Bugatti facing potential money problems yet again?

(Source: Sympatico/MSN - Autos)

If any classic marque has had more than their fair share of trouble, its Bugatti. After producing some stunning pre-war automobiles of unsurpassed beauty, the brand saw financial ruin in the 90s when they tried to break back into the supercar market with the EB110. Heralded as the most technologically advanced car in the world, the EB110 proved to be too expensive to build for the small company, and the brand floundered.

Then in 2000, Volkswagen Group, Bugattis new owners, introduced the world to what would become a legend: the Veyron. Officially called the Veyron 16.4, the cars nomenclature referred to the number of cylinders (16) and the number of turbochargers (4). Producing 1001 horsepower, the surprisingly small vehicle instantly shot to top of the automotive charts as the hot topic, earning almost every car magazines cover and every automotive TV shows headline. But the Veyrons production has been fraught with problems, ranging from delays to questionable reliability; one tester encountered numerous malfunctioning cars in a single fleet.
And now the firm could be facing even more difficulty, with new "smart" airbag deployment system regulations stipulated by the U.S. government. Going into effect in September, the new rules have forced Bugatti, alongside other low volume exotic manufacturers such as Ferrari, Maserati, Lotus, and Lamborghini, to push for an exemption, however, Bugattis letter is unique in that the companys president pleads that enforcing such a rule "could well put Bugatti out of business."

Citing the domino effect of a costly redesign, increased production costs, and production delays, Bugatti president Thomas Bscher even remarks that forcing Bugatti to replace their existing old-model airbags with the newer, safer technology would result in the delay of the introduction of Bugattis new model.

If the NHTSA accepts Bugattis admission for exemption, it would allow the firm two years worth of production with old-style airbags. That would affect 150 cars headed for the U.S. that Bugatti plans to build before the new models introduction, the design of which apparently allows for the new airbag systems inclusion.

Commanding a price of over $1.2 million CDN but rumoured to cost the VW Group over $7.2 million to manufacture, per car, the Veyron is considered nothing more than a technological showpiece by many, although VW claims to be making money on each Veyron sold. As one of the worlds most expensive cars, mind you, and one that offers up otherworldly performance and unrivalled prestige, one cant help but wonder why a company capable of producing such a technological tour de force would implode at the mere mention of an airbag system update?

chewy - 9/5/2006 6:19:56 PM

+1 Boost

It isn't really that big of a safety feature. The "smart" prevents the airbag going of if there is a kid sitting. Some common sense on the part of the owner solves all problems.

Agent63 - 9/5/2006 6:22:04 PM

+1 Boost

It's unfortunate that Bugatti has to deal with financial holdbacks. They have so much potential but not obstacles always come there way.

They have the pedigree to build the fastest supercar in the world but it costs too much to produce so the mainstream buyers can have a chance to pick one up.

However that's why it is also ultra-exclusive for the ultra-wealthy. The ones who have the opportunity to buy one will have perhaps one of the most desired cars ever made? and probably for many many years to come.

I think the Veyron is very prestigious. 1 for the looks, 2 for the power, and 3 for it's demanding exclusivity.

chewy - 9/5/2006 6:24:37 PM

+1 Boost

Yes, the Veyron is quite possibly the greatest prodcution car ever. Also, the amount of money lost per each Veyron is just a rumour, it was started by Jeremy Clarkson. Bugatti might not be making money, but I don't think that they are losing that much per car. Whne the sedan comes out, it will actually probably make money.

Agent63 - 9/5/2006 6:24:38 PM

+1 Boost

efoxs4:

I agree with you on that one, it will take them a lot to fix a minor thing. VW has helped Bugatti so much in reviving their company. It's just too bad it costs so much to produce.

I doubt they will be as reckless as Enzo drivers. IMO the buyers for this type of car are the older crowds than the younger with lots of money to blow.

BMW530i - 9/5/2006 7:52:54 PM

+1 Boost

Well, nobody may like to hear it, but Bugatti is going to have to build and sell a "less exclusive," "cheaper" car in order to remain profitable. Otherwise, all they'll do is continue to drain tons of money and resources from the rest of VW/Audi.
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Not really. They can stick to building their luxury cars and continue to use money from the VW AG.

This project however has been very costly and they're certainly not going to make a profit from the Veyrons they sell world wide in realation to the amounts spent on the project.

I've said it before: the Veyron is so pointless IMO.

chewy - 9/5/2006 8:01:33 PM

+1 Boost

BMW530i

VAG has spent less on the whole Bugatti Veyron project thnan just one year of F1. It is the baddest car that you can get, or in the near future.

Agent63 - 9/5/2006 8:09:55 PM

+1 Boost

Veyron is basically a car simply designed for bragging rights. Practicality is a rare trait in supercars but the Veyron is virtually beyond a 'supercar' it's an ultra-supercar w/ no praticality, no usability in city roads, and the only place it could really be used is on the highways or back country roads. And even then you still wouldn't want punch it in that machine.

It's nice and luxurious respectively, but for Bugatti to stay in the business they must create other toned down vehicles (perhaps based from a Veyron). A cheaper model with less horsepower but the same passion would equal a potential F430, Gallardo, Aston Martin Vanguish competitor therefore opening the range for customers to chose from. They need to get into markets that are more affordable to the wealthy and not only to the ultra-wealthy (who can spend a million on a car).

I'm sure much of the rich could afford one but would they see the bugatti as something worth the money. I certainly don't. However, if you look at it the other way, it depends where you live. If you live in New York, there's really no point. If you live in a smaller city like Pheonix then maybe you might have the chance to hit up a track and have fun with it. Since it is a luxury brand it's more of a cruiser w/ lots of punch under the hood.

chewy - 9/5/2006 9:08:58 PM

0 Boost

Actually, the Veyron is more drivable than the lesser performance cars like the Porsche Carrera GT, Ferrari Enzo, Koenigsegg CCX. It is probably just as easy to drive as the Ferrari F430.

Agent63 - 9/5/2006 10:04:39 PM

+1 Boost

chewy - 9/5/2006 9:08:58:
Actually, the Veyron is more drivable than the lesser performance cars like the Porsche Carrera GT, Ferrari Enzo, Koenigsegg CCX. It is probably just as easy to drive as the Ferrari F430.

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Just wondering, are you saying this because you test drove one before or from what you see in the reviews and video comparisons produced by the 'experts'.

Even if it is more drivable, to have a million dollar car just sit in the garage is pointless. Many may even value it so much that they will never run it anywhere to risk it getting into an accident. Even if it did get into an accident the resale value would still be more than most of the top end ultra-supercars.

I wouldn't expect it not to be drivable. It's just the price in which you pay for something so expensive that you may not get the chance to drive it like it was designed for. That's why IMO it's not practical. At least in an F430 is more of a daily driver than the Veyron. Even a Murcielago is more of a daily driver in terms of it's cost to drive/insure/maintain.

For me if I wanted a Ultra-luxury Grand Tourer I would go get an SLR instead of the Bugatti. It depends on how deep your pockets are I guess. It's subjective really on what's pratical. Bill Gates could own one and drive it everyday to work, for long drives, a trip across the country and it would be chump change for him.

It all depends..

chewy - 9/5/2006 10:11:05 PM

+1 Boost

Yes, hopefully the people that are spending roughly 1.5 million on the Bugatti Veyron aren't selling their house to pay for it.

DarkOneForce - 9/6/2006 7:11:45 AM

+1 Boost

Bugatti is a money problem.

PlanoA4 - 9/6/2006 8:16:04 AM

+1 Boost

First of all, VW has said they really didn't care if Bugatti made money at this time so don't think Bugatti has to make money at this time. Second of all I seriously doubt if this car would still come to the US if this was that big of an issue. I bet they still would sell every single one overseas without a problem.

Agent63 - 9/6/2006 3:52:44 PM

+1 Boost

PlanoA4, no doubt. People in Europe love this kind of car. Supercars are their trademark and if they got the money they will buy one.

Agent63 - 9/7/2006 9:25:45 AM

+1 Boost

efoxS4 - 9/6/2006 9:17:22 PM+1 Boost
Agent63-

One problem. If Bugatti made a Gallardo competitor, it would be punching Audi/Lamborghini in the gut. It's hard to maintain the ultra-luxury ultra-prestige brands that VW builds (and Porsche too), without them all competing with each other and stealing sales. That is probably one of the reasons Bugatti must remain very upscale so that it doesn't make Lambo look like a bad value, let alone Bentley.

I think that Bugatti should make a Phantom competitor in the $350,000-$400,000, and leave the GTs and supersedans to Bentley.

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I agree with you on that. Good point. Since they are so upscale they should get into the upscale segment. However, since you say a Gallardo competitor may be a punch in audi/lambo's gut. Wouldn't a Bugatti Phantom competitor be punching Bentley in the gut as well?.