Why it’s Good Volkswagen Loses $6.27 Million on Every Bugatti Veyron Sold

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Bugatti Veyron Grand Sport Vitesse Jean Bugatti Special Edition Home

When VW Group was engineering the Bugatti Veyron for its 2005 market introduction, they knew the car would be sold at a loss. A recent study by Berstein Research indicates VW Group has sacrificed $6.27 million on every Bugatti Veyron sold.

That sounds pretty awful until you realize that, more than anything, the Veyron was built as a “technical showcase”, or a binge R&D investment for the entire Volkswagen Group. Think of it this way: VW Group built a car five steps ahead of the technology curve, and the discoveries they made in turbocharging, fluid dynamics, weight-savings and other areas were likely invaluable — the DSG transmission came from the Veyron project, by the way. When a company engineers a car that can do 260+ mph, they become better at making one of their fast luxury cars (e.g. Audi RS 7) do 190.

In a nutshell, it’s a question of wanting to spend R&D money evenly across all the group’s cars, or dump most of the R&D costs on a halo car and let the developments trickle down to the lower-priced cars. Volkswagen chose the latter, and got the side benefit of having a hypercar in their portfolio that raises the VW Group’s prestige, much like investment in F1 makes Ferrari more appealing.

A $6.27 million loss per Veyron? Drop in the bucket.

via [WorldCarFans]

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