Bugatti Veyron 16.4 in all its glory!

If there was ever a doubt in the halo effect that accompanies a super car launch… if you ever thought Porsche’s Carrera GT, Lamborghini Reventón, Aston Martin’s One-77, VW’s Phaeton, Mercedes SLR, Acura’s NSX, Nissan’s GT-R, and Audi’s R8 were a waste of space and a money losing venture, you were wrong. VW Group’s crowning achievement is undoubtedly the venerable Bugatti Veyron 16.4.

Acquired in 1998 from Italian entrepreneur Romano Artioli, VW immediately set to work building a successor to the EB110. It was considered by many to be the most sophisticated car of its kind at the time, a trait that followed in VW’s iteration called the Veyron 16.4. Even at its introduction and production start in 2005, VW never intended the Veyron to surpass 300 units. Indeed, the company has said that after 300 are produced, the car will be discontinued. Interestingly, this has not resulted in a static design and the company has continued to pump out alterations including “special editions” and a Gran Sport, replete with a removable roof.

It has been said by many that the Bugatti is the ultimate supercar, not just of today, but also of all time. Those who make that argument point to the jaw-dropping 0-60 mph times under 2.5 seconds and a top speed in excess of 400 KM/hour (250+ mph). Others marvel at the 16-cylinder, 4-turbocharger engine or the 10 radiators onboard. Still others marvel that at full speed, the car runs out of full in 12 minutes and the tires burn to a crisp at 15 minutes. All of that in a rather un-dramatic, but stunning fashion.

It is the combination of those factors, the styling, and the EURO1,000,000+ price tag that make the Bugatti the ultimate halo product for VW Group. What is the halo effect, and why is it so important that VW stands to lose millions of euros for each Veyron produced? Halo products in general are the über-expensive, lower volume, highly publicized products that companies produce to create buzz for the company and the other products sold by that company. Even a low volume company like Porsche can benefit from a halo product because these products do so much to bring status and media coverage. A company that produces a rather low quality product can be perceived as one that more generally produces very high-end products. The company may actually lose money selling the halo product, but these halo products are often considered a marketing cost anyway. Ideally, a company would save massive amounts of money on advertising by introducing a product that is constantly covered by the media.

So it is with the Bugatti Veyron. Associating Bugatti with VW Group and providing otherwise sound business strategy has meant that VW has pushed past Toyota (IN A WEAK MARKET!) to become the number one producer of automobiles in not just Europe, but the entire world with 4.4 million units for the year according to IHS Global Insight.

http://www.autoobserver.com/2009/11/vw-pushes-past-toyota-as-global-production-leader.html

For an example of the aforementioned press coverage, see the following irrelevant, but positive pieces of new coverage:

• http://jalopnik.com/5401978/how-i-found-a-bugatti-veyron-engine-on-a-budapest-street
• http://jalopnik.com/5403061/16-million-bugatti-veyron-crashes-into-texas-lake
• http://jalopnik.com/5388709/bugatti-veyron-parking-fail

Gathered, in part from LeftLane:

Volkswagen says its diesel TDI vehicles are selling well. An impressive 81 percent of Jetta SportWagens were equipped with the TDI, as were 40 percent of Jetta sedans and 29 percent of Touaregs last month. Volkswagen, sales were down 18 percent to 19,027.

Volvo saw a 0.6 percent increase in sales compared to June 2008, though the Swedish marque is still off 35.6 percent for the first six months of the year. The all-new XC60 sold 1,032 units.

Porsche had a disastrous June; just 902 of the automaker’s sports cars left dealer lots, a 66 percent decrease that brought the automaker’s year-to-date sales down 36 percent for the year.

BMW, down 20.1 percent to 16,744.

Maserati, down 47.9 percent to 111.

Mercedes-Benz, down 22.6 percent to 15,155.

Mini, down 21.2 percent to 4,105.

Saab, down 58.4 percent to 779.

Mercedes E-class BlueTec Hybrid

Without a doubt, the EU has become the leader in improving the pollution problem for the automotive sector. Recently the U.S. put in a 27.3 mpg average fleet requirement for 2011. Please see: http://www.nhtsa.dot.gov for the latest information and the impact analysis. But is the change enough to get us on the right track? How exactly do carmakers implement changes in their fleet to address the higher requirements?

The European Union defines specific emissions targets for the following 5 years as the following:

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AMG E-Klasse Limousine

History of AMG

It hasn’t always been the case that AMG was Mercedes’ in-house tuner. 

Check out http://amgmarket.com/amg/the-history-of-amg-mercedes-benz/

for a history of AMG.

Editor’s note: That the iconic, if boxy, Mercedes-Benz G-class has lasted thirty years, virtually unchanged from the exterior, is emblematic of the same sort of fanaticism that follows the 40+ year old Porsche 911. Never a fan of the SUV, the G-class holds a special place in the heart of auto enthusiasts. The true versatility of the vehicle has spanned the globe from the battlefield to the board room. Few cars can make the claim that they have “saved lives”, but between thwarting terrorist attacks and delivering food and medicine to refugee camps. Here’s to another 30 years!!!

A full profile courtesy of Mercedes follows:

The current model range

A full range for fans of the “G”

The model family currently has three body variants (short-wheelbase Station Wagon, long-wheelbase Station Wagon, Convertible), which can be combined with either an economical V6 CDI engine developing 165 kW/224 hp and 540 newton metres, or a powerful 5.5-litre V8 petrol engine with 285 kW/388 hp and 530 newton metres. The flagship G 55 AMG available only as a four-door, long-wheelbase Station Wagon is powered by a supercharged V8-engine developing 373 kW/507 hp. (more…)

Yes, it is the end of February, so it is a bit late for all of this, but Beyond the KM will start trying to post sales figures. The move seems timely since every car sale seems to count a lot more than ever. In fact, we just got an advert from one of the 25 largest US Porsche dealers advertising a “first-time ever” special sale program:

Even Porsche of North Scottsdale is promoting "Big Sales"

BTKM is also working to compile European auto numbers by company over time. We have been actively cataloging sales figures for the last few months courtesy of Newspress.

The ugly
The following manufacturers have reported January 2009 sales figures posted on Leftlane News:

(Note that these seem to be U.S. sales only…December 2008 and overall 2008  sales can be found here.

Audi, down 26.4 percent to 4,722
Mercedes-Benz, down 42.9 percent to 10,433
Saab, down 46.1 percent to 955
Smart, up 177.1 percent to 1,776
Volkswagen, down 11.6 percent to 12,744
Volvo, down 63.8 percent to 2,910

The economy is hurting and more and more carmakers are suffering. Not all are doing poorly, though. Audi, as an example reported record sales for 2008, with over 1,000,000 vehicles sold. Lamborghini, owned by the VW/Audi Group, also posted record sales for 2008. Both companies produce sports cars that retail at over US$100,000.

Let us examine the developments of the last month by automaker:

Porsche. There is no substitute for a strong economy. A poor economy negatively impacted sales at the sports car maker, and even a significantly revised 911 model did not save it from a virtual sales slump. Porsche is tighter with numbers than most companies, but while sales were slowing, the company hopes that new models in 2009 will help it combat slumping sales. A four-door car, the Panamera should hit showroom floors in the first half of 2009, while you can expect to drive a 2009 Boxster/Cayman with revised powertrain as soon as March.

In financial news the company announced the first week of January that they had bought an additional 8.16 per cent stake in VW worth 6.1bn Euro/US$8.2bn. Porsche now owns 50.76 per cent of VW Group but may gain further stake in VW, rising to 75 per cent in coming months (if all goes as planned).  In November, news came out that Germany’s upper house of parliament passed new laws regarding ownership of VW, despite European Commission rulings that such laws were illegal.

In November, the high profit-maker in the world gobbled up a stake, which sent hedge funds scrambled to recover from trading, which briefly left VW as the most valuable company in the world. Porsche’s finance team effectively practiced something called “cornering”. Let us not forget that Porsche is better as an investor than as a carmaker – though they are a damned good carmaker. In 2007, the company made 3.6 billion Euros on investments, and only a paltry 1 billion Euros on cars. At a 12 per cent profit margin, the decision to invest in VW stands financial positioning, and partly seeking a partner with whom to share technology development costs.

Still, everyone is watching the dollars and cents these days. Even Porsche has announced that is it pulling out of the American LeMans series for 2009 – in part. It is pulling the P2 team, but not pulling support for the 911 GT3 RSRs in the GT2 category.

Mercedes-Benz. Mercedes has finally announced the much-anticipated E-class for 2009. The new car replaces the round headlights with more rectangular ones, perhaps in the style of the C-class or a Lexus.

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According to an article on LeftLane News, Chrysler execs are so delusional these days that they think their prime competitors are Mercedes and BMW. WHAT?????????????

Former Toyota executive Jim Press, and current Chrysler Co-President thinks that the company will build itself a few cars that will beat Cadillac at its own game and attempt to take on BMW and Mercedes for sales. RIIIIIGHT! Where’s this plan coming from?

Who’s next? Ferrari? Is Chrysler the next Lamborghini? The next Porsche? If this is the way management at Chrysler plans to act? What’s next for them, making cars that run on petrol? Oh…wait!? Where’s the originality at Chrysler? Better question, where is the R&D??? Perhaps a bailout should be tied to a commitment to change. Now THERE is a novel idea!

Co-President Press claims to want to rebuild Chrysler as a smaller, nimbler company. But he certainly has to see that this means smaller cars, and alternative energy resources. Perhaps imitation is the sincerest form of flattery, but how will they accomplish all of this? You’d love to see the plan, huh?

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This week’s link come to us from the LA Times’ Dan Neil.

The article discusses
LA Times Article

Lamborghini last year launched the ad personum program to provide individually tailored options to their cars. In January 2008, then went a step further by releasing the following:

LAMBORGHINI UNVEILS FASHION INSPIRED TRENDS FOR THEIR
GALLARDO AND MURCIÉLAGO MODELS AT THE DETROIT AUTO SHOW

“Lamborghini is strongly focusing on the Ad Personam personalization program due to the importance of offering customers the widest range of possibilities for individualizing their cars. This allows them the ability to reflect their own personality and style,” states Stephan Winkelmann, president and CEO of Automobili Lamborghini. “Many of our customers take advantage of this program as a tool for owning an even more exclusive Lamborghini.”

For most of the decade now BMW has enjoyed a distinct competitive advantage – at least in the American market. They have offered a four-year, 50,000 mile maintenance-cost-free program called “BMW Ultimate Service”. The service includes free replacement of:

• Brake Pads
• Brake Rotors
• Wiper Blades
• Scheduled Maintenance (as outlined in the owner’s manual)
• Oil Changes/topping up of fluids
• Roadside Maintenance

It’s worth noting that BMW parts are generally well-made, and will not typically require new pads and rotors in this 50,000 miles. Still, it’s nice to know you’re covered. It’s also worth noting what the program does NOT include: tyres and alignment for starters. 

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Apparently the Vatican and Mercedes have teamed up to create an “all-new” car for the Pope. 2 years of development time was spent on developing a “holier-than-thou” paint job called “Vatican Mystic White”. This is reportedly a couple of shades brighter than “Ghostly Anti-Devil White” available on most non-Popemobile Mercedes.

A base G-class starts at 72,000 euros for the cabriolet. But given that 2 years of development and god knows how many gallons of wasted paint and bullet-proof steel went into this SUV, the cost most likely soared past an un-Godly $250,000. Looks like Catholics will need to add a few more dollars to that offering plate this season.

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For your weekend enjoyment: