Blog: Top end of the market problems
Dave Leggett | 7 January 2009
I have just been speaking on the phone to a reporter at the local newspaper The Stoke Sentinel about Bentley. He regularly calls for a steer on some of the broader auto industry trends and how they might impact the local firm.
How do things look for top-end prestige brands like Bentley right now? Not good. Bentley has been a success story in that it has successfully broadened its range with the Continental GT to a part of the market that was massively under developed - the relatively fallow area between the premium Germans and the even more expensive supercar brands.
Its customers are high-net worth people and the number of these minted guys and gals has soared over the past decade. Many will have been new to Bentley, having come from the swollen ranks of monied property developers, financial sector wizards and an ever expanding emerging market nouveau riche (China and Russia, as well as the Middle East). Okay, plus some footballers and a sprinkling of so-called celebs who appear in supermarket TV ads when they are not in rehab.
How much of the boom in demand for Bentleys has been of an 'effervescent' nature? By effervescent, I mean that it was perhaps a little bit unsustainable and extraordinary in that it was propelled by the boom in financial services and asset prices that has come to an abrupt end.
If we accept that there is a big correction going on globally after the credit-fuelled financial excesses of the recent past, it may well be felt more by the likes of Bentley than the guys who make econoboxes. At the very least and even in a best case scenario, I would imagine Bentley will have a huge challenge to recover volume lost in this downturn. Market conditions may never be quite as favourable again.
Maybe Paefgen realises that and that's why Bentley has been getting a more overt green hue of late (with the talk of much greater powertrain efficiency for lower CO2 and biofuel compatible engines). It's super-luxury, but with some social responsibility thrown in.
But Bentley as a brand has certainly been rejuvenated under Volkswagen, however uncertain future prospects are right now. It's maybe a victim of its own success in terms of having to face lower volumes than it has just got used to. If you'll recall the rather odd circumstances of the split of Bentley and RR, not many would have expected VW to have done so well with it.
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