Bugatti Automobiles S.A.S. is a French automobile manufacturer located in the French town of Molsheim, Alsace, France. It is a subsidiary of the German automotive industry conglomerate and holding company - Volkswagen Group, but is officially owned by Volkswagen France. It was founded in 1998 as a successor to the legendary Bugatti company.
At the urging of then-chairman Ferdinand Piëch, Volkswagen purchased the rights to produce cars under the Bugatti marque in 1998. This followed the purchase of Lamborghini (for VW's Audi division), the Rolls-Royce factory in Crewe, England, and the Bentley marque.
All of these early concepts featured a 555 hp DIN (408 kW) 18-cylinder engine. This was the first-ever W-configuration engine on a passenger vehicle, with three banks of six cylinders. It shared many components with Volkswagen's modular engine family.
Piëch announced the production Bugatti model at the 2001 Geneva Motor Show. To be called the EB 16/4 Veyron, it was intended to be the fastest, most-powerful, and most-expensive car in history. Instead of the large and complex W18 engine of the concept cars, the Veyron would use a VR6-style W16 engine. First seen in the 1999 Bentley Hunaudières concept car, the W16 would get four turbochargers, producing an expected 1001 metric hp (736 kW). Top speed was promised at 407 km/h (253 mph), and pricing was announced at €1 million (US$1.3 million at the time).
Development continued throughout 2001, and the EB 16/4 Veyron was promoted to "advanced concept" status. In late 2001, Bugatti announced that the car, officially called the Bugatti EB Veyron 16.4, would go into production in 2003. The car experienced significant problems, however. High-speed stability was difficult, with one prototype destroyed in a crash and another spun out during a press demonstration at the Mazda Raceway at Laguna Seca. Production of the Veyron was delayed indefinitely.
Piëch retired that year as chairman of Volkswagen, and was replaced by Bernd Pischetsrieder. The new chairman promptly sent the Veyron back to the drawing board for major revisions. Neumann was replaced as Bugatti president by Thomas Bscher in December 2003, and substantial modifications were made to the Veyron under the guidance of former VW engineer, Bugatti Engineering head Wolfgang Schreiber.
Volkswagen AG designed and built a brand new production facility in the French town of Molsheim the marques' original hometown.