We recall Rover’s US misadventure with Sterling and ask why it all went so badly wrong for the second time in a decade.
The 1981 Project XX joint venture agreement between Honda and Austin Rover to develop a large luxury saloon appeared to open the way for the British company to return to the United States. It was no secret that Honda was designing its version of the car, the Legend, with the US market firmly in mind. The Japanese company wanted to move upmarket, to raise US transaction prices and profitability in case volume import quotas might be imposed by the US government to protect domestic automakers. If the Legend was explicitly designed to appeal to US customers, then why shouldn’t the British version, the Rover 800, do likewise?
The company’s previous attempt to return to the US market was in 1980 with the SD1 3500 model. Eleven hundred federalised versions of the car were shipped to America to test the market. Unfortunately, the conversion to achieve compliance with US regulations horribly disfigured the car. Four round 5¾” headlamps in makeshift looking apertures replaced the slim rectangular originals, while huge black rubber covered 5mph bumpers protruded clumsily from both ends. The V8 engine was strangled with emissions control equipment.
Even if the federalised SD1 had been able to retain the original’s Ferrari Daytona inspired looks uncorrupted, it was not a car that appealed to American motorists. Firstly, its five-door liftback configuration was not what Americans expected or wanted in a luxury car. Secondly, the traditional wood and leather interior that embellished earlier generation Rovers had been replaced with stark modernism.
The initial batch of cars took almost three years to sell(1) and the car quickly became saddled with a reputation for chronic build quality and reliability issues. There would be no more SD1 exports to the US. Rover retreated, nursing significant losses, both financially and reputationally.
In May 1985, with development of the new model well underway and a UK launch anticipated for mid-1986, plans to export it to the US were set in motion. Austin Rover partnered with Norman Braman to lead the sales effort. Based in Miami, Florida, Braman already held US franchises for a number of European marques including Audi, BMW, Lancia, Maserati, Peugeot, Porsche, Rolls-Royce and Saab. His dealerships, which also included a Cadillac franchise, had achieved sales of over $500 million in 1984. Braman was a wealthy and successful businessman who knew the US auto market well, so seemed to be the ideal candidate for the role.
A new company, Austin Rover Cars of North America (ARCONA) was established to handle the import and distribution of the 800. Braman was the 51% majority shareholder and chairman of ARCONA, with Austin Rover holding the remaining 49%. Ray Ketchledge, formerly Corporate Marketing Director of Volkswagen of America, was appointed President of ARCONA.
The company would initially create a network of 100(2) dealers to sell the new car, mainly located in the Atlantic and Pacific coastal states, where prospective customers were most likely to be located. ARCONA expected the typical customer to be a young(er) sophisticated professional who would tend to favour European imports over domestically produced automobiles. Such was the dealer interest in the new model that ARCONA received over 1,500 requests to attend a conference to promote the franchise held in Chicago in June 1985.
There remained the issue of what to call the new model in the US market. It was agreed that the Rover name had been considerably damaged by the SD1 debacle, so another marque should be used instead. MG was by far the best known of Austin Rover’s marques in the US, but it was associated with small and relatively cheap sports cars, so inappropriate for a large luxury saloon. The company’s other legacy marques, Wolseley and Riley, had virtually no brand recognition in the US.
It was instead decided to create an entirely new marque, one that would emphasise the essential Britishness of the new car (and obfuscate its Honda links). Sterling seemed a highly suitable choice, with connotations of both the country (via the UK currency) and high quality.
Visual changes to the European specification model were relatively limited. The front and rear bumpers were extended and reinforced to meet federal impact regulations, adding around 100mm (4”) to the car’s overall length. Side marker lights and a high-level brake light mounted on the rear parcel shelf were added. The single-piece headlamps were changed for two-part units, still custom-made to fill the same space.
Finally, a slightly naff (to British eyes, at least) cod-heraldic shield replaced the Rover badge. This comprised a red cross on a grey background, overlaid with a lion rampant and surmounted by the name, Sterling. The new badge fitted into the same frame as Rover’s Viking longship logo.
The Sterling was launched in January 1987 with a single engine, Honda’s 2.5 litre 90° V6, mated to a five-speed manual or four-speed automatic transmission. In US emissions-compliant form, the engine produced maximum power of just 151bhp (113kW) and torque of 154 lb ft (209Nm). Although sharing the Legend’s suspension layout, the Sterling was set up rather more firmly, to give the car something of a sporting demeanour.
The car was supplied in two trim levels, S and SL, and advertising majored on its traditional British elements such as Connolly hide leather upholstery and burr walnut inlays on the dashboard and door trims. One press advertisement featured a bucolic English landscape oil painting as its background and quoted poetry from William Wordsworth. The tagline accompanying the advertisements was “Sterling, the inevitable British road car”.
The Sterling range was priced from around $19k for a (still well equipped) entry-level S manual to $26k for the top of the range SL automatic. This model featured as standard equipment duo-tone metallic paint, unique cross-spoke alloy wheels, ABS, memory power seats with leather upholstery and an enhanced eight-speaker audio. ARCONA was somewhat wrong-footed by the high demand for the SL model, which would account for 40% of first year sales. Conversely, manual gearbox Sterlings comprised a derisory 3% of sales, making this option virtually redundant within the range.
The network through which Sterling was sold tended to be multi-franchise import dealerships that did not enjoy a Jaguar franchise. While the official publicity emphasised Sterling’s Britishness, dealers were more than happy quietly to promote the cars Japanese underpinnings and the promise of quality and reliability they offered to prospective customers. Unlike the unfortunate SD1, Sterling was just what American buyers expected to find in a British luxury car.
Initial US impressions and reviews of the new model were generally positive. Ironically, the only serious criticism was reserved for the Honda engine. As in the identically powered Legend, it lacked the power and torque needed for a large luxury car. Some road tests reported niggling faults and assembly issues, but these would be remedied before long, it was charitably assumed. If anything, US reviews were more enthusiastic about Sterling than their UK counterparts were about the Rover 800. In particular, they praised the excellent balance of ride and handling, which was a much better compromise than that offered by the more softly sprung Legend.
The story of Sterling’s performance in the US market continues in Part Two shortly.
(1) Not all found buyers, however. It is estimated that around 200 remained unsold when Rover withdrew.
(2) This ultimately grew to 160 franchised dealers.