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.
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.
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.
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.
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 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,
- 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.
- 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:
- 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.