Formerly part of the Volkswagen Group, which owns iconic brands like Lamborghini, Bentley, and Ducati. Indeed, Porsche (the corporation which controls Volkswagen) still holds a 24% stake in the holding that controls Bugatti. Thus, the brand has been spun out from Volkswagen. A majority stake of 55% is now owned by the Croatian electric supercar startup Rimac.
| Detail | Description |
|---|---|
| Brand | Bugatti Automobiles S.A.S. |
| Ownership Structure | Joint venture |
| Parent Companies | Rimac Group (55% stake), Porsche AG (45% stake) |
| Joint Venture Formation Date | November 2021 |
| Founding Date | 1909 (original Bugatti) |
| Founders | Ettore Bugatti |
| Headquarters | Molsheim, Alsace, France |
| Primary Business | Designing and manufacturing high-performance luxury sports cars |
| Strategic Goals | Expanding product offerings, enhancing technological innovation, maintaining exclusivity and luxury brand image, and promoting sustainability |
Additional Ownership Details
- Corporate Structure and Ownership: Bugatti Automobiles S.A.S. is owned by a joint venture between Rimac Group and Porsche AG. As of November 2021, Rimac Group holds a 55% stake, while Porsche AG holds a 45% stake in the newly formed company Bugatti Rimac. This joint venture leverages the strengths of both Rimac’s electric technology and Porsche’s extensive automotive expertise to drive Bugatti’s future innovations.
- History and Evolution: Bugatti was originally founded in 1909 by Ettore Bugatti in Molsheim, France. The brand became renowned for its high-performance cars and elegant designs. However, it faced financial difficulties and ceased operations in the mid-20th century. Bugatti was revived several times before Volkswagen AG acquired the brand in 1998, establishing Bugatti Automobiles S.A.S. in Molsheim, France. Under Volkswagen’s ownership, Bugatti produced iconic models like the Veyron and Chiron, setting new standards for performance and luxury. In 2021, Volkswagen transferred Bugatti to the new joint venture with Rimac and Porsche, marking the beginning of a new era for the brand.
- Business Model and Revenue Streams: Bugatti operates a luxury automotive business model focused on the design, manufacturing, and sale of high-performance sports cars. The company generates revenue through:
- Vehicle Sales: Selling ultra-luxury, high-performance sports cars such as the Chiron, Divo, and upcoming models under the new joint venture.
- Customization and Bespoke Services: Offering personalized customization options for clients, allowing for highly individualized vehicles.
- Merchandising and Brand Licensing: Licensing the Bugatti brand for luxury merchandise and collaborations with other high-end brands.
- Key Products and Innovations: Bugatti’s product lineup includes some of the most advanced and exclusive sports cars in the world. Key models include:
- Bugatti Veyron: Known for being one of the fastest production cars in the world upon its release.Bugatti Chiron: Successor to the Veyron, pushing the boundaries of performance with a top speed of over 300 mph.Bugatti Divo: A limited-edition hypercar focused on agility and handling.
- Technological Innovation: Bugatti is at the forefront of automotive innovation, focusing on maximizing performance through cutting-edge technology. This includes:
- High-Performance Engines: Development of powerful W16 engines with advanced turbocharging systems.Lightweight Materials: Use of carbon fiber and other advanced materials to reduce weight and improve performance.Electric and Hybrid Technology: Leveraging Rimac’s expertise in electric powertrains to develop next-generation Bugatti models.
- Brand Positioning and Marketing: Bugatti positions itself as the pinnacle of automotive luxury and performance. The brand’s marketing strategy includes:
- High-Profile Launch Events: Unveiling new models at prestigious automotive shows and exclusive events.Collaborations and Partnerships: Partnering with other luxury brands and high-profile individuals to enhance brand prestige.Digital and Social Media: Engaging with enthusiasts and potential clients through digital platforms and social media, showcasing the brand’s innovation and exclusivity.
| Aspect | Description | Analysis | Examples |
|---|---|---|---|
| Products and Services | Bugatti is a luxury automobile manufacturer known for producing high-performance sports cars. The company’s flagship product is its line of hypercars, including models like the Bugatti Chiron and Bugatti Veyron. Bugatti offers customization options for its vehicles, allowing customers to personalize their cars to their preferences. | Bugatti’s core product line consists of high-performance hypercars, known for their engineering excellence and speed. The company offers customization options, catering to the exclusivity and personalization desires of its wealthy clientele. Bugatti’s reputation is built on delivering automotive masterpieces. | High-performance hypercars (e.g., Bugatti Chiron, Bugatti Veyron), customization options for personalization, reputation for automotive excellence and exclusivity. |
| Revenue Streams | Bugatti generates revenue primarily through the sale of its luxury hypercars. These cars command extremely high price tags, contributing significantly to the company’s revenue. Additionally, Bugatti may earn income through limited edition models, bespoke customizations, and collaborations with partners. | The main revenue source is the sale of luxury hypercars, which come with exceptionally high price points. Limited edition models and bespoke customizations offer opportunities for additional revenue. Collaborations with partners may also contribute to income. Bugatti’s focus on exclusivity and craftsmanship drives its premium pricing strategy. | Revenue from the sale of luxury hypercars (extremely high price points), limited edition models, bespoke customizations, collaborations with partners. Premium pricing strategy based on exclusivity and craftsmanship. |
| Customer Segments | Bugatti targets an exclusive customer base consisting of high-net-worth individuals and collectors who seek the pinnacle of automotive engineering, luxury, and performance. The brand appeals to automotive enthusiasts, collectors, and aficionados who value craftsmanship, precision, and rarity. | Bugatti’s customer segments include high-net-worth individuals, collectors, and enthusiasts with a deep appreciation for automotive excellence, luxury, and performance. The brand’s appeal lies in its craftsmanship, precision, and rarity, attracting customers who value exclusivity and the ultimate driving experience. | High-net-worth individuals, collectors, automotive enthusiasts valuing craftsmanship and precision, customers seeking exclusivity and the ultimate driving experience. |
| Distribution Channels | Bugatti distributes its hypercars through a network of authorized dealerships and showrooms located in key regions worldwide. The company also engages in exclusive events, exhibitions, and auto shows to showcase its vehicles to potential customers and enthusiasts. Bugatti’s online presence provides information and engagement opportunities for a global audience. | Distribution channels encompass authorized dealerships and showrooms in strategic global locations. Exclusive events, exhibitions, and auto shows allow Bugatti to present its vehicles to potential buyers and enthusiasts. The brand maintains an online presence to provide information and engage with a broader global audience. A combination of physical presence and digital engagement supports Bugatti’s marketing and sales efforts. | Distribution through authorized dealerships and showrooms globally, exclusive events, exhibitions, and auto shows for showcasing vehicles, online presence for information and engagement with a global audience, a hybrid approach combining physical and digital channels for marketing and sales. |
| Key Partnerships | Bugatti collaborates with select luxury brands, designers, and artists for special editions and bespoke customizations, adding unique value to its hypercars. Partnerships with dealerships and service centers ensure customer support and maintenance for Bugatti owners. The company may also partner with automotive publications and influencers for marketing and promotional activities. | Collaborations with luxury brands, designers, and artists enhance the exclusivity and customization options for Bugatti’s hypercars. Partnerships with dealerships and service centers provide essential customer support and maintenance services. Collaborations with automotive publications and influencers contribute to marketing and promotional efforts, reaching a wider audience. Bugatti’s partnerships add value to the brand’s offerings and customer experience. | Collaborations with luxury brands, designers, and artists for special editions and bespoke customizations, partnerships with dealerships and service centers for customer support and maintenance, collaborations with automotive publications and influencers for marketing and promotional activities, value-added partnerships enhancing the Bugatti brand and customer experience. |
| Key Resources | Bugatti’s key resources include its team of automotive engineers and designers, manufacturing facilities for crafting hypercars, a network of authorized dealerships and service centers, a global brand reputation for luxury and performance, a portfolio of iconic hypercar models, and a commitment to innovation and craftsmanship. | Bugatti’s team of skilled engineers and designers drive product development and innovation. Manufacturing facilities produce the brand’s iconic hypercars. An extensive network of authorized dealerships and service centers ensures customer support. Bugatti’s global brand reputation is built on luxury and performance excellence. The portfolio of iconic hypercar models establishes its legacy. A commitment to innovation and craftsmanship is the foundation of Bugatti’s success. | Skilled engineers and designers driving innovation, manufacturing facilities producing iconic hypercars, a network of authorized dealerships and service centers ensuring customer support, a global brand reputation for luxury and performance, a portfolio of iconic hypercar models, a commitment to innovation and craftsmanship. |
| Cost Structure | Bugatti incurs costs related to research and development (R&D) for hypercar innovation and engineering excellence, manufacturing and production of hypercars, marketing and advertising expenses for brand promotion, employee salaries and benefits for a skilled workforce, dealer network support and maintenance costs, bespoke customization expenses, and potential regulatory and compliance costs. | Costs related to R&D are essential for hypercar innovation and engineering excellence, positioning Bugatti as a leader in the luxury automotive segment. Manufacturing and production costs cover the creation of hypercars. Marketing and advertising expenses promote the brand’s exclusivity and performance. Employee salaries and benefits support a skilled workforce. Dealer network support and maintenance costs ensure customer satisfaction. Bespoke customization expenses cater to individual customer preferences. Regulatory and compliance costs may arise to meet legal and industry requirements. | Costs related to research and development (R&D) for hypercar innovation, manufacturing and production expenses, marketing and advertising costs, employee salaries and benefits, dealer network support and maintenance, bespoke customization expenses, potential regulatory and compliance costs. |
| Competitive Advantage | Bugatti’s competitive advantage lies in its legacy of engineering excellence and craftsmanship, resulting in iconic hypercar models. The brand’s exclusivity and rarity, premium pricing strategy, and emphasis on customization cater to a discerning and affluent clientele. Collaborations with luxury brands and artists enhance the brand’s appeal. Bugatti’s commitment to innovation and performance positions it as a leader in the luxury automotive segment. | Bugatti’s legacy of engineering excellence and craftsmanship has led to the creation of iconic hypercar models, driving its competitive advantage. The brand’s exclusivity, rarity, premium pricing strategy, and customization options cater to an affluent and discerning clientele. Collaborations with luxury brands and artists enhance Bugatti’s appeal and cultural relevance. The brand’s commitment to innovation and performance maintains its leadership position in the luxury automotive segment. | Legacy of engineering excellence and craftsmanship, iconic hypercar models, exclusivity and rarity, premium pricing strategy, customization options, collaborations with luxury brands and artists, commitment to innovation and performance, competitive advantage within the luxury automotive segment. |
Inside the Volkswagen’s family of brands before the Bugatti’s spin-off
The Volkswagen Group is a massive car maker comprising three main types of brands: volume, premium, and sport.
Before Bugatti was spun off from the group, it was part of the premium brands, just like Lamborghini.
Yet, by 2021, things changed.
We must look at how Volkswagen Group ownership is organized to understand this change.
As I explained, the Volkswagen Group is a massive car maker, which is 2021, generated over €250 billion in revenue across its various brands.
The Volkswagen Group is owned by the Porsche family via the Porsche Automobil Holding SE.
This holding company owns a majority stake in the group (31.4%) and a controlling stake, meaning they can exercise a majority voting power on strategic decisions (53.3%).
The Porsche family, thus, spun off Bugatti from Volkswagen, and while the family kept an essential stake in the brand, a new joint venture was created to manage it.
Inside the Bugatti’s joint venture after the spin-off
As explained by Rimac Group, the new holding that controls Bugatti, the newly-formed Rimac Group will be the major shareholder with a 55% stake.
Mate Rimac will retain his original shareholding in Rimac Group at 37%, with Porsche at 24%, Hyundai Motor Group doing the same at 12%, and other investors at 27%.
Why this re-organization?
Well, Bugatti is going through a rehaul, where its combustion engine will, over time, be supplanted by an electric engine.
And Rimac, which innovates in electric sports cars, is leading the process.
Thus, trying to transform a classic combustion sports car company into an electric sports car player.
From here, the spin-off from Volkswagen Group and the new development within Rimac Holding.
How does the joint venture work?
Apparently, given the current setup of the joint venture, it seems that the Porsche family (which also controls The Volkswagen Group) is the main shareholder.
The family holding company holds a 24% stake in the new holding company Rimac Group while holding another 45% stake in the joint venture Bugatti | Rimac.
On their hand, Rimac Group will own 100% of the technologies used to revamp Bugatti’s brand.
Thus the joint venture works in two directions. The Porsche family keeps tight control over the Bugatti brand.
While the companies involved in the joint venture will instead have the ownership of the technologies developed throughout the joint venture to revamp the Bugatti brand.
History of Bugatti
Bugatti is a French maker of luxury sports cars that are some of the fastest in the world. The company – which is formally known as Bugatti Automobiles S.A.S. – was founded in 1998 as a subsidiary of the Volkswagen Group.
However, the company’s heritage extends back to 1909 when Ettore Bugatti first established the Bugatti automobile brand in Molsheim, France. The brand’s spiritual home (and indeed the company headquarters) remains in Molsheim today, but much has transpired since it was first started over a century back.
Founding
Ettore Bugatti was an Italian-born industrial designer and a noted perfectionist who desired nothing but the best for his cars, customers, company, and himself.
It was an exciting time for the automotive industry in the early twentieth century, but Bugatti was a visionary who started making cars that were small, light, and nimble. These were well suited to the racetrack, with a Bugatti finishing second at the 1911 French Grand Prix.
Many of these cars embodied aesthetic values that were inspired by Bugatti’s father Carlo – a well-known artist, designer, and silversmith whose furniture is especially well-known. The Type 13 Brescia, for example, incorporated an egg-shaped radiator grill based on Carlo’s belief that the shape of an egg was nature’s most perfect form.
Pivot to passenger vehicles
Bugatti then turned his attention to passenger vehicles with the Type 41 Royale.
The Type 41 Royale was a powerful and luxurious vehicle (even by today’s standards) and was marketed to royalty, aristocrats, and heads of state. But in the post-Depression era of the 1930s, only 3 were ever sold from a production run of 6 and it became a commercial failure.
With a surplus of parts, the Type 41’s engine was later repurposed into one of the world’s first modern, high-speed trains. Known as the Autorail Bugatti, the train featured Bugatti’s unmistakable design principles and could reach speeds of 172 km/h.
Post-World War II
Then part of Germany, Bugatti’s Molsheim factory was destroyed during the war, and, in any case, the company lost access to the property.
Bugatti himself planned to start a factory in Paris and had several new models in the pipeline, but he died in August 1947. The company started on a long and slow decline thereafter and made its last appearance as a functional business at the Paris Motor Show in 1952.
Revival
After several failed attempts to revive the brand in the 50s and 60s, entrepreneur Romano Artioli acquired the brand in 1987 and commissioned the construction of a new factory in Modena, Italy.
The company became known as Bugatti Automobili S.p.A. and debuted a super sports car called the EB 110 soon after. However, Artioli only managed to sell 140 cars before unfavorable economic conditions forced him to file for bankruptcy.
Volkswagen acquisition
Volkswagen acquired Bugatti in 1998 for $50 million, and in 2000, premiered the EB 16/4 Veyron at motor shows in Paris, Geneva, and Detroit.
Named after French racing driver Pierre Veyron, the eight-liter, W-16 Veyron would later usher in a new era in the development of supercars. It also positioned the Bugatti brand once more as one that embodied Ettore Bugatti’s painstaking attention to detail and bold ambition.
When the last Veyron was sold in 2015, Bugatti revealed a new mid-engine, two-seater model called the Chiron.
Joint-venture with Rimac
In November 2021, Bugatti Automobiles S.A.S. became part of Bugatti Rimac, a joint venture between Croatian EV manufacturer Rimac Group and Porsche AG. The JV would be headed by Rimac founder and CEO Mate Rimac with his company taking a 55% stake in Bugatti. Porsche, as a strategic shareholder, took the remaining 45%.
A Rimac representative noted that “Bugatti and Rimac will both continue as separate respective brands, retaining existing production facilities and distribution channels”. Bugatti in particular would also benefit from Rimac’s expertise in building electric supercars,
Key takeaways
- Bugatti is a French maker of luxury sports cars that are some of the fastest in the world. The company – which is formally known as Bugatti Automobiles S.A.S. – was founded in 1998 as a subsidiary of the Volkswagen Group.
- The company’s heritage extends back to 1909 when Ettore Bugatti first established the Bugatti automobile brand in Molsheim, France. Bugatti’s early vehicles were successful on the track, but the Type 41 Royale was a commercial failure and the company slid into decline after Bugatti himself died in 1947.
- The Bugatti brand sat mostly idle for 40 years before it was revived by entrepreneur Romano Artioli. After he went bankrupt, Volkswagen acquired it in 1998 before it was purchased by Croatian EV maker Rimac as part of a joint venture.
Key Highlights
- Bugatti’s History and Acquisition by Volkswagen Group:
- Bugatti, formally known as Bugatti Automobiles S.A.S., was founded in 1998 as a subsidiary of the Volkswagen Group.
- The brand’s origins trace back to 1909 when Ettore Bugatti established the Bugatti automobile brand in Molsheim, France.
- Bugatti initially focused on small, light, and nimble cars suited for racing, with notable success at events like the 1911 French Grand Prix.
- Ettore Bugatti’s attention later turned to passenger vehicles, culminating in the creation of the Type 41 Royale, an opulent and powerful car that faced limited commercial success due to economic conditions.
- After World War II, the brand’s decline continued, and it eventually ceased operations in the 1950s.
- Revival and Volkswagen Acquisition:
- Entrepreneur Romano Artioli acquired Bugatti in 1987 and attempted to revive the brand, introducing the EB 110 super sports car.
- Economic challenges led to Artioli’s bankruptcy, and in 1998, the Volkswagen Group acquired Bugatti for $50 million.
- Volkswagen introduced the EB 16/4 Veyron in 2000, marking a resurgence in Bugatti’s presence and innovation in the supercar industry.
- The Veyron, named after French racing driver Pierre Veyron, featured a W-16 engine and garnered attention for its engineering and performance prowess.
- Joint-Venture with Rimac and Porsche:
- In November 2021, Bugatti became part of Bugatti Rimac, a joint venture between Croatian electric vehicle manufacturer Rimac Group and Porsche AG.
- The joint venture was led by Rimac founder and CEO Mate Rimac, who owned a 55% stake in Bugatti Rimac.
- Porsche held a strategic 45% stake in the joint venture, indicating its involvement in shaping Bugatti’s future direction.
- Both Bugatti and Rimac maintained their separate brand identities, production facilities, and distribution channels.
- Electric Future and Expertise:
- The joint venture with Rimac positioned Bugatti to leverage Rimac’s expertise in building electric supercars.
- Bugatti’s move toward electric power aligns with the broader industry trend and showcases the brand’s commitment to innovation while maintaining its luxury and performance ethos.
- Ownership Structure and Control:
- The ownership structure of Bugatti changed significantly, with Porsche holding a 45% stake and Rimac Group owning a controlling 55% stake in the Bugatti Rimac joint venture.
- The Porsche family, which also controls the Volkswagen Group, holds sway over Bugatti’s future direction through its involvement in the joint venture.
Read Also: Tesla Business Model, Tesla SWOT Analysis, Transitional Business Models, Tesla Mission, And Vision.
Related To the Volkswagen Group
Related Onwership Case Studies
