Bugatti halts plan for new Chiron supercar due to Covid-19 crisis

Bugatti Automobiles SAS has put on hold plans for a second model to flank the Chiron supercar ahead of parent Volkswagen AG’s annual investment review next month.

The decision was prompted by the damage inflicted on the car industry by the Covid-19 pandemic, Bugatti chief Stephan Winkelmann said in a Bloomberg TV interview. Despite the outbreak, the carmaker expects to generate record revenue this year, Winkelmann said.

“We had talks about a second-model lineup," Winkelmann said. “This was now blocked due to the coronavirus crisis; we’re not talking about what’s coming next."

Well-heeled supercar buyers are less exposed to the economic impact of the coronavirus crisis, but niche manufacturers built around hulking combustion engines like Bugatti or Italian peer Pagani Automobili SpA face increasing scrutiny due to tightening emission regulations in key markets. At the same time, the virus-induced market downturn has made it harder to justify shelling out development costs for cars that can travel north of 300 miles per hour.

The year 2020 “may be the best year ever" for the Molsheim, France-based boutique manufacturer even as the virus crisis held back growth, Winkelmann said. The robust order book through next year “gives us peace of mind," he said at the presentation of a new Chiron version dubbed Pur Sport that sells for a net price of 3 million euros ($3.5 million).

All cars to be produced this year and between 70% and 80% of planned output in 2021 have already been sold, according to Winkelmann.

Bugatti’s future is clouded by a possible change of ownership. Volkswagen is considering selling the company to Rimac Automobili, people familiar with the matter said last month. VW’s Porsche unit holds a 15.5% stake in the Croatian electric-supercar startup.

Winkelmann declined to comment on the report.

VW, the world’s bestselling automaker, will review spending plans at the end of November. Pressure on budgets is set to surge after the Covid-19 outbreak shattered the industry and dampened economic growth worldwide. Under the current five-year budget, Volkswagen has earmarked 33 billion euros through 2024 for electric vehicles to build the industry’s largest fleet of purely battery-powered cars.