The secret tactic Bentley uses to make buyers binge on bling

Despite looming recession, sales and profits at Bentley have never been higher. Here’s why the party could keep going

Leow Ju-Len
Published Fri, Sep 9, 2022 · 05:50 AM

THE luxury business is a good one to be in right now, said Alain Favey, the board member in charge of sales and marketing at Bentley Motors. Consider him a reliable source. Since taking up the role in March last year, he has seen a post-pandemic surge in interest in the venerable British marque’s stately cars.

After posting record sales and its highest profit in 2021, the poshest brand in the sprawling Volkswagen empire is on track for an even better year. Operating income for the first half of 2022 hit 398 million euros (S$543 million), up 124 per cent on the same period last year. The division has already blown past the 389 million euros in profits it recorded for all of 2021.

Bentley is having a blockbuster 2022 here, too. Registration figures from the Land Transport Authority show that it put 70 new cars on the road here in the first 7 months of the year, more than any other brand in the super luxury game.

Although buyers here typically sit tight for 8 months between ordering their car and collecting the keys, the wait is more because Bentleys tend to be heavily customised than because of the supply-chain problems that have crimped production at most car companies. As the earnings powerhouse within VW, Bentley gets dibs on all the microchips it wants, Favey told The Business Times.

Yet, even though income has more than doubled, half-year sales at Bentley are only up 3 per cent, at 7,398 cars compared to 7,199 a year ago. The seemingly endless lockdowns in China are largely to blame for the sluggish volume growth. Sales there are down 25 per cent.

But Bentley is at a comfortable size, said Favey. It commands nearly 15 per cent of the global market for cars priced above 200,000 euros without taxes. “I think that’s where we want to be. We don’t have any big plans to grow our volume. That’s not the strategy,” he said.

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Instead, Bentley intends to make hay by boosting what he calls the quality of its sales, rather than the quantity. Over the last year, the average price per car has gone up from 183,000 euros to 216,000 euros, excluding taxes. “We improved the average price of every Bentley sold,” Favey said. “We think we can still keep improving that, so rather than sell more cars, we try to sell cars with more content and a higher price.”

Customers have been splurging on extras such as unique colours, special cabin materials or personal touches, all of which fatten margins. Want the headrests embossed with your family crest or fancy having the upholstery in the same colour as your favourite scarf? As you wish, sir.

Adrian Hallmark, the brand’s chief executive, said in July that the company’s customisation division has been more than pulling its weight. “In particular, a significant increase in demand and capitalisation of our Mulliner personalisation programme has driven record return on sales,” he said.

Favey revealed a sure-fire way to get a buyer to load up on the bling. “I tell you, the best argument is when we manage to get our customers to visit the factory,” he said. Dropping by the brand’s home in Crewe, near the Welsh border, tends to open the Bentley buyer’s eyes to the possibilities that customisation offers.

The company even makes its car designers available to consult on choosing options tastefully; imagine Giorgio Armani himself helping you to pick out a fabric for your suit.

“Our customers can sit with one of our designers and really get help choosing the right thing, because we have an infinite number of colours and wood and leather combinations,” Favey said.

But there is one area where Bentley has no choice but to go with the flow, rather than influence buyers: “In the luxury market, we see a trend towards younger customers with completely different mindsets than the ones we were used to in the past,” Favey said. “Sustainability is extremely important to them.”

While some traditional customers are hell-bent on making sure they buy one of Bentley’s final combustion cars, the company is committed to becoming fully electric by 2030. Its future battery-powered cars won’t be radically different in form from the various kinds of car it is now building, Favey said.

But whether sales and profits will continue to hit new highs every year until then is an open question – with war in Europe, rising interest rates, an energy crisis and a looming recession all threatening to end the party. Bentley itself said in a statement that the outlook for the rest of 2022 looks “challenging”.

Favey is optimistic, however, and says the company has demographics on its side.

“The number of wealthy people, the number of high-net-worth individuals keeps going up, up, up and up. So there is bound to be more luxury cars sold because there are just more wealthy people who are able to buy them,” he said. “There are 20 million high-net-worth individuals in the world, and the total luxury market as we see it is 100,000 cars a year. The growth potential is almost endless.”



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