Abu Dhabi, UAEWednesday 19 June 2019

VW gives Bugatti a long postponed wake-up call

Supercar maker working to streamline investments and improve profitability as parent VW undertakes an overhaul to become more agile and reduce costs

Despite the €11m La Voiture Noire, Bugatti is under pressure to streamline its business and cut costs. EPA
Despite the €11m La Voiture Noire, Bugatti is under pressure to streamline its business and cut costs. EPA

Bugatti, known for hand-building the $5.8 million Divo amid castle grounds in France, is getting a wake up call from its charmed existence to move in line with the rest of the Volkswagen empire.

The supercar maker, which presented the most expensive car ever at the Geneva car show this week, is working to streamline investments and improve profitability, brand president Stephan Winkelmann said. Parent Volkswagen is in the midst of an overhaul to become more agile and reduce costs as the car industry moves through unprecedented change.

“My main goal is being a profitable company through a full exploitation and development of our brand,” Mr Winkelmann said. “We are working to make our investments more efficient.”

VW's drive to loosen up a famously bureaucratic decision-making apparatus will extend well beyond the potential IPO of its truck unit - if the German manufacturer’s leadership has its way.

With a decision imminent on whether to sell a of a minority stake in Traton, chief einancial officer Frank Witter said moving ahead with it would be a good step and “an important sign” for VW.

“We do see the broader strategic dimension of such a move,” Mr Witter said. The manufacturer could delay a deal if market conditions prevent it from generating adequate proceeds, he said.

VW chief executive Herbert Diess, in the driver’s seat since April, has pledged to slash VW’s notoriously excessive engineering costs and allocate significantly more funds to software and electronics.

He’s also on course to create a new “super-luxury” car group comprising Porsche, Lamborghini, Bentley and Bugatti to better share development. In the past, former chairman Ferdinand Piech signed off on some of Bugatti’s outrageous development costs.

There was little sign of the new mantra at Geneva this week, where Bugatti presented La Voiture Noire. A one-off, its owner is speculated to be Mr Piech himself. Still, Mr Winkelmann was clear profits will form part of the brand’s identity in future to woo the world’s most elite buyers.

“I can’t make people dream without a strong company with good financial figures,” he said.

For its 110th anniversary, Bugatti created the jet black rocket that wouldn’t look out of place as Star Wars villain Darth Vader’s preferred mode of transport. “The windscreen seems to flow seamlessly into the windows at the sides like the visor on a helmet,” Bugatti said.

La Voiture Noire is priced at €11 million (Dh45.7m), which would buy about 300 Tesla Model 3s.

While there’s no mention of Mr Piech in Bugatti’s statement, describing the new owner only as an “enthusiast” for the brand, it was Mr Piech who signed off on some of Bugatti’s stellar development costs.

Bugatti’s ultra-wealthy customers appreciated the brand’s expertise in turning out cars to their exacting specifications, said Bugatti design director Achim Anscheidt.

“Our customers really appreciate this, as they know this from purchasing other luxury goods like a yacht,” he said.

The 16-cylinder engine has six tailpipes and La Voiture Noire’s extravagant specs highlight the balancing act VW is pulling off across its 12-brand empire.

The company says the car is “far more than a modern interpretation” of Jean Bugatti’s Type 57 SC Atlantic, an industry icon coveted by classic-car aficionados and the most famous work of the son of the company’s founder, Ettore Bugatti.

The car’s not-so-subtle tailpipes are a reference to the Atlantic model’s five exhausts, said Mr Anscheidt. “They clearly show this isn’t an electric car.”

Updated: March 7, 2019 03:39 PM

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