A German magazine is reporting that the Volkswagen Group is selling Bugatti to Rimac. It plans to finalize the sale by the end of this year. If it goes through, and by all appearances it will, Rimac will turn Bugatti into an all-electric brand. Are Lamborghini and Bentley the next to be offloaded by the Volkswagen Group? 

According to Car magazine, the company has already approved the sale but it is pending until the board approves it. In 1998 former VW Group Chairman Ferdinand Piech spearheaded acquiring the storied brand. The company stopped making cars in 1952 but produced airplane components until the 1980s as Messier-Bugatti. 

The VW Group not only acquired Bugatti but also Bentley and Lamborghini

Under Ferdinand Piech, the VW Group not only acquired Bugatti but also Bentley and Lamborghini. With the pending sale of Bugatti, it may portend a similar fate for Bentley and Lamborghini. Viewed as mostly boutique brands within the giant VW Group it has mostly been all hands on deck for VW to break into EV and autonomous technology. It may not have the capital and attention to pay to these low-volume brands. 

Under VW control the Veyron was developed. While the company is said to be profitable the Veyron is rumored to be a money loser for VW. Bugatti sold 82 cars last year and according to Bugatti president Stephan Winkelmann, it will show a profit in 2020. 

Part of the cost of acquiring Bugatti would be selling a chunk of Rimac to VW

With the costs of VW’s diesel cheating scandal and trademark lawsuits that it lost over proprietary electronic components, it has been eyeing ways to generate capital. Rimac has been successful in developing electric drive components. Porsche has invested heavily in the Croatian company owning 15.5% of Rimac. Part of the cost of acquiring Bugatti would be selling a larger chunk of the company to VW. 

For that alone, this move looks more like a means to have a larger stake in Rimac than offloading a small brand. Rimac has a fine reputation for developing and manufacturing electronic components. If the VW Group sees that as its future then it needs to be heavily invested. This move is another means to that end. 

The almost 2,000 hp Rimac C_Two electric hypercar is due to launch early in 2021

The almost 2,000 hp Rimac C_Two electric hypercar is due to launch early in 2021. While Rimac is producing the car its main focus is as a Tier One supplier of electronic components to the auto industry. The company has said in the past that car production will be at very low volumes. 

“We don’t want to go to a higher volume with our cars for several reasons,” Rimac founder Mate Rimac told Automotive News. “One of them is that we don’t want to compete with our customers. As long as we are below 100 cars a year, they don’t care.” 

The privately held Rimac manufacturers efficient battery packs, e-motors, and has developments in various driver-assist, infotainment, and connectivity components. It also is heavily involved in systems integration and control. Rimac told Cars, “Our powertrain systems are the highest power density and the highest energy density. If you need to have as much power in as little space as possible then you come to us.”