How do companies like Bugatti, Rimac and other supercars make money?

Question

Given that they only produce a handful of cars a year, and sell them for $2-3mil, how do they still make enough profit to cover all expenses?

In: 6

Answer 1

Bugatti, rimac, Lamborghini, Porsche, and Ducati are all part of Volkswagen group. Individually these brands don’t strictly need to be self sustaining or profitable, but they do need to maintain value to the company. As others point out, the luxury mark up helps create profit margins, but what is missing is shared resources to reduce the cost of development.

There’s also a notion of “halo” products, the Ford GT is an example, where a company will dump resources into developing a product they can’t possibly make a profit on in order to A) get attention from the public and B) take lessons learned and apply to the rest of their products.