Car crash economics

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 (below) 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 every one sold, Volkswagen was shouldering a loss of £3.9 million.

Volkswagen has also had to absorb losses of £1.6 billion for its Phaeton vanity project, though it would be interesting to learn how much of this was offset by money made by the somewhat more successful Bentley Continental range that sits on the same basic platform. Unadjusted, VW wore a loss of £23,500 for every one of the 72,000 Phaetons it built: that has to smart a bit, even for the most successful car company in the world. Other notable disasters included the Fiat Stilo, original Mercedes A-class, Audi A2 and Jaguar X-type.