Bugatti Resigned to Exclusivity

Sorry, all you wanna-be Bugatti buyers. If you can’t come up with the $1.4 million it’d take to park a Veyron in your garage, you’ll have to just settle for something more mundane – perhaps a Ferrari F430 or Mercedes-Benz SLR.


The reborn French marque, the top-line subsidiary of Volkswagen AG, has been struggling to lay out plans for its post-Veyron future, and according to senior managers, one likely move would be to introduce a second model at a slightly more reasonable price.


Make that former managers. With sales of the $1.4-million supercar running at an even more modest pace than the one per week originally forecast, VW ordered a shake-up earlier this year. And now, the new managers have nixed the idea of letting the Bugatti name appear on something that might come in at just a million dollars even.


On the other hand, “We will continue the brand and there will be new products,” assured Franz-Josef Paefgen, the well-regarded head of VW’s Bentley brand, who was recently given additional duties as Bugatti’s CEO.


A number of key decisions are still in the works, he stressed, but “a few decisions have been made already, and there will be no smaller Bugatti. If a second car comes to market, it will be in the same market segment as the current (1000-horsepower) car.”


And like the current Veyron 16/4, Paefgen assured, “It will be extremely exclusive, with lifetime volumes in the hundreds, not thousands.”


While Paefgen insisted sales levels for the Bugatti are “not bad,” industry analysts counter that volumes are way short of original expectations and have led the French brand to run up huge losses.


That might come as a surprise, considering the massive growth in global wealth – especially among the super-rich. The luxury car market, as a whole, has grown to new records, Bugatti’s sibling Bentley brand, for example, nudging 10,000 sales annually.


But with rare exception, the big growth has come in the mid-high luxury segment: Bentley’s various Continental models, in the $150,000 to $200,000 range, rather than the top-line Arnage, as an example.


That’s in sharp contrast to, say, the luxury yacht and private jet industries, where anything and everything goes, notes Paefgen’s second-in-command, Stuart McCullough. When it comes to cars, “People often choose the default option that’s not quite as extravagant,” he acknowledged.


Why? That’s a matter of consistent debate. Safety and security issues may play a role. And there’s the issue of image. As expensive as a Mercedes-Benz CL65 AMG may seem, it doesn’t quite send the same message as pulling up to the family business in a Bugatti Veyron.


So despite all the potential buyers, Bugatti is accepting the idea that its products, current and future, will remain only slightly less exclusive than the Hope diamond.

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