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Old 1st October 2013, 07:18   #1
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Default Bugatti Veyron leads yet another list. Vehicles 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.

Here are the other top cars that are incurring loss to its manufacturer;
  • Phaeton (38,252 USD)
  • The Renault Vel Satis, 25,459 USD
  • 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)
  • first-gen Mercedes-Benz A-Class (1,962 USD).
Source: Berstein Research via worldcarfans
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Old 1st October 2013, 09:11   #2
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Default re: Bugatti Veyron leads yet another list. Vehicles sold at a loss

These cars are just made to showcase their companies capabilities so that they can remain in the exclusive club. VAG group is indeed a very large group with a very good financial health. Even if they loose $ 6.37m for every Veyron they make, also consider how many Veyrons are sold worldwide in a year. In addition to that VAG is worth Billions of dollars and generate revenues multiples times (by selling other cars) of what they loose in the Veyron.

Veyron is also a major marketing strategy adopted by VW to stay at the top of the Car Chain (if I can use that term). What they get in return is a major Halo Effect which turns into sales for their other models. Just imagine you buy yourself a DSG car from VW group and associate it with the Veyron (Since the Veyron too uses a double clutch gearbox aka DSG)

Last edited by rahulsharma2008 : 1st October 2013 at 09:12.
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Old 1st October 2013, 09:42   #3
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Default re: Bugatti Veyron leads yet another list. Vehicles sold at a loss

$6.27M per car is quite unacceptable. It's greater than even the actual cost of the car.
To add, even the Phaeton's loss is unacceptable, a whopping $38K per car ?

-Bhargav
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Old 1st October 2013, 09:46   #4
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Default re: Bugatti Veyron leads yet another list. Vehicles sold at a loss

Where is the Lexus LFA?

And this is just good spin! Any car maker can show the high numbers if they tie the complete R&D cost with a single model. The technology and know-how that found its way into the Veyron will be used across cars in the VAG group in different configurations and that's how this marvelous engineering exercise will pay back.
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Old 1st October 2013, 11:38   #5
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Default re: Bugatti Veyron leads yet another list. Vehicles sold at a loss

Is it because of the initial investment being made to manufacture the Veyron and the ROI is still far away or something else?
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Old 1st October 2013, 11:57   #6
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Default re: Bugatti Veyron leads yet another list. Vehicles sold at a loss

Quote:
Originally Posted by sarathlal View Post
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.
I seriously doubt the veracity of the figures reported in the article.

If the figures were to be believed, then each Veryon must have been sold at 1/4 of the cost of producing it, leading to a 70% [15.5/(37.86+15.52)] loss on each car sold

Why should any commercial automobile company get so philanthropic??

Bugatti Veyron leads yet another list. Vehicles sold at a loss-capture2.png

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**Rates used are only an approximation.

Last edited by Warwithwheels : 1st October 2013 at 12:00.
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Old 1st October 2013, 11:58   #7
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Default re: Bugatti Veyron leads yet another list. Vehicles sold at a loss

Quote:
Originally Posted by sarathlal View Post
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.
I think this figure and article is being misinterpreted.

The fact that they lost 6.27M USD per Veyron since 2005 does not mean that they are going to lose another 6.27M USD on the next Veyron going to be made.

It just means that they have not recovered the R&D costs on the no.of vehicles sold so far. Sell a few more Veyrons and the loss per car comes down because each Veyron is sold at far higher a price than it takes to build one. Its only when the R&D is included that its at a loss. The R&D has been more or less done, so sell as many as you possibly can to reduce the loss is the mantra behind the greedy(as some call it) amount of veyrons being produced.

And of course its all about showing off the technical prowess and getting the trickle down effect to the 'lesser but profitable' cars. Even the Phaeton is a similar brand building exercise I believe.

Last edited by revintup : 1st October 2013 at 12:02.
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