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?
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You need to consider a super-car brand is not an entity on its own. But a simply a brand of an even larger car company with many purposes.
One of these is marketing. Setting records, the brand can act entirely as marketing for the main brand. Millions on a few cars, compared to billions on marketing campaigns.
Another is these cutting edge technologies can act as R&D units and as such can get tax incentives on a much more flexible and faster acting company structure.
Finally, the list price is not often the only way a company makes money. These cars are often bundled with services such as very expensive servicing, tuning and all manner of extras and personalisations. Finally there’s apparel and merch. Caps and t-shirts with Ferrari (fiat/Chrysler) and Lamborghini (VW) may be more profitable than the car selling business.
You need to consider a super-car brand is not an entity on its own. But a simply a brand of an even larger car company with many purposes.
One of these is marketing. Setting records, the brand can act entirely as marketing for the main brand. Millions on a few cars, compared to billions on marketing campaigns.
Another is these cutting edge technologies can act as R&D units and as such can get tax incentives on a much more flexible and faster acting company structure.
Finally, the list price is not often the only way a company makes money. These cars are often bundled with services such as very expensive servicing, tuning and all manner of extras and personalisations. Finally there’s apparel and merch. Caps and t-shirts with Ferrari (fiat/Chrysler) and Lamborghini (VW) may be more profitable than the car selling business.
Rimac in particular produce electrical and electronic components for a wide variety of electric car manufacturers. So even if the Hypercars only make small percentile profits their bread and butter will be from parts sales.
Rimac in particular produce electrical and electronic components for a wide variety of electric car manufacturers. So even if the Hypercars only make small percentile profits their bread and butter will be from parts sales.
Bugatti sells about 100 cars a year, so that’s about $200-300m in revenue. Production costs are high, development costs are high so it’s true that there may not be much product margin.
But nowadays, Bugatti is owned by VW Group, so gets some benefits by relying on assistance from their parent company. R&D may be partially shared with Lamborghini or Bentley. They can buy steel, aluminum, and other components/materials in larger quantities with their sister companies (Lambo, Audi, Bentley, VW, etc.).
There are also likely large licensing fees collected for all sorts of Bugatti-logo apparel, toys, etc.
Rimac in particular produce electrical and electronic components for a wide variety of electric car manufacturers. So even if the Hypercars only make small percentile profits their bread and butter will be from parts sales.
Bugatti sells about 100 cars a year, so that’s about $200-300m in revenue. Production costs are high, development costs are high so it’s true that there may not be much product margin.
But nowadays, Bugatti is owned by VW Group, so gets some benefits by relying on assistance from their parent company. R&D may be partially shared with Lamborghini or Bentley. They can buy steel, aluminum, and other components/materials in larger quantities with their sister companies (Lambo, Audi, Bentley, VW, etc.).
There are also likely large licensing fees collected for all sorts of Bugatti-logo apparel, toys, etc.
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.
Bugatti sells about 100 cars a year, so that’s about $200-300m in revenue. Production costs are high, development costs are high so it’s true that there may not be much product margin.
But nowadays, Bugatti is owned by VW Group, so gets some benefits by relying on assistance from their parent company. R&D may be partially shared with Lamborghini or Bentley. They can buy steel, aluminum, and other components/materials in larger quantities with their sister companies (Lambo, Audi, Bentley, VW, etc.).
There are also likely large licensing fees collected for all sorts of Bugatti-logo apparel, toys, etc.
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.
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