Volkswagen Group knew from the beginning that the Bugatti Veyron will be sold at a loss, but still launched the car on the market in order to demonstrate technological capabilities. Bernstein Research showsthat Volkswagen lost about 6.24 million dollars with every product Veyron it sells, numbers which are hard to believe and make us wonder why Volkswagen continues to produce and sell Bugatti Veyron models, if the loss is so great.
Veyron is not the only model of the Volkswagen group sold at a loss. Phaeton, launched in 2001, is causing a loss of about $ 38,252 for each unitsold for the German manufacturer.
Also, there are other car manufacturers that lose money with some of their models. Renault VelSatis produced a $ 25,459 hole in the French manufacturer revenue from each unit sold. The list goes on with Peugeot 1007 ($ 20.927), Audi A2 ($ 10.247), Jaguar X-Type ($ 6.376) Smart ForTwo ($ 6.080), Renault Laguna ($ 4.826) Fiat Stilo ($ 3.712) and the first generation of Mercedes-Benz A-Class ($ 1.962).
Overall, the greatest loss was suffered by Daimler with Smart: $ 4.55 billion between 1995 and 2006. Next is Fiat where Stilo led to losses of $ 2.86 between 2001 and 2009, Volkswagen Phaeton ($ 2.71), Peugeot 1007 (2004-2009) with $ 2.57 billion, Mercedes-Benz A-Class ($ 2.32 billion), Bugatti Veyron and Jaguar X-Type with $ 2.31 billion each, Renault Laguna (2006-2012) with $ 2.1 billion, Audi A2 ($ 1.93 billion) and Renault VelSatis with a total loss of $ 1.61 billion during production (2001-2009).
Why are Volkswagen or Mercedes producing at a loss?
As you can see, most of the models that lose the companies money are from Germany. However, such models are vital to strengthening the image of a car manufacturer and often are considered true “jewels” by the fans, so they are indispensable for producers.
Not all top models that produce loses have created a cult, such as Veyron, that although it was taken out of production in 2011, its various versions, including the Grand Sport, continue to appear on the market.
Vlkswagen Phaeton is kept in the range just for the company not to remain uncoveredin this segment of the market, especially since the purpose of this model is to rival high class autos from Mercedes or BMW. Of course, Audi, owned by Volkswagen,has the same mission, which is the reason why Phaeton remains somewhat caught offside.
Mercedes, on the other hand, leads a very tough fight with its sub- brand, Smart, which continues to decline this year on the European market. To revive sales, Germans plan to extend the range with new models, including a crossover. Mercedes Smart remains important because it ensures the presence of this manufacturer in the premium segment of cities where Mini (BMW) seems to be somewhat more successful.
Recession continues to make its presence felt on the European car market and mostly affects automakers in Europe, determining brands such as Volkswagen, Renault and Mercedes to renew their fleet in recent years, launch new models and discontinue others. However sometimes, as strange as it may seem, it is more profitable for manufacturers to produce at a loss. For example what would happen and how great would the shock be if Mercedes would give up producing Smart?
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