Help me to understand the Bugatti Veyron

[Crab007]

I asked this question at college today, the issue being business's that sell their products at a loss and still go on, one example of which (in my mind) is the Veyron, and I would be interested to hear if someone can explain to me how this situation works.

As far as I can tell, the rumor-heresay-legend-whatnot is that Bugatti makes a £4.25 million loss on each Veyron sold. So does that mean 450 units x £4.25 million = 1.9 Billion loss for Bugatti?

Maybe my numbers or my maths is a bit off. But the question remains how can Bugatti make such a huge loss, and still exist, at all? And how can the bigwigs at VW greenlight such a thing?

Random quotes for smartness:

“The idea was to make a showcase car to tell the world what the Volkswagen group is capable of doing if the sky is the limit, it is a statement car and we are not even meeting the cost of production.”

Gordon Murray, designer of the McLaren F1 said the following about the Bugatti Veyron in UK auto magazine EVO during its development period:

"The most pointless exercise on the planet has got to be this four-wheel-drive 1001 horsepower Bugatti. I think it’s incredibly childish this thing people have about just one element—top speed or standing kilometre or 0-60. It’s about as narrow minded as you can get as a car designer to pick on one element. It’s like saying we’re going to beat the original Mini because we’re going to make a car 10 mph faster on its top speed—but it's two foot longer and 200 kilos heavier. That’s not car designing—that just reeks of a company who are paranoid."

So what happened here? Fast cars, big losses, they all go on anyway? I would like to know how the Veyron came about with VW knowing what a hit they would take for producing it and still manage to stay in business.

Also: I'm not against the Veyron itself, I think it's a fantastic machine.

[Maserschmidt]

Look up VW's annual marketing spend to put that into context.

Add any ancillary R&D benefits.

[FoieGrasIsEvil]

I can't imagine that VW takes THAT big of a hit on production of the car. It may very well be a loss leader/prestige vehicle...perhaps they recoup some of their money on the service schedule for the thing. Have you seen how much it costs and how often this thing needs maintenance?

http://www.dupontregistry.com/AUTOS/...-annually.aspx

[lazybratsche]

As I understand it, cars like that are development platforms for new technology, and selling the cars is just a way to offset part of the R&D costs. The real money comes in from licensing and marketing. Bugatti develops a new turboencabulator to make their car go faster. A few years later, they license that to some (less-insane) luxury car manufacturer, who proudly markets the fact. "Our cars now come with Bugatti Veyron Turboencabulators!" Bugatti gets a substantial licensing fee on every car sold with their technology. Several years later, at the end of the patent life, Bugatti may license the new turboencabulator to mass-market car makers, where the device slightly improves fuel economy. Now the licensing fees are a smaller cut of a cheaper car, but there's more sales volume so they still make money.

[Baron Greenback]

Originally Posted by Crab007

Gordon Murray, designer of the McLaren F1 said the following about the Bugatti Veyron in UK auto magazine EVO during its development period:

"The most pointless exercise on the planet has got to be this four-wheel-drive 1001 horsepower Bugatti. I think it’s incredibly childish this thing people have about just one element—top speed or standing kilometre or 0-60. It’s about as narrow minded as you can get as a car designer to pick on one element. It’s like saying we’re going to beat the original Mini because we’re going to make a car 10 mph faster on its top speed—but it's two foot longer and 200 kilos heavier. That’s not car designing—that just reeks of a company who are paranoid."

I think a lot of folk thought like Gordon Murray when the Veyron was in development. But the production vehicle is not about pure speed, or some kind of standing kilometre or 0-60 willy-waving, although it is hugely capable in that sort of competition. The insanely silly thing about the Veyron is that is a luxury car, a grand tourer, with the comfort of a Rolls-Royce, and the performance of an F1 car. OK, those last two are a bit of an exaggeration, but not by much.

Why did VW fund it? Because they could.

[astro]

From wiki - The sales are positively miniscule. If they have a bunch of front loaded R&D and tooling costs to make this car it's easy to see how they could lose money on each one.

Sales

Units sold -
2005 - 5
2006 - 44
2007 - 81
2008 - 71
2009 -50
2010 - 40
2011 - 9

Total 300

1. The last Veyron, No. 300 was sold September 2011.

[Alessan]

Because someone has to make the most expensive car in the world, and by God, it's going to be us.

[stanger]

Any high performance sports car is designed to be really good at one particular aspect of performance driving, and is marketed and sold with that premise. I don't think any true performance cars are good at everything, but a very few will be pretty good all around.

Sure, the Veyron is marketed as one, if not the, fastest production car in the world, but few people realize what is involved in making a car capable of such a claim. It is truly a marvel of engineering to push a car through air at those speeds, safely and under full control. Although it has tremendous brakes and handling to compliment that feat, it naturally may not be as good at pothole street driving as another car, or spirited street performance driving. However, when Top Gear tested the car, it felt rock solid all the way up to its top speed and seemed as at ease with it as a family car tooling down the highway. If you know something about cars and performance, that says a lot.

Some performance cars are quarter-mile monsters, some can cut a corner nearly as well as a prepped race car, and some can stretch out on the road so fast that telephone poles look like a picket fence as over a thousand horsepower surrounds you with its song of power.

To lay claim to such a car, to take credit for its beauty, its technology, its reputation, its sheer audacity - that is worth whatever VW has invested in the cars production and its cost.

[jz78817]

Maybe my numbers or my maths is a bit off. But the question remains how can Bugatti make such a huge loss, and still exist, at all? And how can the bigwigs at VW greenlight such a thing?

dickwaving.

“The idea was to make a showcase car to tell the world what the Volkswagen group is capable of doing if the sky is the limit, it is a statement car and we are not even meeting the cost of production.”

i.e. dickwaving.

So what happened here? Fast cars, big losses, they all go on anyway? I would like to know how the Veyron came about with VW knowing what a hit they would take for producing it and still manage to stay in business.

dickwaving.

that's really all it is. The Veyron is the car you would get if you told a bunch of engineers to build a car with no budget constraints. And convinced a bunch of know-nothings on internet message boards that it was the "pinnacle of automotive engineering."

[Alka Seltzer]

The Veyron is simply a loss leader. As a sales strategy, it's been around for a long time. The Veyron has certainly earned VW plenty of media coverage. As transport, it's ridiculous, but then so are all supercars.

I'm somewhat dubious that VW loses as much money on each car as it says it does.

Originally Posted by Crab007

Gordon Murray, designer of the McLaren F1 said the following about the Bugatti Veyron in UK auto magazine EVO during its development period:

"The most pointless exercise on the planet has got to be this four-wheel-drive 1001 horsepower Bugatti. I think it’s incredibly childish this thing people have about just one element—top speed or standing kilometre or 0-60. It’s about as narrow minded as you can get as a car designer to pick on one element. It’s like saying we’re going to beat the original Mini because we’re going to make a car 10 mph faster on its top speed—but it's two foot longer and 200 kilos heavier. That’s not car designing—that just reeks of a company who are paranoid."

Gordon Murray did back away from these comments somewhat after seeing the final product. Despite it's huge weight, the Veyron is a competent track car.

[FoieGrasIsEvil]

Originally Posted by jz78817

that's really all it is. The Veyron is the car you would get if you told a bunch of engineers to build a car with no budget constraints. And convinced a bunch of know-nothings on internet message boards that it was the "pinnacle of automotive engineering."

But for what it is, how is it not some sort of pinnacle of automotive engineering? Doesn't it have like four turbochargers, ten radiators, 1000 HP, insane creature comforts, the ability to go 250mph+, advanced electronics, advanced self-leveling suspension sytems, etc?

Or are you suggesting that this was some kind of experiment gone wrong where they just stuffed everything but the kitchen sink into a car just because they could?

I mean, to a degree ALL supercars are ridiculous and wasteful but they aren't meant to be practical. They are toys for wealthy people, more or less.

[Alessan]

According to the Top Gear Power Lap chart, the Veyron SS is the fourth-fastest road-legal car in the world.

[coremelt]

Originally Posted by Alessan

According to the Top Gear Power Lap chart, the Veyron SS is the fourth-fastest road-legal car in the world.

That's lap time on the top gear test track. Vernon ss has highest top speed of any production car.
http://en.wikipedia.org/wiki/List_of...roduction_cars

[Isamu]

Originally Posted by Alessan

Because someone has to make the most expensive car in the world, and by God, it's going to be us.

The .... Jews?

[dropzone]

Originally Posted by Isamu

The .... Jews?

Maybe. The Porsche-Piëch family hasn't had any problem with them since 1945, even though they have to pay them nowadays.