Volkswagen flaunts supercars at Geneva auto show

Wed Mar 2, 2016 4:45am EST
 
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By Andreas Cremer

GENEVA (Reuters) - Bugatti unveiled the world's fastest road car at the Geneva auto show this week: the 2.4 million euro ($2.6 million) Chiron with a 1,500 horsepower engine that can hit 420 kilometers per hour.

Also on display is the Lamborghini Centenario, almost modest by comparison with a 770 horsepower engine, a price tag of 1.75 million euros and a top speed of around 350 kilometers per hour.

One thing the supercars have in common is that they are both made by Volkswagen (VOWG_p.DE: Quote), the German carmaker facing billions of dollars of fines and years of damage limitation after cheating diesel emissions tests in the United States.

For some analysts, the extravagance is misplaced at a time Europe's largest carmaker has been forced to postpone its 2015 results while it tries to put a price on the emissions scandal, and its core VW brand steps up cost saving plans.

Volkswagen (VW) has pledged to pull funding from all non-essential projects and Chief Executive Matthias Mueller said in October it would examine the profit contribution of each of its over 310 models as part of the company's belt tightening.

"VW must decide what their future focus should be. That entails the question whether the super-luxury business is needed?" said Stefan Bratzel, head of the Center of Automotive Management think-tank near Cologne. "This cannot be the future direction of VW."

While the company does not publish a detailed breakdown of how much it costs to develop and produce its supercars, nor whether they contribute to the bottom line, past research has argued that they are loss-leaders.

Bernstein Research in 2013 said the Chiron's predecessor - the Veyron - was one of the six "most loss-making European cars of modern times", estimating the loss per car at nearly five times its original sale price of 1 million euros.   Continued...

 
The new Bugatti Chiron car is presented ahead of the 86th International Motor Show in Geneva, Switzerland, February 29, 2016.  REUTERS/Denis Balibouse