Bentley becomes problem child within VW Group
Last year luxury car manufacturer Bentley sold 10.500 cars (-5%) and lost 288 million euro. That’s 27.500 euro per produced car. Reasons are many, cures are not. Turnover decreased with 16% to 1,5 billion euro compared to 2017, admittedly a record year.
One of the problems are the Bentayga sales. The super luxury SUV saw its sales shrink with 20% to 4.000 units in 2018. When Bentayga was launched in 2016, it became the bestseller, representing practically half of the sales and pushing total sales to 11.000 units.
The problem is that its popularity is already waning because strong competitors have shown up in the segment recently. From the same VW Group, there is the Lamborghini Urus (a super-sports SUV). From the BMW Group there’s the even more luxurious Rolls-Royce Cullinan.
According to VW headquarters, the alarming results are due to the dramatic start-up of sales/production of the new Bentley Continental GT.
Due to problems with the new WLTP regulations and differences between Bentley and Porsche people, the car launch had to be postponed six months. There were also delays in the delivery of engines coming from the Audi sister in the VW Group.
Bentley celebrates its 100th birthday this year, although it won’t be a big celebration. The company is owned by the VW Group since 1998 and has never been performing very well.
Since 2014, results are worsening: that year the company earned 170 million euro, in 2017 it was 55 million and now there’s a big loss. With a profit margin of 3%, Bentley scored three times worse than Skoda, also owned by VW Group.
The Bentley results are also quite strange because the luxury car sector is still in the lift. Lamborghini sold 50% more cars, Rolls-Royce was very successful and rose 22%, Aston Martin also did well.
Attempts to solve things
At VW they realize that the problems are serious. Last year the successful automotive manager, Adrian Hallmark, was lured away from Jaguar Land Rover to become the new Bentley CEO. At the same time several former top managers were ousted.
At Bentley they now tend to take Porsche (another sister company in the big VW family) as an example. Last year Porsche earned more than 4 billion euro (more than VW itself). With a profit margin of 17% it earned 16.000 euro on every Porsche sold.
These are figures Bentley can only dream of, but the old English company is looking at the electrification program of the Germans. Porsche has announced there will be an electrification of all its models as soon as possible.
That’s apparently the way Bentley also wants to follow. But taken into account the recent troubles between the two brands about the Continental GT (which has a lot in common with the Porsche Panamera), this won’t be easy.
And then there’s another major problem looming: Brexit. It’s not clear yet how big the problems with deliveries, customs and financial exchanges will be, but that there will be problems, that’s for sure, deal or no deal.