Saturday, January 18, 2014

Car crash economics

An excerpt from Andrew Frankel's Road Cars column,
MotorSport Magazine, December 2013, page 40.

"Fascinating if somewhat gruesome reading this month from Bernstein Research, in the form of the greatest loss-making model lines among European car manufacturers. Way out in front is the original Smart ForTwo which between 1997 and 2006 managed to lose Daimler-Benz a simply extraordinary ₤ 2.8 billion.  More staggering still is that this adds up to ₤ 3782 per vehicle, approximately half the car's retail price at the time.  

Then again, if you care to add up losses on a per-vehicle basis the Bugatti Veyron is in a league all by itself, unapproached I suspect by any other car in history. If you thought ₤ 1 million was a lot to ask for a  mere car, consider that for everyone sold, Volkswagen has shouldering a loss of  3.9 million."

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