Porsche takes larger slice of Rimac in prelude to Bugatti sale

Porsche has increased its stake in Rimac in a move perceived by the financial markets as Volkswagen Group opening the door to offload the Bugatti brand to the Croatian-based car-maker.

As part of the deal, Porsche has announced it will invest a further €70 million ($A108m) to raise its stake from 15 per cent to a more substantial 24 per cent slice of the hypercar firm, which specialises in electric vehicles.

Porsche first invested in Rimac back on 2018 when it bought a 10 per cent share before reinvesting in the firm again in 2020.

Rimac, which was founded in 2009 by Mate Rimac, is most famous for cars like the 800kW Rimac Concept_S or the astonishing Rimac C_Two with its astronomical 1428kW.

But over its history the car-maker has rolled out little more than 10 cars.

The reason Porsche and the Volkswagen Group have invested heavily in Rimac has little to do with its car-making operation.

It's the company's engineering arm that has triggered the whole car industry's attention, and the Croatian's consultancy service now lends its expertise (and hardware) to Aston Martin, Hyundai, Kia and many others.

Bugatti, meanwhile, has fast become a problem child for the Volkswagen Group.

Despite the success of the Bugatti Chiron and spin-off models like the $7.9 million Bugatti Divo, the famous French hypercar-maker's reliance on its mighty quad-turbo 8.0-litre W16 is at odds to Volkswagen's mass shift to electrification.

For it to survive, a huge investment would be needed for both a new architecture and pure-electric powertrain, which is where Rimac can help.

Selling Bugatti to Rimac prevents Volkswagen from having to pull the plug and lose face on what was once its engineering jewel in the crown.

Buying into the cutting-edge Rimac, which only employs 1000 people at its HQ near Zagreb, also gives VW direct access to new tech and knowhow it will need for both its far more profitable Porsche and Lamborghini brands.

Despite the share grab, Rimac says its day-to-day business will not be impacted by its new big investor.

"Because we have many auto-makers worldwide as customers it's important for Rimac as well as for Porsche that we remain a wholly independent company," said Mate Rimac in a statement.

"The partnership with Porsche helps the company to develop and grow, which is an advantage for all our customers."

Commenting on the deal, Porsche chief financial officer, Lutz Meschke, said: "The company has developed very well technologically. We expand our co-operation step-by-step."