VW may sell Bugatti & Lamborghini

[Pebb]

Source: AutoCar

Volkswagen Group could dispose of its high-end supercar brands Bugatti and Lamborghini, according Porsche boss and VW supervisory board member Wendelin Wiedeking.

When asked about the fate of the two brands in an interview with an industry newspaper, Wiedeking is quoted as saying ‘no toys anymore’.

The move, which was flagged up as a possibility in an Autocar Analysis (3 January 2007), would help VW restructure its sprawling business and concentrate on reviving the VW brand as a true global player.

Wiedeking is also reportedly unhappy that Porsche is not the flagship brand in the group and has allegedly commissioned an ultra-high-performance Porsche supercar to break the top speed record set by the Bugatti Veyron.

Industry rumours suggest Bugatti could be downgraded to an ultra-exclusive coachbuilding operation once Veyron production is wound up.

Lamborghini, which sold over 2000 cars last year, could be sold off in the same way that Ford is currently disposing of Aston Martin.

 

[YSSMAN]

Overall, it isn't completely surprising that the new Porsche/VAG group would think about options such as this. IMO, keeping Bugatti is a smart thing to do, having them build high-end, high-power GT cars would bee a good idea, not this wild and crazy sports car business. However dumping Lamborghini, strangely enough, sounds like a good idea as well. Simply put, VAG seems to have taken the "Lamoborghini" out of Lamborghini, as they don't build cars that seem to be as "exciting" as the Diablo, Countach, Muria, etc.

We'll see what comes of it, but thus far the ideas sound okay by me...

 

[Wolfe]

Lamborghini might start building Lamborghinis again, Bugatti might take its glorious new reputation and set off on its own, and Porsche might build a hypercar that can go 255mph+?

I don't see anything wrong with any of that.

 

[Poverty]

I cant see them selling lamborghini, but then again they dont actual make money of lamborghini so maybe...

 

[Pebb]

Lamborghini might start building Lamborghinis again, Bugatti might take its glorious new reputation and set off on its own, and Porsche might build a hypercar that can go 255mph+?

I don't see anything wrong with any of that.

The Lamborghini's made, while VW owned them were still Lamborghini's.

 

[Jedi2016]

The Lamborghini's made, while VW owned them were still Lamborghini's.

There's some debate about that.. hehe.

Clarkson put it best, I think. The Murcielago was done right, with the Germans doing what they were good at, and the Italians doing what they were good at. The Gallardo? Not so much.

 

[YSSMAN]

...Although for some reason the Gallaro Convertible works out better...

Odd?

 

[McLaren]

I cant see them selling lamborghini, but then again they dont actual make money of lamborghini so maybe...

Wrong. VAG actually made a ton of money from the Gallardos primarily because the Gallardo is the most-produced Lamborghini model in the world.

The Lamborghini's made, while VW owned them were still Lamborghini's.

The LP640 was done right. V12, no big supercharger or turbo, ViscousTraction system, big power, raw car.

The Gallardo, as said, not so much. Back then, with the Countach, and Diablo, you had a car that said, LAMBORGHINI! Now, it's kind of Lamborghini with an Audi car.

As for this, it seems VAG wants to get rid of Bugatti so it can stop wasting all that money developing them, but to stop from being responsible for the big record, they'll have Porsche do it.

Lamborghini has been alone before right after Chrysler sold them off, and still managed some monster Diablos. Now, with Lamborghini can excercise complete control, they can go back and make the viscoustraction system actually work to car's benefit.

 

[Philly]

Let's just hope they go to someone worthwile. These are awesome brands, I don't want the industry to play hot-potato with them. It would be great to see some better lambos, but I'm sure for that to happen, they will need to find a good parent company.

 

[Wolfe]

The Lamborghini's made, while VW owned them were still Lamborghini's.

A Lamborghini just isn't a Lamborghini if it isn't brutal, raw, eccentric, and shoddily-built.

It doesn't help that the Gallardo doesn't even register in my mind as a Lamborghini...I just think of it as an Audi.

 

[vladimir]

Source: AutoCar

"‘no toys anymore’.">>>"Wiedeking is also reportedly unhappy that Porsche is not the flagship brand in the group and has allegedly commissioned an ultra-high-performance Porsche supercar to break the top speed record set by the Bugatti Veyron."

 

[Poverty]

Wrong. VAG actually made a ton of money from the Gallardos primarily because the Gallardo is the most-produced Lamborghini model in the world.

No that is wrong, lambo are making money, they just havent turned a profit for VAG as of yet, and they also have a lawsuit or two to worry about aswell.

 

[Scaff]

No that is wrong, lambo are making money, they just havent turned a profit for VAG as of yet, and they also have a lawsuit or two to worry about aswell.

Uhh, yes they have turned a profit.

The firm showed a pre-tax profit of €4.1m (£2.8m) in 2004 and €4.4m in 2005. That is only a 1.8% margin and not enough to fund future investment.

Source - http://www.timesonline.co.uk/article/0,,2095-2393502,00.html

Yes it is a very poor margin (but given the position of the company pre-VAG its not that bad), but its still a profit. Just not one that would allow them to develop models independently of VAG.

Regards

Scaff

 

[Poverty]

Meaning that they wouldnt be able to survive without VAG hence them NOT making VAG any money like I said.

 

[Scaff]

Meaning that they wouldnt be able to survive without VAG hence them NOT making VAG any money like I said.

Sorry Poverty but you seem to have forgotten exactly what you said, which was...

No that is wrong, lambo are making money, they just havent turned a profit for VAG as of yet, and they also have a lawsuit or two to worry about aswell.

...you quite clearly said that they were making money, but not a profit.

Would Lambo be able toi survive without VAG's assistance, well that very much would depend on who bought them and how much investment would be involved (and any sale would most certainly be dependent on just that happening).

An irrelivent point however as you stated that "they just havent turned a profit for VAG as of yet", which is n ot true, they have made a profit, just not a big enough one.

Regards

Scaff

 

[Dave A]

Meaning that they wouldnt be able to survive without VAG hence them NOT making VAG any money like I said.

But they did make VAG money, it just wasn't much. They didn't lose VAG any money put it that way. Just because they didn't make enough to survive independantly that doesn't mean they didn't make money.

 

[Poverty]

More money has gone into lambo than VAG have got in return. I see that as them not making VAG a profit. The VAG boss himself said it will be a couple more years untill lambo will be self sufficient

 

[Scaff]

More money has gone into lambo than VAG have got in return. I see that as them not making VAG a profit. The VAG boss himself said it will be a couple more years untill lambo will be self sufficient

Ahhh I get what you are saying now.

To be fair the figures I gave also came from VAG, as strictly speaking Lambo do make a profit. Development 'loans' within shared companies are tricky things to work out, as while plenty of money has gone to Lambo from the central fund, a fair bit of info and testing has gone the other way as well (unless you like to believe the Audi R8 has nothing to do with Lambo at all).

As far as VAG are concerned Lambo make a profit and have done so for the last few years (after all I'm sure it does no harm to the share price for Lambo to be seen to turn a profit no matter how small). The question of Lambo having 'repaid' the investment made in them by VAG is a far more complex one and even on the annual reports the VAG group does not give exact figures.

Regards

Scaff

 

[McLaren]

More money has gone into lambo than VAG have got in return. I see that as them not making VAG a profit. The VAG boss himself said it will be a couple more years untill lambo will be self sufficient

Lamborghini is quite self-sufficent on it's own despite what VAG's head seems to think because of the Gallardo. All 300 LP640 Roadster orders are 3/4th filled as well.

To say Lamborghini is not self-sufficent, is utter bull.

 

[1X83Z]

I cant see them selling lamborghini, but then again they dont actual make money of lamborghini so maybe...

Why would you say that? Lamborghini is extremely profitable:

The £117,000 Gallardo was launched in 2003 and the increased volume it created led to Lamborghini’s first profitable year. From here.

Under the control of the Volkswagen Auto Group, Italian supercar constructor Lamborghini has become a formidable and profitable company. From here.

But since the 1998 acquisition by the Volkswagen Group, the company's fortunes have turned around. At that time, Lamborghini sold a mere 250 units a year worldwide, with profits nowhere in sight. But by last year, annual sales had risen to 1,600, and they should hit about 2,000 in 2006. Today profits are rolling in on the strength of new models. From here.

Thanks to the Gallardo, Lamborghini had it’s most profitable year ever last year, selling 1,598 cars worldwide. From here.

The brand makes money - loads of it.

 

[Poverty]

Seems like the above two posters havent read the rest of the thread.

 

[McLaren]

Lamborghini is quite self-sufficent on it's own despite what VAG's head seems to think because of the Gallardo. All 300 LP640 Roadster orders are 3/4th filled as well.

To say Lamborghini is not self-sufficent, is utter bull.

Why would you say that? Lamborghini is extremely profitable:

The £117,000 Gallardo was launched in 2003 and the increased volume it created led to Lamborghini’s first profitable year. From here.

Under the control of the Volkswagen Auto Group, Italian supercar constructor Lamborghini has become a formidable and profitable company. From here.

But since the 1998 acquisition by the Volkswagen Group, the company's fortunes have turned around. At that time, Lamborghini sold a mere 250 units a year worldwide, with profits nowhere in sight. But by last year, annual sales had risen to 1,600, and they should hit about 2,000 in 2006. Today profits are rolling in on the strength of new models. From here.

Thanks to the Gallardo, Lamborghini had it’s most profitable year ever last year, selling 1,598 cars worldwide. From here.

The brand makes money - loads of it.

Seems like the above two posters havent read the rest of the thread.

Your post was the only thing we needed to read to see was still, virtually wrong.

And I was not talking about the profits made.
If you think Lamborghini can not sustain on it's own, unlike what VAG says, you do not know very well anything on the company.

 

[Scaff]

If you think Lamborghini can not sustain on it's own, unlike what VAG says, you do not know very well anything on the company.

Yes and no.

Lamborghini is capable of existing in its own right as a manufacturer in the short term, its annual profit line of around 4 million Euros (approx £3million or $1.5million) would allow that.

What would cause the problems to begin would be the development of new models (which has to happen at some point), which Lamborghini simply is not profitable enough to do on its own. $1.5 million a year is not even close the figures involved. Even Ferrari, whose annual profit in 2005 was 157 million Euros, still looks to the FIAT group for assistance from time to time.

Long term and with replacement models a totally independent Lamborghini could also run into serious issues with the expectations of its new customer base. These (almost all conquest customers) have come to expect a Lamborghini to have Audi levels of build quality and reliability, something that as an independent they would struggle to maintain.

You need to keep in mind how serious an issue product development and replacement will be to the companies future, if the new breed of Lambo owner abandons the company they will be in serious trouble. Remember it was with an serious old product line, poor reliability and Rod Stewart as the only customer that got them into serious trouble last time.

If VAG do sell off Lamborghini, then the new owners will need to invest some serious money to keep the current development and R&D cycles going and ramp them up come the time for new models.


Regards

Scaff

 

[Poverty]

If lambo do get sold, it will be to porsche. The Lambo SUV is being developed along side porsche, as it was porsche who actually did alot if not most of the development of that chassis. Also is has been rumoured that porsche wants audi and lamborghini.

Like scaff has said, lambo would run into difficulties if it were to become independant, and there arent many manufacturers who could come along and swoop lambo up, with the japanese being the most financially capable of doing so.

But as the VAG boss did say lambo cant sustain themselves at the time being, and it will require the introduction of two more models before it can stand on its own two feet without assistance and favours.(and im sure he knows alot more than us on how lambos doing, as it is his job after all.)

 

[niky]

Porsche doesn't want Lambo under the VAG umbrella... I'd hardly think they'd want it straight under them. The fact that they're trying to build a Porsche supercar to outdo the Veyron underscores the fact that they think that VAG is a bit too crowded at the high end of the pecking order.

RE: development costs: I think VAG has gotten what it needs from Lambo. It's not just a one way street, witness the use of the V10 in Audi, as well as an almost complete port of the Gallardo to Audi with the R8. Parts and chassis sharing helps offset money put straight into Lambo.

But yes, it'll be difficult for Lambo to survive without the vast engineering resources of VAG. It'd take a very firm commitment from whoever buys Lambo to keep it current, plus a hefty amount of parts sourcing from VAG or possibly any other interested automaker.

But then again, VAG already sells its engines to other small makers, as do BMW and Mercedes, so it's not unfeasible that we will still be seeing Lambos for years to come... heck, if Pagani can do it...

-----

The other, less-talked about point is: What now, Bugatti? This is another turning point in the brand's bloody and checkered history. Granted, coachbuilding isn't a bad thing, and with the surplus of noveau rich supporting the insanely-overpriced-automobile industry, they might find a place for themselves yet... and besides, when I think Bugatti, I still think of elegant, classical coachwork, like this:

And not the insanely ugly (but undeniably distinct) Bugatti "supercars". The Veyron may be compelling in its looks, but I've always had issue with the "styling for styling's sake" approach that compromised its development, and famously cost VAG so much money.

 

[harrytuttle]

If Porsche is to be the top of VAG's performance cars, then that really does leave Bugatti in a strange place, especially considering that's the title they just had. Coachbuilding alone doesn't seem worthy of their existence; it not nearly enough work for such a brand. Perhaps if they became more of the Aston Marton/Ferrari 599 competitor? That allows Bugatti to be free with coachbuilding, but also building high-end GT cars (kind of like the Atlantique). It also allows Porchse to pursue more hardcore cars, competing directly with the Enzo & F430, and not having to create a 4-door sedan-thing (and perhaps dropping the Cayenne).

Lamborghini? I wish Pagani had more money. They're the only one I can think of that would understand the company, but that may be too much like buying their own twin brother.

 

[exigeracer]

around 4 million Euros (approx £3million or $1.5million)

Unless I misunderstood your wording:

4million Euros = $5million = £2.5million

 

[Scaff]

Unless I misunderstood your wording:

4million Euros = $5million = £2.5million

Opps my bad


Scaff

 

[1X83Z]

Seems like the above two posters havent read the rest of the thread.

I've read the entire thread. No matter what you consider to be a profit, the articles I provided that state that Lamborghini is unequivocally making a profit should provide adequate evidence that Lamborghini is, unequivocally, making a profit, and I know you can't provide any evidence to the contrary.

 

[Poverty]

I can make a profit selling lemonade on the street corner, would I still be able to survive? And its not like I would have any overheads to pay for.