Fiat Stilo, VW Phaeton, Peugeot 1007 Strong Candidates Too.
Mercedes-Benz’s Smart city car is the champion European money-loser, and electric cars are likely to be the next big one, according to a report from Bernstein Research.
The little two-seat Smart has lost a total of about $4.6 billion over the lifetime of the project, that’s the equivalent of $6,100 per car, Bernstein said in a report, published at the same time as a survey from Foster City, California based CarInsurance.com pointed to the Smart as the most embarrassing car to be seen in.
“Our guess for the (future) most likely failures? We’d argue electric cars – from Renault to VW to BMW – look likely to qualify. Electric vehicle evangelists seem to be enjoying a Tesla-powered rush of blood to the head, after the American company’s sales success,” Bernstein said.
Renault of France has committed to spending $5 billion to produce a range of electric cars, and once said global sales of battery-only vehicles would reach 10 per cent of global sales by 2020.
“But we’re not convinced that these European electric products can make money – in fact for the ones with big volume hopes like Renault, they have the potential to lose a huge amount,” Bernstein said.
Bernstein compiled a top 10 of losers, with reasons for their failure.
The Smart, which started life as an idea from Swiss watch Swatch fame rejected by VW, was too expensive to build and sales never reached high enough during its first iteration. The semi-automatic gear box was a clunker too.
“We’re not convinced the current one makes money either, even with all its fixed costs written off,” Bernstein said.
Mercedes is now collaborating with Renault to make small cars more efficiently.
After the Smart came the Fiat Stilo, which lost $2.9 billion and $3,700 each time one was sold. Fiat’s sales goals for the Stilo – beat the biggest selling VW Golf – were never met. Production was established for 400,000 Stilos a year but only reached about 180,000 a year in 2002 and 2003.
3) VW Phaeton – total $2.7 billion – $38,000 a car. Tried to match Mercedes without the brand power. A new Phaeton is coming.
4) Peugeot 1007 – $2.6 billion – $21,000 a car. Small car with rear sliding doors.
5) Mercedes A class – $2.3 billion – $2,000 a car. Failed the “elk-test”, toppling over in Sweden during lane-changing test.
6) Bugatti Veyron – $2.2 billion – $6.2 million a car. VW owns Bugatti. “R&D costs to rival Concorde”. Total sales so far 369.
7) Jaguar X-Type – $2.3 billion – $6,350 per car. Small Jaguar based on parent company Ford Mondeo. Lost out because it was seen as a Ford-based luxury car. If only Ford had done this the other way around.
8) Renault Laguna – $2.1 billion – $4,800 per car. Big car charged with competing with the German premium manufacturers.
9) Audi A2 – $1.8 billion – $10,200 per car. Small car, expensive aluminium body.
10) Renault Vel Satis – $1.6 billion – $25,400 per car. Another failed attempt to move upmarket.
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