In 1998, Volkswagen AG decided to revive the legendary Bugatti automobile brand, purchasing all trademark rights, and the next year Bugatti Automobile S.A.S. was founded in Molsheim, Alsace, as a Volkswagen France subsidiary.

As early as 1998, Volkswagen presented its first Bugatti prototype at the Paris Auto Salon -- the Bugatti EB 118, a two-door coupé with 555 HP designed by Italdesign. It was followed by another Italdesign product, the Bugatti EB 218, a four-door limousine which was presented at the Geneva Auto Salon in 1999. At the International Automobile Exhibition in Frankfurt in the fall of that year, Volkswagen introduced the Bugatti 18.3 Chiron, named after the greatest Bugatti racecar driver of the interwar era. The Bugatti Veyron Concept Car was first shown at the Tokyo Motor Show. Both the Chiron and the Veyron were developed by the Volkswagen AG design team led by Hartmut Warkuss.

In 2001, Volkswagen decided to start serial production of the super-sportscar Veyron, whose official name was "Veyron 16.4". In the fall of 2004, after renovation of the traditional Bugatti headquarters at Château Saint Jean was completed and the new assembly studio constructed, Bugatti S.A.S. began manufacturing the first Veyron. About 80 cars are assembled each year, most of them being picked up directly in Molsheim by their new owners. This is a pleasure that customers back in Ettore Bugatti's days also used to indulge in.