forefront of this new trend with the introduction of the diesel engine in passenger cars. In those days, American buyers were unaware they could use diesel fuel for their cars.

European customers already had a couple of diesel cars on the market, but for the U.S., this was new. Oldsmobile introduced the 4.3-liter V8 diesel engine as an option for the Cutlass line. Soon this model was subject to enormous amounts of recalls and engine swaps. Simply, the 4.3-liter had the tendency to explode and shatter during normal driving.

The passengers weren’t hurt, but the car was unusable and good only for scrap. Oldsmobile later introduced the 5.7-liter diesel, which was somewhat better and more durable. However, most people consider the 4.3-liter to be the worst diesel engine in history.

8. Sterling 825

If you don’t know what the Sterling 825 is, nobody can blame you. They once marketed it as the next big thing in the luxury segment for the American market. However, the Sterling is now a forgotten brand that failed to leave its mark. In fact, it quickly moved to the margins of automotive history. Sterling, as a company, has an interesting story. It was a British company they established in the late ’80s with Honda’s capital and Rover’s design.

Back then, Honda owned Rover and wanted to enter the American market with a luxury model. So, they conceived the Sterling, a luxurious car they based on the Acura Legend. Although it was quite a strange combination, the finished product had an attractive interior and decent power from Honda’s V6 engine. After the introduction in 1987 and promising sales numbers in the first few months, the first problems showed up.

The Sterling was poorly put together and the electronics were troublesome. Also, some cars developed rust issues. Honda tried to improve the production process, but there wasn’t much they could do. So, by the early ’90s, the Sterling was gone and nobody was sad about it, not even Honda.

9. Chevrolet Corvair

In the late ’50s, Chevrolet presented the Corvair, a revolutionary compact car with a rear-mounted, air-cooled, flat-six engine. This was a big step for Chevrolet since the Corvair sat totally opposite of other cars from the company. It featured a different concept, technology and design. However, for a couple of years, it looked like everything was okay with the Corvair. The sales were good until the book, Unsafe at Any Speed, hit bookstores across the country, causing big problems for GM.

The book’s author, Ralph Nader, was a consumer advocate who found classified documents showing that Corvair was the reason for many car accidents, some even with fatal outcomes. Apparently, the engine in the back of the car caused the Corvair to have problematic handling. Chevrolet was aware of the issues but didn’t want to invest money in additional stabilizer bars and suspension modifications. Soon, the book gained attention, so the public demanded answers while drivers continued to report crashes with the Corvair.

Later, Chevrolet was involved in government hearings where they admitted their executives knew something about the matter. They ended up paying a settlement and promising to invest money in safety research. In the end, Corvair sales were non-existent, so they discontinued the model in 1969.

10. Audi 5000

Today, Audi is one of the leading luxury brands in the American market. But in the late ’80s, the company was almost gone from U.S. shores. This was due to the news of unintended acceleration and numerous crashes with the Audi 5000. But, in 1986, the popular CBS TV show, 60 Minutes, ran a feature about the unintended acceleration with the 5000 models.

What the viewers didn’t see was that they rigged the car. The acceleration they featured in the show wasn’t genuine. After the show aired, the car community was buzzing, badly damaging Audi’s reputation. Audi responded by publishing numerous tests and videos showing the only way unintended acceleration occurred was if the driver’s foot slipped from the brake to the accelerator pedal.

However, that didn’t help, so their sales hit rock bottom. Despite the fact that 60 Minutes published a false story and they proved Audi didn’t have acceleration problems, the damage was done. It took the company two decades to recover. It is still unclear why CBS did that feature. Many people wonder if another rival car company was behind it.

11. Takata Airbags

The Takata case is still open and it could be the biggest recall case in the history of the car industry. From 2000 to 2008, the Japanese company, Takata produced at least 17 million airbags for millions of cars. In fact, Takata supplied 10 of the biggest car companies in the world, which made things even worse.

The problem with the airbags was that under specific circumstances like moisture or heat, they could suddenly deploy, causing a small explosion inside the car. Since the airbag is in a metal container, pieces could injure or even kill passengers when something like this happens. All 10 of the world’s biggest carmakers are working together to resolve the issue. However, experts say that over 30 million cars could be affected.

12. Volkswagen’s Dieselgate

In 2015, Volkswagen was the biggest car company in the world. Unfortunately, this position was severely shaken by the EPA’s legal action and alleged violation of the Clean Air Act. Apparently, Volkswagen was cheating on emissions testing by installing special software in its diesel cars on the North American market. The software was on when they tested the cars for emissions, but it then automatically shut off for normal use.

Volkswagen marketed their diesel cars as a cleaner alternative. However, they were polluting the environment more than regular gasoline-powered cars. The scandal became infamous as “Dieselgate,” causing dealerships to put “Stop Sale” signs on all Volkswagen diesel products. There were millions of angry buyers, resulting in a severe sales drop. Currently, the whole Dieselgate situation has cost Volkswagen close to $15 billion in the U.S. market alone.

Have you ever seen or owned any of the car industry’s biggest flops, scandals and mistakes? If so, you’re not alone. In fact, millions of car owners have fallen for these cars. The good news is, the car industry has grown and learned from their errors and misjudgments.

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