Why and how can Bugatti/Volkswagen take a loss on every single Veyron?

My assumption is that they sell it at a slight loss in order to move units to showcase their Veyron, so that as they are relaunching the brand and they can make money on future models.





Am I correct or is there more to it?|||I think that there is more to this than meets the eye; having a exclusive brand like Bugatti means cutting edge technology and design, things that can later be spread down to lower line models, like Audi and Volkswagen.





Its more than just a showcase of brand management; yes, they will loose money on every Veyron they build in the beginning of the Bugatti/Volkswagen "partnership," but once the plant costs have been paid for, then it becomes an issue of building just enough to insure a profit at low volumnes, but keeping the "magic" of demand and desirability alive. The sports luxury models from Italian makers Ferrari and Lamborghini have done this very well over many years and manage to build very small amounts of vehicles, yet turn a profit on each one. Volkswagen will do the same with the Veyron and its sucessor models if it can establish and manage the brand desirability correctly.





Ferrari as you know, has a parent compnay and so does Lamborghini, and the costs of engineering development are spread down to more "common" models as the engineering proves sucessful. A good example is the "paddle shifter," a direct development of racing, now found in rather common model vehicles. The engineering costs were borne by racing and exclusive sports models, it proved that it can work, thus it has filtered down to the normal street vehicle.





Racing and speciality sports/very limited production vehicle engineering improves mass production vehicles. Honda used to say that racing improves the Accord; it taught them to build very light weight motors with the variable Valve timing controlled by oil pressure. and I'm sure that VW will use some of the technology used in the Veyron in other vehicles. It just makes economic sense (cents, get it..ok bad joke).





The Phaeton was a market failure; but, not an engineering failure. I think that VW learned a lot about assembling a limited production vehicle by building the Phaeton and I'm certain that what they learned about it will probably be used in building the Veyron.





At least this is how I see it; spent 25 years on/off in Volkswagen dealership service departments, 30 years in the automotive business.|||Exactly, its still cheaper than straight R/D.|||i think u r correct, i have heard the same thing but i am not sure y they do that