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The Bugatti Chiron Super Sport is a supercar designed by Bugatti.
Bugatti
Volkswagen’s
Category of expensive sports cars
Porsche
has decided to launch a joint venture with Rimac, a high-tech electric car firm, in which its high-end Bugatti marque will be included. Porsche already has a direct 24 percent ownership in Rimac. The announcement on Monday backs up what the automaker had suggested.
Volkswagen
earlier this year, and will initially construct two hypercar models—the Bugatti Chiron and the all-electric Rimac Never—under the new company’s banner.
The move will be a significant step forward for Bugatti, which has a long history with combustion engines. Bugatti-Rimac will be headquartered in Zagreb, Croatia, and is expected to begin operations in the fourth quarter of 2021, pending antitrust approval. Rimac will own a majority of Bugatti-Rimac with a 55 percent interest, while Porsche will own 45 percent. Volkswagen will hand over Bugatti to the joint venture, which will be led by Mate Rimac, the company’s creator. All Bugatti models will be manufactured at Bugatti’s current facility in Molsheim, France.
“We are combining Bugatti’s great competence in the hypercar market with Rimac’s tremendous innovative strength in the extremely promising field of electric mobility,” stated Oliver Blume, chairman of the executive board at Porsche.
The new business will benefit from Bugatti’s rich history, iconic goods, dedicated customer base, and global dealer network. Rimac also offers fresh development and organizational methodologies in addition to technology.” While the news was expected, it is positive because it allows Volkswagen management to concentrate on its core brands, Audi and Porsche. Bugatti was a non-core and distracting brand, so keeping it in the joint venture will help the German automaker grow. This disposal, however, should not be interpreted as the commencement of a split. “We should caution investors hopeful of a large corporate reorganization at VW Group or a separation of assets, however, that such an undertaking would be challenging given corporate governance obstacles,” said Tom Narayan, an analyst at RBC Capital Markets. It may be argued that VW’s focus on too many things at once resulted in underinvestment in its truck operations. We see VW Group’s efforts to focus attention on its core electrification strategy across its key brands—VW Brand, Porsche, and Audi—as a net positive.” Rupert Steiner can be reached at rupert.steiner@dowjones.com./n
