The Economics Of The Bugatti Veyron

August 23, 2017 in Daily Bulletin

Christoph Rauwald wrote about super cars:

  • The Bugatti Veyron had a limited production run of 450 cars. Each one started at $1.85 million.
  • Yet somehow the company is estimated to have lost over $5 million for each car sold.
  • Executives at parent company Volkswagen point to the research and development costs of building one of the world’s fastest cars as a prime reason for the Veyron’s poor financial performance.
  • They also argue that Bugatti’s reputation helps sell other Volkswagen luxury brands like Porsche and Audi.
  • And management points out that the amount lost on the Bugatti brand is peanuts compared to what other car makers invest in projects like Formula 1 Racing.
  • Prices could increase. Buyers can afford it – the average Bugatti owner has 84 other cars, 3 jets, and a yacht.
  • The carmaker is experimenting with addons like a built-in caviar tray created by a 250-year-old porcelain maker, to further extend its luxury appeal.

Read more on Bloomberg.