But a rash of extremely expensive, extravagant cars often prefigures an economic slump, and a Bugatti usually figures. In the Loadsamoney Britain of the late 1980s, for example, makers such as Jaguar with its XJ220, the Bugatti EB110 GT and the short-lived supercar marque Cizeta tried to cash in on the boom but their cars arrived just in time to belly-flop into the recession of the early 1990s.
Old cars were swept along in the euphoria and the classic car market turned into a speculative bubble that quickly burst, with prices even now way below the records set then.
The most notable automotive event immediately before the Great Crash of 1929 was the launch of the opulent Bugatti Royale, then (and now) one of the most expensive cars in the world.
Economists who believe the luxury car market represents a “leading indicator” on the likelihood of a recession will no doubt have been especially worried when the Bugatti Veyron was unveiled last year.
I know I’m asking the obvious, but if the release of the newest Bugatti has heralded all recessions past, how on earth are they still in business? Releasing a new product just as the market for it disappears seems to me to be a sure fire route to bankruptcy.
Well the Buggati Veyron is actually sold at a loss. It sells for Â£1m in the UK, which somehow translates to â‚¬2m here but it costs Â£5m to produce. This would be down to development costs on producing such a high powered car in such low volumes.
VW group own Buggatti now whereas it had very shaky financial backing in it’s previous lives. As such I think VW run it as a loss maker in the hope of gaining prestige and future competitive advantage from making a technological tour de force like the Veyron.
Was out at the Four Seasons hotel over Xmas and someone commented that “it’s like New York in the 1920s” which I thought summed it up perfectly.
The cars on display were astounding: you’d look middle-of-the-road with an '06 E-class (heaven forbid you had a C-class). S-classes, Ferarri and Bentley were order of the day. The valet driver wouldn’t even look at you if you rocked up in a middle-class number like a Focus or an Avensis - in fact, you’d be ushered off as quickly as possible to the arse-end of the car park, well out of sight. The number of glittered women and gents in silky suits (who also happen to eat full-Irish pork breakfasts) was on a scale that I’ve never seen before!
I don’t think there’ll be a repeat of this in '07 (especially now that the Shelbourne is in competition).