Part 23 – A Different Concept – DR Motors
By David Cavaliere
Automotive design in Italy is perhaps best known for two things – sleek sports cars that in poster form, grace the bedroom walls of teenaged boys worldwide, and basic utilitarian vehicles. We think of Ferrari, Lamborghini, Alfa Romeo and Pagani in the former category and Fiat in the latter. There have been many companies that have tried to out-Fiat Italy’s largest automotive company. Some examples include the Volkswagen Beetle, the Morris Mini and the Citroen CV2, but within the borders of Italy, if it is inexpensive four-wheel transportation for the masses, Fiat is King.
The great recession was not kind to the auto industry, not just in the U.S., but worldwide. Fiat had begun its integration with the Chrysler Group in 2009. It was a bold move. To pull it off, Fiat needed to engage in sweeping restructuring and part of this led to the closure of its Termini Imerese plant in Sicily after 41 years of production. The plant closed in November 2011 and was taken over for the symbolic sum of €1, in January 2012 by DR Motors, which had pledged to employ 1,300 workers during the following four year period, while investing capital of €100m. The Italian government would also be kicking in grants of about $35 million.
You would not be alone if you haven’t heard of DR Motors. It is a small Italian manufacturer that assembles cars from Chinese components. The company was started by Massimo Di Risio in 2006. His father was a car dealer and Di Risio had built an enormous car dealership himself. As a former race car driver, he had years of experience in the construction, tuning, driving and repairing of exotic cars. He began contemplating the expansion into a broader scope of business years before he launched the DR Motor brand. Di Risio believed that his greatest business success would be derived by offering the largest number of brands under one roof. Having already sold Ferraris, Lancias and Alfa Romeos, he sought to bring a very low-priced car brand into the fold. In Italy, there is Fiat, but the company was undergoing significant turmoil in the early part of the twenty-first century. Di Risio began to scour the world evaluating low-priced cars. Many such cars are available, some are manufactured in Brazil, others in India and still others in South Africa. Di Risio began to focus on China. With the extraordinary expansion of the country’s automotive industry over the previous decade, Massimo felt that the time was right to create a new concept for the sale of the Chinese cars in Italy. After extensive research, travels and negotiations, he drew up contracts with The Chery Automobile Co. Ltd. The company was created in 1997 by the Chinese government with its purpose, to manufacture small passenger cars and SUVs for the export market. Rather than simply importing the cars, Di Risio wanted to give the automobiles a distinct Italian image. The cars would be manufactured in China but assembled in Italy. There would be differences in the cars from the standard Chinese production models. This was a critical difference in Di Risio’s plan. Chinese cars of a decade ago were clones of well-established automobiles. Buying a new Chery would be like buying a brand new, three-year old model of a Toyota, a Chevrolet or a Volkswagen. With low prices and some Italian flair, Di Risio felt he had a winning strategy for a niche market.
Initially, all of the cars sold under the DR Motors brand were conducted through hypermarkets. A hypermarket is a superstore combining a supermarket and a department store. The car’s components were shipped from China to Italy and were assembled at Di Risio’s automotive headquarters in Isernia Macchia, in the region of Molise. DR Motor launched its first vehicle, the DR5, in November 2007. The SUV was based on Chery Automotive’s version of the Toyota RAV4. The car’s body is made in China and shipped to Italy, where it is assembled on a platform using Fiat’s 120 Hp 1.9 Turbodiesel engine.
The next models introduced were the DR1 and the DR3. The DR1 is a small family car first shown at the Bologna Auto Show in 2009. The car closely resembles the Chevrolet Spark, offering fuel economy of 40 miles per gallon and adequate performance for both city and highway driving. It was initially priced at about $8,000. The DR3 is a smaller, three-door version of the DR5.
DR Motors describes, among its resources, a technical team of highly specialized workers who form the basis of the research and development center. The DR design center claims to be able to influence the lines of the automobiles that it assembles. This is somewhat of an understatement. Its cars have some minor styling differences from the standard Chery models, but, aside from badging, one would only be able to tell the difference between the two cars if the models were parked side-by-side. The company promotes its DR models as having an elegant and sporting character. I am not sure what they are using for comparison, but it certainly cannot be based upon cars. A down market Toyota may still be a fine automobile, but elegant and sporty it is not. The materials used for the interiors are based on sourcing manufacturers that provide the “best value for the money,” in other words – cheap, but cheap is still important in a lot of markets, Italy included.
Not having a distribution network outside the production site, DR entered into an agreement with the Group Finiper to distribute and market the cars through supermarkets and shopping centers. Sales had gone from 0 in 2006, to 21 vehicles in 2007. It then shot up to 1,953 in 2008. In December 2009, at the time of the launch of the DR1, DR Motor Company inaugurated a sales network to distribute the vehicles. The network ultimately reached a peak of one hundred seventy dealers and workshops.
Thanks to its unique business strategy, the automotive brand became famous in Italy. In 2010, Massimo Di Risio received the “Made in Italy” award as personality of the year for his automotive entrepreneurial activities. Things were looking up. In 2009, sales rose to 2,700 while the following year, a total of 5,059 cars and SUVs were sold. At this point, assembly was still being accomplished in workshops in numerous locations in Italy. A significant advantage would be gained if a central assembly point could be established and DR Motors was already in talks with the Italian government and Fiat about taking over Fiat’s Sicily plant.
In a fairy tale story, DR Motors’ sales would have continued to rise. Based upon the growth during prior periods, the company expected to sell 6,500 cars in 2011. With the factory in Termini Imerese becoming available in 2012, as many as 10,000 cars were expected to leave the plant. This was not to be. 2010 proved to be the top of the market for the company. In 2011, only 2,961 cars were sold, a 41% drop in sales. It would be hard to imagine things getting worse, but in 2012, only 736 cars were sold. This number fell to only 436 cars sold in 2013; 349 in 2014; 231 in 2015 and less than 100 cars were sold during the first four months of 2016.
DR Motors is still in business and actually had described plans for the production of the DR Sprint – a rear-engine 750 hp supercar. Di Risio is the official importer of Saleen cars and the sketches of the Sprint looked as though it was based on the Saleen S7 Twin Turbo. Although the car was expected to be unveiled at Monaco in 2012, it looks as though those plans have been shelved. One must wonder how long DR Motors can continue. The Chinese are certainly eager to capitalize on the initial small steps of selling cars in Europe. It will soon want to export cars from China under their own brands and we may find that soon DR Motors has become another defunct brand of the Italian automobile industry.