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Will Bugatti survive VW's current problems?

Discussion in 'Bugatti' started by jimmyb, Nov 7, 2015.

  1. jimmyb

    jimmyb Formula Junior

    Dec 26, 2005
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    James Bookout
    With the mess that is VW, I wonder if they will (or can) continue to dump money into a brand like Bugatti. The VW crisis, I fear, is going to have far reaching implications, not just to VW.

    Jimmy
     
  2. opencollector

    opencollector Formula Junior

    Feb 1, 2005
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    Thomas
    Who knows if the Veyron was really the money loser it was rumored to be. If VW just wanted to claim some world records by manufacturing a halo car at a huge loss, why keep doing it for an entire decade?

    Presumably the R&D on the new Bugatti is already spent. If the marginal costs are low and the thing is even a little profitable, might as well make them.
     
  3. Nolf1023

    Nolf1023 Rookie

    Jun 18, 2013
    35
    Based on the spy shots that have been released in the past few days, it seems the new car is pretty far along in development. Canning it now would probably be a big waste of money. More importantly, having the next world-beating hypercar as a distraction from the emissions scandal is probably exactly what VW wants.
    The Bugatti name is too important to lose, especially after the success of the Veyron in becoming an automotive icon, regardless of whether or not it made VW any money.
    I am a diehard Bugatti fan, from their early days til now, and it would be quite a shame if they went under again.
     
  4. Zack

    Zack Formula 3

    Dec 18, 2003
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    Bugatti was a loss leader, a halo brand to help VW's other sales. It will be the first to get the axe, in my opinion.

    Financially, it makes sense to do this. VW is not in a position to carry money-losing ventures on the strength of other revenue streams at this point. I am inclined to think VW itself will go under, and economically, it should. But, like the crooked US banks, it's "too big to fail" and I suspect there will be a government bailout.
     
  5. [gTr]

    [gTr] Formula Junior

    Mar 11, 2008
    590
    London, U.K.
    VW will not go under, not even close. How many people were killed by the lie? zero! Companies have done worse and survived. They will pay the fines, fix the engines and move on.
     
  6. jimmyb

    jimmyb Formula Junior

    Dec 26, 2005
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    James Bookout
    I don't think VW will go under. But, Bugatti was always propped up, supported, and kept alive by Ferdinand Piech. Bugatti's value to VW in terms of driving VW sales had to be nil. A guy that could afford a Veyron sure as hell didn't turn around and go buy a Golf/Jetta/Passat for a DD because the same company made/owned VW and Bugatti.

    Jimmy
     
  7. Hugh Conway

    Hugh Conway Karting

    Jul 24, 2012
    139
    Ego. Same reason the Phaeton existed.
     
  8. Zack

    Zack Formula 3

    Dec 18, 2003
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    Bugatti buyers didn't. But people choosing between a Skoda and Saab might have gone, "Oh, the Skoda is built by VW, same company that makes the Veyron" and it might have tilted the decision in VW's favor. That's what halo brands do, they lift the perception of the rest of the company's offerings.
     
  9. Sandy Eggo

    Sandy Eggo F1 Rookie
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    Jun 4, 2009
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    They lost over $6m on each Veyron they made (450 copies over 10 years).

    Volkswagen Loses A Staggering $6.25 Million On Each Bugatti They Sell
     
  10. Zack

    Zack Formula 3

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    Actuaries are now trying to figure this out. So far, the estimate is that the pollution emitted illegally by VW diesels is enough to have cost several lives.

    Yes, companies have done worse and survived. Companies have also done better, and not survived. That really is a meaningless comparison.

    I think VW will survive only because of government bailouts.
     
  11. Zack

    Zack Formula 3

    Dec 18, 2003
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    I have owned numerous VW and Audi products. So has my dad. Neither of us plan on buying any more. Multiply this by millions of customers, and multiply that by tens of thousands of dollars in purchases--you see the scope of this issue?
     
  12. Zack

    Zack Formula 3

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    So, the question is whether Bugatti will survive, not VW. I think if VW is bailed out, or undertakes austerity measures, Bugatti will have to be sold off, or shut down.

    Who are potential buyers? McLaren? Mercedes? I don't see either of them buying it. American brands? Can't see one of them buying it. Japanese? Nope. That leaves who, then? BMW? Maybe, but unlikely, IMO.

    So, I think Bugatti is going to be shuttered for now.
     
  13. Sandy Eggo

    Sandy Eggo F1 Rookie
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    Jun 4, 2009
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    Don't count this guy out: Carlos Ghosn

    I'll bet he's licking his chops (about Bug, not VW)...the French in him would probably love nothing more than to have Bugatti back under a French owned conglomerate (Renault). Plus, he has a giant ego to match Piech.
     
  14. amenasce

    amenasce Two Time F1 World Champ
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    Oct 17, 2001
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    How about China or India? How much would Bugatti be worth anyway? $1b? $2b?
     
  15. jpalmito

    jpalmito Formula 3

    Oh please don't be too harsh With Volkswagen!
    I think now it ´s out of proportions, people should be more interested about food industry which is a real world problem With millions of future cancer and overweight humans.
     
  16. opencollector

    opencollector Formula Junior

    Feb 1, 2005
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    The Jalopnik article that gets repeated everywhere was single-sourced from the Economist which was single-sourced from a report or statement or something made by Max Warburton of Sanford Bernstein Ltd. I have not seen any evidence for this estimate.

    I wouldn't be shocked if VW lost money but I'm not taking one analyst's estimate as gospel. That's why I wrote "who knows."
     
  17. Zack

    Zack Formula 3

    Dec 18, 2003
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    As long as VW had a goodwill line item, I would say the Bugattis accounted for a fair part of it and you could make the case that it's paper losses for the marque. However, there is no denying the sinking of real dollars/euros into the R&D that went into their creation and production. There are tax and accounting tricks to balance those investments out too, no doubt.

    Being too harsh...I have no idea. Buying or not buying is a binary decision. It's not like I am going to buy a few VW jackets so they don't incur as much of a lost customer in me. Same for my dad. Same for every other customer who walks away in disappointment/disgust. Collectively, it's a VERY harsh deal for VW. I don't think they will survive without a bailout.

    Carlos Ghosn, there's a ghost from the past. I wonder about him...but looking at his past work, I don't think he would be interested.

    China - their economy is in the toilet. And sentiment is very much against conspicuous spending now that the government is cracking down. Doesn't seem like an attractive investment for the very few players who could.

    India - maybe. If it's cheap enough, yes, it could get snapped up by an Indian conglomerate.
     
  18. tritone

    tritone F1 Rookie
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    Me too: 22 Porsches at last count; 9 Audi's (3 now); 2 VW's. Nothing in the current situation with non-compliant diesel-engined cars will keep me from owning more Porsches and Audis. Perhaps even a diesel in the future......
     
  19. [gTr]

    [gTr] Formula Junior

    Mar 11, 2008
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    India is not a luxury car market, makes no sense for an Indian car brand to buy Bugatti.
     
  20. technom3

    technom3 F1 Rookie
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    you mean like jaguar and Land Rover?
     
  21. Atlanta355

    Atlanta355 Karting

    Jun 7, 2008
    153
    Atlanta
    Yeah me too, i just bought a 2015 TDI two weeks before this scandal broke and am not concerned in the least. In fact we are about to trade our A4 against a Golf R. This will all be forgotten about soon.

    As for VW going bankrupt there is zero chance of that happening. I also wouldn't be surprised if the TDI's start to appreciate soon in the US if they really can't sell anymore.
     
  22. Zack

    Zack Formula 3

    Dec 18, 2003
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    It certainly is...though a small one. There are plenty of Indian billionaires and centi millionaires--and they buy hypercars. Some ship them abroad, some keep them abroad, some drive them infrequently in India, and some just stare at them.

    Indian companies have global reach. They will continue to sell the car into its current markets and perhaps find new ones too, same as any other company. We are talking about ownership only, not marketing strategy.
     
  23. Zack

    Zack Formula 3

    Dec 18, 2003
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    You don't care your car pollutes 40 times more than it's supposed to? Governments enact restrictive laws because of uncaring people like you, and then everyone whines about taxes, costs, big government, etc. Why do you not care? Do you realize you are saying you support global warming? I know the arguments about your contribution being negligible, but many people acting like you create a significant impact. If people can't self-regulate, what choice do the rest of us have but to vote for our government to regulate everyone?

    TDi appreciation due to rarity? That's a bit of wishful thinking in my opinion.
     
  24. Atlanta355

    Atlanta355 Karting

    Jun 7, 2008
    153
    Atlanta
    You have it wrong, government enacted strict regulations on small diesels that made people not care. There are lots of worse polluters on the road that don't even need to meet emissions. Big trucks on average spew the equal of 150 VW TDI's yet I don't see governments suing them or even forcing stringent emissions controls on them. IMHO the drama about VW is way over the top. It sure is not going to destroy the brand. If the EPA were serious about emissions they wouldn't give breaks to the worse polluting vehicles and tax breaks to SUV's over a certain weight. Let alone airlines or power plants. In my state GA there is no emissions testing period for diesel vehicles.........

    Not sure someone like me driving my TDI about 20 miles a week contributes much to global warming either compared to people commuting 100 miles a day in an SUV sitting in traffic.

    Anyway the fact is the 2.0 TDI is a great car and if no more get sold they will probably gain a cult following. I know 3 other people with them and none seem bothered by this. Most buy TDI's for the long haul and wear them into the ground as they are so durable.
     
  25. opencollector

    opencollector Formula Junior

    Feb 1, 2005
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    Thomas
    The Justice department sued Caterpillar, Cummins, Detroit Diesel, Mack, Navistar, Renault and Volvo over diesel truck emissions cheating back in the '90s.

    EPA has been steadily ratcheting up emissions standards for heavy diesel trucks for 20 years. NOx limits are 1/20th what they were. All the newer trucks have PM filters. Commercial diesels are being held to standards that exceed those in force when they were manufactured. In California, for example, ALL big diesel trucks will have to comply with 2010 standards within 5 years. The shakeup in commercial diesels is bigger than what's going on with passenger cars.

    Global warming isn't at issue in the VW scandal. Whatever remedy they come up with will almost certainly increase carbon emissions.
     

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