Volkswagen AG purchased the rights to produce cars under the Bugatti marque in 1998. They commissioned ItalDesign to produce the Bugatti EB118 concept, a touring sedan which featured a 555 hp DIN (408 kW) output and the first W-configuration 18-cylinder engine in any passenger vehicle, at the Paris Auto Show.

In 1999 the Bugatti EB 218 concept was introduced at the Geneva Auto Show; later that year the Bugatti 18/3 Chiron was introduced at the IAA in Frankfurt. At the Tokyo Motor Show the EB 218 reappeared and the Bugatti EB 18/4 Veyron was presented as the first incarnation of what was to be a production road car.

In 2000 Volkswagen founded Bugatti Automobiles SAS and introduced the EB 16/4 Veyron concept, a 16-cylinder car with 1001 hp DIN (736 kW)0-60 in 2.5 sec., at the Paris, Geneva and Detroit auto shows. Development continued throughout 2001 and the EB 16/4 Veyron was promoted to "advanced concept" status. In July 2005 Bugatti Automobiles SAS announced that the car would officially be called the Bugatti Veyron 16.4. It was said that the car - built in a brand new Bugatti factory in Dorlisheim - would be delivered to clients in October 2005. In fact the Veyron finally entered production in late 2005, the first cars being delivered in early 2006. Maximum speed claims have been met in several high speed tests where the car slightly exceeded its target, reaching 252 mph (407.5 km/h)(Mach 0.3) and holding it for about two minutes. According to Car and Driver, the Veyron's fuel consumption at 253 mph was 3.0 mpg (78L/100km). Independent press tests have reported many failures (three out of five cars notionally available for testing in November 2005 were out of service), but the Veyron prototypes were put through the same gruelling regimen as other Volkswagen group models, with each pre-production car logging over 50,000 miles. This car comes in many different color combinations, including red and black, blue and dark blue, gray and black, and so on.