Oh, everything looked so good on paper. Marry Japanese reliability with British design. The result was the Sterling 825, which this week in 1991 was killed off by its builder, the Rover Group, after selling nearly 35,000 units in four years. Much-loved for its fun-to-drive nature, the Sterling 825 proved that only the British could make a Honda design so unreliable it would become nearly unsaleable.
The illusion and the arrogance of the empire
Our story begins in 1975, when British Leyland, aka the remnants of the entire British motor industry, declared bankruptcy and was nationalised. A series of CEOs argued with workers who seemed more dedicated to strike than work, while privatizing Jaguar, shutting down Triumph and trying to ax Mini. The results are tangible: exports fell to 20% in 1984 from 40% in 1978, while domestic market share fell to 17% in 1986.
That year, Canadian lawyer Graham Day became CEO of British Leyland, admitting he had no idea how to make a car. But he knew how to improve profitability, something the automaker neglected for decades in an effort to capture market share, like General Motors, and with similar results.
By renaming British Leyland to the Austin Rover Group, Day winnowed the company to Rover and MG. It also expanded the company’s relationship with Honda, something that began a few years earlier when a rebadged Honda Ballade appeared as the Triumph Acclaim. About as British as a bottle of Saki, it earned him the nickname Ronda. Day had little choice. The Austin Rover group withered under the double onslaught of the Germans and the Japanese, and so it continued the Anglo-Japanese charade, revamping the Ballad and selling it as the Rover 200. The Honda Concerto is reborn as the Rover 400 , and the Honda Legend becomes the Rover 800, the company’s replacement, the Rover SD1 and the new hope for export sales.
hope is eternal
It was the Rover 800 and the Honda Legend, sold in the United States as the Acura Legend, that became the focus of the Austin Rover Group’s new export push. Both models shared many parts, were developed side-by-side, and sported similar styling.
Honda developed the model’s V6 and transmission while Austin Rover Group designed the frame and suspension. Underbody elements were shared, but the two automakers developed their own suspension settings, sheetmetal, interior design and electrical systems, with Austin Rover Group choosing Lucas.
Austin Rover Group knew its reputation in the United States was tarnished. They sold the Rover 3500 for a year, 1980, and failed miserably. So they came up with a brand name which was: Sterling.
But the car would not be sold by the automaker. Instead, they were sold by an independent company called Austin Rover Cars of North America (ARCONA), owned by Norman Braman, a successful American car dealer and owner of the Philadelphia Eagles. Based in Miami, Braman’s import company signed 135 dealers before the car was launched in the United States in February 1987.
For Honda, then struggling with US “voluntary” export restrictions that limited the number of Japanese cars that could be sold in the United States, the automaker could still make money selling cars through ARCONA.
What hit the showrooms was the Sterling 825, offered in S or SL trim, and powered by the fuel-injected 2.5-liter 24-valve V6 from the Acura Legend. Delivering 151 horsepower and 157 lb-ft of torque through a 5-speed manual transmission on S models or a 4-speed automatic on SL trims. As expected, the interior was trimmed in Connolly leather and burl walnut.
ARCONA said that since the Legend and the Sterling were built side-by-side on the same assembly line, the quality was identical. But the company did not tell everything.
While the Rover 800 and Sterling 825 were built at the company’s factory in Cowley, England, alongside the Honda Legend, these Hondas were sold in Europe. The Acura Legends sold in America were built in Japan, none of which used Sterling’s famous Lucas electrical system.
What went wrong
The Sterling’s first year was its best, with sales of 14,171 units in the United States and 54,000 worldwide, while Acura sold 54,713 Legends in the United States in the same year. But Acura was backed by a car company; Sterling was run by a car dealership, whose loyalty was to move the metal and maintain it, not to build brand equity.
Still, that wasn’t the Sterling’s major problem: poor build quality was.
The Sterling proved so riddled with flaws that a year-long test drive in Automobile Magazine required nine trips to the dealership, which still failed to fix all car ailments. Although Austin Rover Group implemented patches to address the issues, it failed to prevent them from tarnishing Sterling’s image. Sales plummeted, falling to 8,091 units in 1988, as the JD Power survey placed Acura near the top of its list for reliability, while Sterling scraped the bottom. At that time, America entered a recession, which was never a boon for car sales.
The company tried to entice buyers by enlarging the engine to 2.7 liters, renaming the 827 model and offering a five-door sedan as well as a four-door sedan. But sales continued to fall. Despite offering a rebate of $6,000 in 1990, or $13,685 adjusted for inflation, ARCONA only managed to move 4,015 units when Lexus and Infiniti entered the luxury car business, while delivering exceptional quality.
This week in 1991, Austin Rover Group scrapped the pound sterling, ending its hopes of American success.
Back in Britain, Margaret Thatcher had had enough of the motor trade. As it entered negotiations with General Motors to buy the automaker in 1988, British Aerospace rushed to remove the company from government hands, promising not to sell the company for at least five years. Just over 60 months later, British Aerospace sold it to BMW for £800 million. The Bavarian automaker dumped it eight years later, keeping Mini.
And today Braman Motors still sells cars including Rolls-Royce, Bentley, BMW, Porsche and Mini.