Bugatti plots electric four-seater for less than US$1mil

FRANKFURT: Bugatti is looking to broaden its appeal by flanking the €2.5 million (RM11.5mil) Chiron supercar with a slightly more accessible alternative.

The potential second model line would be an electric-powered grand tourer or crossover that could seat up to four people and would cost between €500,000 and €1 million (between RM2.3mil and RM4.6mil).

The French boutique manufacturer is in discussions within parent Volkswagen AG about the investment, Bugatti chief executive officer Stephan Winkelmann said in an interview at Bloomberg’s office in Berlin.

"The industry is changing fundamentally, and we have to address what opportunities there are to develop Bugatti as a brand going forward,” Winkelmann said. He acknowledged that it’s a "hard fight” to secure funds for such a niche project.

The plan shows how even automakers decoupled from the day-to-day realities of transport are grappling with the gradual end of the combustion-engine era. For Bugatti, it’s less about emissions and more about the changing definition of progress and innovation.

Winkelmann, who previously ran Volkswagen’s Lamborghini brand, is trying to make Bugatti viable enough to potentially survive outside the German auto group and head off the risk of being phased out once again. Since the 2015 diesel-cheating scandal, Volkswagen has been taking a closer look at its portfolio amid the growing burden of investing in electric cars and self-driving technology.

Bugatti has long been viewed as prime example of Volkswagen’s engineering extravagance. It was revived under former chairman Ferdinand Piech in 1998 after the brand had largely faded from existence in the 1950s.

Volkswagen rebuilt the Molsheim-based marque around a hulking 16-cylinder engine, rolling out the Chiron’s predecessor in 2005 after a series of development issues.

The elite nameplate offers limited opportunities for sharing parts and technology.

Because of high development costs and low volumes, the Veyron — Bugatti’s first model under VW control — was considered one of the biggest money losers in the auto industry.

Winkelmann said that Bugattiis "earning decent money” these days and that the brand now needs to justify itself with a business case, rather than just engineering feats.

After setting a speed record earlier this year when a Chiron derivative drove faster than 480kph, the executive said the carmaker is done pursuing such performance milestones and is looking to increase its cache as a luxury brand.

Bugatti limited the production run of the Chiron to just 500 vehicles, and fewer than 100 are still up for grabs. It currently crafts some 100 highly customised cars per year.

The addition of a cheaper model would be a massive expansion, with output surging by more than 600 vehicles annually, said Winkelmann, who was a key driver behind Lamborghini’s decision to add the Urus SUV.

Ferrari NV, which has more than tripled in value since its public listing, has become a poster child for the potential of an independent elite car brand and raised interest in potential spinoffs by Volkswagen.

But the recent struggles of Aston Martin Lagonda Global Holdings Plc highlight the challenges in replicating the strategy.

Volkswagen chief executive officer Herbert Diess is pushing the company’s high-end brands to generate better returns and mapped out a plan last year to pool Bugatti in a so-called super-premium group that includes Bentley and Lamborghini. Porsche would lead the division.

"If you look at that combination of brands, I think it would be unique in the auto industry,” Winkelmann said.