Biggest losers

Smart investments?
It’s easy to dream, but not so easy to convert a dream into real life.

That’s what Mercedes-Benz found with the tiny smart ForTwo city car that swallowed more investment money than any low-price car should. So much so that in the nine years between the little two-seater’s introduction in 1997 and 2006 it represented a loss of A$4.9 billion.

That was largely because sales fell short (more than 40 per cent) of the targets calculated to earn a profit. Not such a 'smart' car after all...

Indeed, each smart car built during the period lost more than A$6,500 for the company, with development costs estimated by analysts Berstein Research to be around A$5 million.

The ambitious little Benz was intended to change the shape of in-city motoring and was a clean-sheet project that shared nothing with any existing product. Problems started immediately after production when it was found that, despite amazing passive safety ratings, the upright two-seater was prone to falling over in certain circumstances.

That was all fixed, but the resultant publicity couldn’t have done much to encourage sales. The model has nevertheless gone on to become a familiar sight in European cities, and a new version is in the wings.

Ambitious Bugatti
Across a few conceptual light years from the smart is the Bugatti Veyron – a car that was designed with little restraint in terms of performance potential, and remains a benchmark for the ultimate in road cars today.

But it was never a profitable exercise. It lost a whopping A$2.5 billion between 2005 and 2013 for the Volkswagen group and, according to Berstein Research, each Veyron built represents a loss approaching A$7 million. It's fair to say owners are getting their money's worth then!

In this case however, the downsides were expected. As a showcase of what can be achieved in ultra high performance design when cost is not the primary consideration, the car does what Volkswagen intended.

Big bucks down the gurgler
Bernstein Research's list of top ten loss-makers includes, as well as the smart ForTwo and the Bugatti Veyron, Fiat’s Stilo small car that lost the company A$3 billion between 2001 and 2009.

Volkswagen’s ambitious ultra-luxury Phaeton that lobbed in 2001 has so far cost the company A$2.9 billion in losses, having failed to strike a chord with buyers.

The Peugeot 1007 with its sliding doors was built between 2004 and 2009 for a loss of A$2.8 billion, and the original Mercedes-Benz A-Class that had its own share of stability problems and bad publicity lost A$2.5 billion between 1997 and 2004.

Jaguar’s small car, the retro-styled X-Type sedan also lost A$2.5 billion, between 2001 and 2009, and the third generation Renault Laguna large car that was introduced in 2006 created losses of A$2.3 billion between then and 2012.

Audi has also had a clanger in the form of the Audi A2 mini MPV. It lost A$2.1 billion between 2000 and 2005. The expensive, weird-looking Renault Vel Satis that tried unsuccessfully to marry MPV-like proportions with a luxury hatchback between 2001 and 2009 would have made the bean counters wince too (and not just from its polarising looks), burning A$1.7 billion in the process.

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