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Volkswagen losing an unbelievable 6.27M USD for each Bugatti Veyron sold

 Volkswagen losing an unbelievable 6.27M USD for each Bugatti Veyron sold
Bugatti Veyron Grand Sport Vitesse Jean Bugatti special edition live at 2013 Frankfurt Motor Show 10.09.2013

VW knew Veyron would be sold at a loss

An analysis made by Berstein Research shows Volkswagen lost a whopping 6.27M USD on each Bugatti Veryon sold since the supercar was introduced in 2005.

The Volkswagen Group knew right from the start the Bugatti Veyron would be sold at a loss but still launched the car as a technical showcase. Berstein Research's figures show Volkswagen lost approximately 6.27M USD on each Veyron they have ever made, a figure which is very hard to believe and makes us wonder why Volkswagen is still selling the Veyron even though they are losing so much money per car.

The Veyron isn't Volkswagen's only model which is sold at a loss as the Phaeton (on sale since 2001) is causing the automaker to lose about 38,252 USD on each unit. The Renault Vel Satis was also a model which incurred a loss for its automaker, with a 25,459 USD bill for every unit sold. The list goes on with the Peugeot 1007 (20,927 USD), Audi A2 (10,247 USD), Jaguar X-Type (6,376 USD), Smart ForTwo (6,080 USD), Renault Laguna (4,826 USD), Fiat Stilo (3,712 USD) and the first-gen Mercedes-Benz A-Class (1,962 USD).

Overall, the biggest loss was at Daimler's Smart with 4.55B USD between 1995 and 2006. Second place goes to Fiat with a 2.86B USD for the Stilo (2001-2009). Up next is the Volkswagen Phaeton (2.71B USD), Peugeot 1007 (2004-2009) with 2.57B USD, first-gen Mercedes-Benz A-Class (2.32B USD), Bugatti Veyron and Jaguar X-Type with 2.31B USD each, Renault Laguna (2006-2012) with 2.1B USD, Audi A2 (1.93B USD) and the Renault Vel Satis which incurred a loss of 1.61B USD during production (2001-2009).

Source: Berstein Research

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Comments (22)

NelisvanWieren
That might explain all the special versions
Oct 2, 2013 1:38 am
3 0
DionCassius1
This one is for the casual auto fans that know nothing about the fact that all the investestments research and innovations needed for the production of Veyron have application at smaller or larger scale on all VW group cars( from VW to Audi, Bentley, Lamborghini and so on an so forth..)Only the research done for the Veyron transmission before even launching it cost a quarter of a billion euros, for the exhaust.. a few dozen millions etc. There was no way they could turn profit out of Bugatti with a few hundred units sold. People keep missing the point, Bugatti is for VW the same thing F1 is for Mercedes, Renault, Ferrari: research, innovation, image.. Pointless study.
Oct 1, 2013 9:48 am
2 0
Targa_Florio
20k$ per Peugeot 1007... yeah right ... isn't that (significantly) more than the list price of the car?! If that's so they really messed up with the business case.
Oct 1, 2013 4:50 am
3 0
Bozzor
I believe we're getting a bit of a demonstration in accounting "fudge" common to all engineering multinationals - and many other smaller companies. Yes, if you take a simple view that this much was spent on R&D for the car, then the setup facilities, then the operational ongoings etc...then it probably is a major loss. But what it doesn't show is the R&D cost reduction for other models. DSG, turbocharging, materials science, new manufacturing methods etc were all pioneered with the Bugatti and have filtered down to other models and greatly reduced their development and manufacturing costs. I have done a lot of advisory work in this field and have seen the accounting tricks pulled at various levels, depending on whether its best to book huge losses in one year and get it out of the way, spread costs out over time or to play political games and screw over people, just to name a few. That's what's happening here.
Sep 30, 2013 11:31 pm
4 0
batmobile
The reporting of this appears completely misleading. Somebody has calculated the total development cost, and divided by the small number sold = $6 million loss per car. However, the development costs are now sunk ... and the only relevant issue is whether they make a profit on each additional car sold. It seems pretty clear that the marginal revenue EXCEEDS marginal cost, for all new cars produced ... i.e. it's worth their while to sell as many as possible.
Sep 30, 2013 11:44 am
8 0
Aesthetics
hard to believe when Nissan claims to be raking in profit for each Nissan gt-r. maybe they just don't want their potential customers to feel like they are over paying
Sep 30, 2013 10:35 am
4 1
EdBacau
Nissan makes huge money with the maintenance costs of the GT-R, that's why they sell them in such small numbers.
Sep 30, 2013 4:51 pm
1 0
Aesthetics
Nissan claim to make money on each car, make more money on maintainence probably. they never claim to make loses on each gt-r
Oct 2, 2013 8:22 pm
1 0
tomi.ro
Do they take into account all the expense, parties, CEO wages and bonuses, commerctials, adn every money spent in that company?! If yes, then they should go shoot their brains out, because several years back Bugatti anounced a much lower values for the loss of each car sold. What happened in the last few years?! No new Bugatti, just a better version of Veyron...So somebody is spending sh*t load of money on various non sales related issues.
Sep 30, 2013 10:03 am
2 0
carbon101
Inflation+management policies gone wrong lool
Oct 1, 2013 5:27 am
0 0
tomi.ro
If i remember correctly, they were loosing only 1-2 millions several years back. I don't think inflation covers a 200% increase :D Anyway. Must be great to be corporate at Bugatti. Make sh*t load of money out of a loosing company.
Oct 1, 2013 6:58 am
1 0
manual-trans
I find this news quite hard to believe or technically not true! They are not even explaining or at least showing the reason of loss. This is a very well structured propaganda by VW to tell the consumers these cars are "a must to buy" and they worth every penny spent on them.
Sep 30, 2013 9:54 am
2 1
HelmydeMeester
Unbelievable how much money they lose on a Veyron... although ofcourse Porsche Audi and VW pull in a lot of cash. Perhaps enough to compensate for a prestige project.
Sep 30, 2013 9:29 am
1 0
HelmydeMeester
Correction, the loss-making A-Class was the first gen ('97-'04), and not the previous gen ('04-'12).
Sep 30, 2013 8:40 am
6 0
adrian.padeanu
Fixed. Thanks for the heads up. Forgot there was a second-gen :)
Sep 30, 2013 9:12 am
3 0
HelmydeMeester
No problem.
Sep 30, 2013 9:28 am
1 0
spitfireengineer
Sometimes I wonder what these CEO's and CFO's have in mind. We have to think of the Veyron as a unique case, because the purpose of the project was the tech and not the money. But aside from this case, the other ones are pure madness. How much money did Jaguar spent developing and building a car based on a Mondeo, to end up loosing 6k in every unit sold?! Seriously, the boss of Jag at the time must had had his head digged in the sand or something. So much ambition to end up shooting their own foot.
Sep 30, 2013 8:13 am
1 0
TareqGhattas
the buggati was an R&D case which resulted in the dsg gearbox not to mention world records and probably tons of things from chassis to weight saving techniques. the loss is a result of the high R&D expenses which they divide on the amount of bugattis that were produced so the more they produce the less they lose. so 1) the calculation arent accurate since that a lot of the technology was used in other cars. 2) i think that this is a publicity stunt to say oh we lose money just to bring you the best cars.. bla bla
Sep 30, 2013 8:02 am
7 0
kimbo
DSG, dual clutch gearboxes were used by Porsche in the late 70s mate..
Sep 30, 2013 8:07 am
9 1
tazcubed
Ouch! Now, I can understand smaller scale production numbers on cheaper "proof-of-concept/viability" vehicles for the short term - this is ridiculous. Bugatti sales simply don't translate into VW sales. So, for those buying Golfs, Jettas and such that means you're paying for someone to own a Bugatti - make sure you knock on the window and ask for a test drive!
Sep 30, 2013 7:44 am
3 0
EdBacau
Looks like Berstein Research have watched the first Veyron review on Top Gear.
Sep 30, 2013 7:24 am
4 0
memexe
That's pretty wild for VW. Why should they do business anyway - Just to sell their Golfs and Jettas at a profit? I find many mainstream vehicles to be overpriced, and yet they are still losing money with them (take the Stilo for instance).
Sep 30, 2013 7:24 am
6 0
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