Bugatti: what financial crisis?

As you may know already, the hard financial times are the main problem of the car manufacturers all over the world. But it appears that there is one manufacturer that does not feel the crisis and this is Bugatti.

In a recent interview, Bugatti’s Sales & Marketing director announced that they don’t seem to feel the financial crisis, because nobody canceled their orders for the well-known supercars. For those who don’t know, recently the Bugatti Veyron Grand Sport production was started and this will be produced in a limited edition of just 150 units, each priced at 1.8 million… With these prices, no wonder the financial crisis is kept at distance!
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SteedPub - 5/26/2009 11:55:05 AM

+2 Boost

There is still money on the table for the right niche vehicles. I was at Shelby Automobiles in Las Vegas last month and toured their shop. They are busier than they have ever been, hundreds of customer cars getting built, 8 week waiting list, cars coming and going every day.

Even in bad times there is money for the businesses who have the right products.

Joe_Limon - 5/26/2009 12:22:20 PM

+3 Boost

Money doesn't just disappear! In bad times it just shifts to the wealthy.

JRobUSC - 5/26/2009 1:49:08 PM

+1 Boost

I read Bugatti actually loses a fortune on every Veyron they sell because of the stratospheric development costs and the low sales volume to recover it. If I remember correctly it's something incredible, in the range of $1 million per unit. So they're still losing money whether sales have fallen or not. Even when sales were robust they were losing money. It's an image car for VW, not a profit center.

agent507 - 5/27/2009 8:49:24 AM

+1 Boost

In many cases I agree with your comments. But this time I have to question your reasoning.

The more units you sell, the better you are able to make up for the development costs, if it is the case, that the price you get per unit, makes up for the build costs (plus profit).

If you would have said, that the car is so costly to be build, that the price they are asking for it, is due to marketing / image reasons not high enough to cover these costs, then I would have agreed, becaus in this case, the more units they sell, the more they will loose.

Runamukk - 5/26/2009 1:59:45 PM

+1 Boost

I would imagine that if they end up producing a lot more units than they originally anticipated they should be able to make up the R&D costs and turn a profit someday. by offering enough limited edition versions they could also keep their exclusivity.