Bugatti Veyron - Apotheosis or Beginning of the End?

[I have just added a short quote from Businessweek magazine, 20th Dec issue, about VW; adds some weight to the musings below.]

You may question why I am writing about a car, but I can't help wondering if the new Bugatti marks - with impeccable timing during this period of high energy prices and discussion of dwindling natural resources - the zenith of our "Western" civilisation.

This may seem a bit arcane, but viewed from different perspectives the car itself generates one question which has multiple answers, depending on who asks the question. The question is: Why? As there is no single answer, let's look at the car itself:

The car was conceived by the then head of Volkswagen, Ferdinand Piech, without reference to his engineers or designers. In a fit of calculated hubris, Herr Piech commissioned a model, which he unveiled to journalists and announced would have 1000 horsepower and be capable of 250mph.

Several years and hundreds of millions of R&D euros later, the car has just been launched. To Herr Piech's credit, it does exactly what he said it would, although several rules of engineering had to be re-written to achieve it. The gearbox alone required the work of 50 engineers for five years. The engine - two V8s bolted together - requires 10 radiators to cool it, as well as having no cover to allow greater airflow over the hot bits. To improve the aerodynamics to get to the magical 250mph mark the engineers reduced the size of the wing mirrors, only to find that at 240mph the original mirrors created significant downforce, and without them the nose lifted off the ground. You get the picture; here is a car that has lifted the bar in terms of performance, but - and this is what marks it out from the plethora of supercars currently being designed and built - it can apparently also be driven on a day-to-day basis as a commuter vehicle.

It would be possible to continue in this vein for several paragraphs; I could lean towards eco-outrage ( no fuel consumption data is given, but I can't imagine it is exactly frugal), or I could rave about many different aspects of the car from an enthusiast's perspective. Alternatively, I could bemoan a society which exalts such a unique vehicle; it is clearly destined to feature on the front pages of The Daily Mail or The Sun with a headline such as "Billionaire kills model in supercar horror crash".

However, I have no interest in using this vehicle to target any of those particular special-interest groups. Anyone trying to use the Veyron to promote their particular obsession (apart from the petrolhead, I suppose) is missing the Bigger Picture. Indeed, this car has taken incredible amounts of engineering and research time and skill away from other (possibly) more important projects - how much closer would usable fuel cell technology be if the investment money had been made in alternatives to the petrol engine? Still, it is nigh impossible to demonstrate how the Veyron has stood in the way of progress. It may also use colossal amounts of fuel for a 2-seater car, but again, how many will actually be driven and how far? We are back to the "one flight to Bangkok is the same as 16 car journeys to New York and back", i.e it may be symbolic of waste, but in real terms it's impact is minimal. Similarly, even if one does crash at outrageous speeds, killing the occupants, is that actually worse than the lorry driver who ploughs into stationary traffic at a motorway junction, or the kid in a stolen car who kills his mates by accident?

For me, this car raises the question "where is Western liberal democratic civilisation heading?". If this seems likely a rather portentous question - it is just a car, after all - then consider this:

The manufacturer, Volkswagen, is a mass-producer of family saloons; true, it has tried to drag some of its divisions up-market, but by and large the performance aspect of it's business has been very quietly sold as an add-on (I know, I know, they began the 4-wheel drive revolution with the original Quattro, but that did not lead to a sustained competition effort). They make and sell 4-door tin boxes to the family in the street.

Volkswagen bought Lamborghini, and is in the process of turning the current range of user-unfriendly exotica into Porsche and Ferrari rivals. Most people would consider the Lamborghini range to be the manufacturer's "supercar" division.

Like other Western car manufacturers, Volkswagen is faced with intense competition from lower-cost manufacturers, based in Eastern Europe and the Far East. At the same time as having sales and margins squeezed by external factors, VW is facing the effect of generous settlements with unions during the good years, with little support from politicians for reforms to improve it's financial viability. It's response? To spend hundreds of millions developing a car that will be produced in very - I mean very - limited numbers. Some car manufacturers do use their sporting links and heritage to promote sales; not so VW, this is strictly a one-off "trophy" car.

The Veyron will retail at over £800,000. I am sure that there will be buyers, just not in sufficient numbers to cover the cost of development, let alone make a profit. It was rumoured that the project was bankrupting VW at one point.

To summarise, a major European company has achieved a very difficult goal it set itself: to develop and build a supercar that so exceeded all existing (and planned) supercars, it would be heralded as a triumph, and possibly never superceded by any other manufacturer. In doing so it appears to have ignored other very pressing priorities, in order to demonstrate to it's peers just how good it is at making cars; it has not made any extra profit; it has not moved the "average" car forward one iota (no ABS-equivalent development, no improved fuel consumption, no extra safety), and it has not given itself a leading position in a profitable market. In fact, all the gains seem to be entirely internal, or at the most limited to a select group of car manufacturers (their CEOs, anyway).

For the record, I have no problem with firms pandering to the super-rich. If it provides jobs and makes a profit, why not? My problem with the Veyron is that it appears to be the result of one man's ambition; it is at best irrelevant to the future of Volkswagen, at worst it has taken huge resources of time, money and expertise from the real areas of priority and applied them to something superfluous. It may be that this is in fact an insignificant blip in the history of a very large and important Western European corporate - after all, Herr Piech has retired, and the new boss has a different strategy. I certainly hope so. Still, I have an uncomfortable feeling that the hubris demonstrated by Herr Piech is indicative of something that may mean trouble ahead - a desire to to be measured as best using an irrelevant benchmark. The desire to innovate appears to be lacking, and innovation is the only thing that can keep the West ahead of the competition.

Businessweek magazine has an article about fund managers seeking to change VW management to revive the business:

-A former VW CEO and leading member of the family that controls German auto maker Porsche (PSEPF ), Piëch wields big influence at VW since Porsche bought an 18.53% stake in the carmaker in October. That's a problem for Tweedy Browne, which worries Piëch will slow VW's much needed restructuring and use Volkswagen resources to subsidize Porsche operations. The U.S. investment firm also condemns Piëch's final years as VW CEO, when the groundwork was laid for VW's current poor performance. "He was a disaster for Volkswagen in the late 1990s," says Tweedy Browne Managing Director Thomas H. Schrager. "I want Piëch off the board. I want him to go away and enjoy his billions."-

full article:

http://newsletters.businessweek.com/c.asp?id=596171&c=d5eec6752f935fcf&l=3