The car was designed by a group of ex-Lotus engineers led by Paul Haussauer with styling by John Frayling. The company was set up in 1969, and production started in small scale from July 1971. From September, official production began at a new factory in Washington set up with the aid of a government grant. Engineer Brian Luff, one of the brains behind the all-conquering Lotus 72, created "a remarkably strong, yet ultra-lightweight, monocoque." Aside from the engine, front and rear suspensions were also lifted from the donor Imp. Handling was described as both agile and tenacious, and more power would not have proved a problem. Design was distinct rather than pretty, with debatable protruding headlights and slablike sides. The black plastic engine lid opened sideways, to the left.
The car was available in either kit or fully built versions. With the 51 hp (38 kW) at 6,100 rpm Imp Sport engine and four-speed manual transmission, top speed was 99 mph (159 km/h). Although the little car received good reviews and achieved some competition success, it was expensive at £1400 (£1123 in kit form) when compared with rivals. With little financial backing, constant industrial action, the fuel crisis, and the imposition of VAT on kit cars in 1973 meant that Clan soon met its end in spite of passing MIRA crash testing in 1972. Particularly troublesome was when Chrysler went on strike and deliveries of running gear seized. The company shut down in November 1973. Total production in this first phase was 315, although a number were later finished from incomplete cars sold by the receivers.
After closure the body moulds were bought by Andreas Kaisis, a businessman from Cyprus and owner of the Kaisis Motor Company. Just as production was about to begin, Turkey invaded Cyprus and plans were shelved. These moulds remained under cover until brought back to Britain a few years later. Meanwhile, about a dozen or so replica body shells made by copying an existing car were sold by Brian Luff. In 1982, Clan-fan Peter McCandless bought these moulds and intended to revive the car. At the same time, original founder Haussauer had the same idea and a period of recriminations occurred.