High Specs Led to Huge Fortwo Losses Stilo's Failure Sent Fiat Into
Total Page：16
File Type：pdf, Size：1020Kb
AUTOMOTIVE NEWS EUROPE AUTOMAKERS Catastrophic failures Daimler, Renault, VW and Fiat cars on list of European industry’s money-losers PAUL MCVEIGH them severe financial difficulties. Others, ing of Europe’s biggest money-losers. [email protected] such as the Bugatti Veyron, Smart ForTwo He did so by looking at the cars’ pro- utomakers from Fiat to Volkswagen and Volkswagen Phaeton, swallowed duction runs, estimated fixed-cost in- Aand Daimler to Renault lost a com- huge sums of money. “The multi-billion vestments and r&d costs. Warburton bined 20 billion euros developing and losses that we believe were suffered by and his team then estimated the likely price realization and contribution mar- selling models ranked in a top 10 list of the Fiat Stilo, Peugeot 1007 and Jaguar gin per car, as well as estimated fixed- the European auto industry’s most “cat- X-Type were severe trauma for the com- asset write-downs. astrophic” failures of the past 15 years. panies concerned – and in some cases Some of the cars that flopped, such as nearly sank them,” Bernstein Research Over the next four pages is the top 10, the Fiat Stilo, Peugeot 1007 and Jaguar said in a report. Max Warburton is the ranked by estimated total losses during X-Type, caused the companies that built financial analyst who created the rank- each car’s life cycle. High specs led to huge ForTwo losses The first-generation Smart ForTwo had achieved its planned annual volume of specifications normally seen on super- 200,000 units. The first-generation cars. Mercedes-Benz made the mistake ForTwo lost about 3.35 billion euros of handing the Smart project to a young with a per-unit loss of 4,470 eu- and independently managed group of ros, Bernstein Research es- engineers, who raised the specifications timates. “We’re not con- 1again and again, Bernstein Research says. vinced the current one The two-seat microcar had rear-wheel makes money either, drive, a turbocharged engine, a specially even with all its fixed developed safety cell, aluminum parts and costs written off,” a sophisticated ABS and stability control. the report says. Smart also opened a new factory in high- cost France to build the ForTwo. The first- generation launched in 1997 with huge r&d, marketing and distribution costs. The car was supposed to be affordable city transport but it sold poorly and never Smart ForTwo Stilo’s failure sent Fiat into downward spiral Fiat took on the Volkswagen Golf with was 380,000. The Stilo lost Fiat 2.1 the Stilo compact hatchback but failed billion euros in total and 2,729 euros badly. Fiat’s product planners were per unit, Bernstein Research tasked with developing a true rival to the estimates. “The Stilo was Golf. The car had a new platform, new a disastrous failure for engines and three body styles. The car Fiat and the com- 2was a competent product but never met pany has argu- sales expectations, Warburton says. “Eu- ably never re- ropeans don’t want an Italian version of covered,” the a German car,” the report says. Fiat report says. offered massive discounts on the Sti- lo soon after its 2001 launch, which helped volume reach 180,000 units in its first and second years of pro- duction, but planned annual output Fiat Stilo 16 www.autonewseurope.com JANUARY 2014 AUTOMOTIVE NEWS EUROPE AUTOMAKERS Phaeton became a financial black hole With the Phaeton, Volkswagen aimed per-unit loss of 28,101 euros, Bern- to build a sedan that could match Ger- stein Research estimates. Planned man premium rival Mercedes-Benz. annual production was 50,000 units but Premium buyers, however, don’t want output peaked at 11,000. to be seen driving a car with a volume automaker’s badge. Asked whether the 3Phaeton would be an S-class rival, then- Mercedes CEO Juergen Hubbert told a Bernstein Research analyst: “We have looked closely at the car and I tell you, they can’t afford to build too many.” VW built a new factory in Leipzig, Germany, for the Phaeton. The car got a special platform and enormous engines includ- ing a 6.0-liter W-12 gasoline unit and a 5.0-liter V-10 diesel. “There was no ver- sion of the business plan for the Phaeton that could possibly have added up to a profit,” the report says. VW lost nearly 2 billion euros on the sedan, with a VW Phaeton Mega flops Europe’s biggest loser; estimated loss in billions of euros over life cycle 1. Smart ForTwo 3.35 2. Fiat Stilo 2.10 3. VW Phaeton 1.99 4. Peugeot 1007 1.90 5. Mercedes A class 1.71 6. Bugatti Veyron 1.70 7. Jaguar X-Type 1.70 8. Renault Laguna 1.54 9. Audi A2 1.33 10. Renault Vel Satis 1.20 Source: Bernstein Research Peugeot 1007 1007’s sliding door was a flop Peugeot hoped the 1007 two-door price of 18,000 euros, but Peugeot had at its Poissy plant, near Paris, but output small minivan would become a cult to reduce the price to 12,000 euros. was just 75,000 in the first year, falling citycar with its electrically operated The 1007 was a “disastrous commercial steeply afterward. “The tooling cost for sliding doors that allowed the driver failure,” Warburton says. Bernstein Re- the bespoke exterior and interior of the and front passenger to get in and out of search estimates the car’s total loss 1007 was basically a write-off and the the vehicle easily in tight parking spots. was 1.9 billion euros with a 15,000 big hole left in the utilization of Poissy 4But it was too expensive. The 1007 euro per-unit loss. Peugeot planned to has been a drag on Peugeot since,” Bern- launched in 2004 with a showroom build 150,000 to 200,000 units a year stein Research says. JANUARY 2014 www.autonewseurope.com 17 AUTOMOTIVE NEWS EUROPE AUTOMAKERS A class hit by high fixed costs The A class was Mercedes-Benz’s first ter and the latest version, which has a more variants, including the CLA coupe- front-wheel-drive car, but like the Smart coupe-like styling instead of the boxy styled four-door sedan and upcoming ForTwo its investment costs were high look of the first two generations, likely GLA crossover. and it missed project sales volumes. will perform better be- Launched in 1997 with a planned annual cause it shares production of 250,000, the A class failed its MFA plat- 5to win over buyers in sufficient numbers form with and output peaked at a little more than 200,000. The car also had a disastrous start when it failed a Swedish magazine’s so-called “Elk” test for lane changing. Its platform was designed for electrification but came 15 years too early. Bernstein Research estimates the first-gener- ation A class lost 1.7 billion euros with a per-unit loss of 1,443 euros. The second-generation A class did bet- Mercedes A class Veyron was Piech’s costly dream The Bugatti Veyron supercar costs timates. Its Super Sport version is the timated at 1.2 billion euros. Planned 1 million euros to buy but Volkswagen world’s fastest street-legal production production was 100 cars a year, but an- Group loses 4.6 million euros on ev- car, with a top speed of 431kph (268 nual output peaked at 80 units before ery unit sold, Bernstein Research es- mph). VW bought the French chateau the Lehman Brothers collapse and is of Ettore Bugatti, who founded Bu- now at half that level. VW’s total loss gatti in 1909, refurbished it for the Veyron is 1.7 billion euros, and opened a factory Bernstein Research says. VW argues 6 on the grounds to that the Veyron cost the same as a For- hand build the mula One program, but it’s not clear supercars. R&d how the Bugatti has helped sales of VW costs are es- Golfs or Polos, Warburton says. Bugatti Veyron X-Type almost bankrupted Jaguar Launched in 2001, the Jaguar X-Type be- tions, no diesel engine, which hit sales came the brand’s biggest seller to date in mainland Europe, and a lack of body with 362,000 units sold during its life styles because there were no coupe cycle -- but it was such a money-loser and convertible versions. Premium-car that it nearly bankrupted the UK sports buyers also shunned the X-Type be- car maker, Bernstein Research says. cause of its Ford Mondeo 7Ford Motor, which owned Jaguar at the underpinnings. Annual time, hoped to challenge German premi- sales were forecast at um cars such as the BMW 3 series in the 200,000 but peaked profitable executive sedan market, but at 70,000. The car’s total Jaguar dealers had no experience selling losses were more than 1.7 a car at that price point. The X-Type was billion euros with a per-unit launched with unrealistic volume ambi- loss of 4,687 euros. Jaguar X-Type 18 www.autonewseurope.com JANUARY 2014 AUTOMOTIVE NEWS EUROPE AUTOMAKERS Ghosn misjudged market with Laguna With its third-generation Laguna, which to worry Audi, BMW or Mercedes. It also that buyers were deserting in favor of went on sale in 2007, Renault planned a competed in the mid-sized segment crossovers. The Laguna has lost more large executive car to compete with Ger- than 1.5 billion euros with a per-unit man premium brands.