The Sunbeam's development was funded by a UK Government grant with the aim of keeping the Linwood plant running, and the small car was based on the larger Hillman Avenger, also manufactured there.

In the mid-1970s, the British automotive industry was in crisis, marred by bad management, frequent strikes and decreasing competitiveness compared to the increasingly successful French and Japanese automakers.

[4] In 1975, the infamous Ryder Report led to the effective nationalisation of Chrysler UK's major competitor, British Leyland.

Chrysler management decided that the company should therefore also benefit from state aid, and pressed the government for it by threatening to close the UK operations.

The Sunbeam was, unlike the larger Horizon and Alpine models which were launched by Chrysler in the mid to late 1970s, never sold in France as a Simca.

[4] Although it was targeted at the supermini size class, the Sunbeam's Avenger underpinnings meant that it was slightly larger than its intended rivals, and overlapped with the Horizon model.

The Sunbeam's main competitor in the UK, the Vauxhall Chevette was produced in different body styles, two- and four-door saloons and an estate, catering to a broader range of customers.

[4] After a remarkably short development period of 19 months, the Chrysler Sunbeam was launched on July 23, 1977, to a positive reception by the British automotive press.

To reduce in-house competition, the more basic versions of the two-door Avengers were dropped at the same time in the UK market, and the Chrysler Horizon was only available in five-door form.

It featured sporty two-tone paint and body kit, and was very sport-oriented, being stripped of equipment that would have compromised its performance (and image).

[4] Chrysler had also commissioned the sports car manufacturer and engineering company Lotus to develop a strict rally version of the Sunbeam.

The drivetrain comprised an enlarged, 2,172 cc, version of the Lotus 1973 cc Type 907 engine, a 16V slant four engine (the Sunbeam version being the Type 911, along with a ZF gearbox, both mounted in the car at Ludham Airfield, close to the Lotus facility in Hethel, Norfolk, where the almost-complete cars were shipped from Linwood.

The six cars were modified to appear as regular Talbot Sunbeams, being painted in regular Talbot colours and having exterior Lotus badging removed while also being equipped with a Britax magnetic blue light, two-tone siren horns, police warning signage on the tailgate lid and a VHF police radio.