Bentley Motors, the renowned British luxury car manufacturer owned by Germany’s Volkswagen, has recently announced a significant drop in profits, primarily attributed to weaker consumer demand in China. The company’s operating profit for the year 2024 stood at €373 million (£314 million), marking a decline of over a third compared to €589 million the previous year. This figure represents the fourth-highest operating profit in Bentley’s 105-year history.

Frank-Steffen Walliser, who has been Bentley’s chief executive since July, described the past year as “positive despite the headwinds”. He highlighted the looming threat of potential tariffs from the United States, which could force manufacturers to alter their production strategies. This caution echoes remarks made by US President Donald Trump, who has suggested that tariffs of up to 25% on imported cars would compel companies to shift manufacturing to America.

According to Walliser, Bentley’s unique position as a luxury brand makes it feasible to impose price increases on consumers without significantly impacting sales. “We are assessing different scenarios on how to handle it, but it would eventually be passed on to consumers,” he noted during a press conference. Reportedly, Bentley’s revenue for 2024 reached €2.6 billion, although the company opted not to disclose the number of vehicles sold during the year. In 2023, Bentley successfully delivered 13,560 cars.

The shift in Bentley’s approach emphasises a focus on “value over volume”, aiming to maximise revenue from each vehicle sold. Approximately 70% of customers choose bespoke options, which can include extravagant customisations, such as a recent request involving 3D-printed rose gold details. Walliser pointed out that the primary factor behind the decline in profits was the softer demand in China, with executives expressing hope for a stabilisation in the market. Jan-Henrik Lafrentz, Bentley’s finance chief, remarked, “I hope Chinese demand will hopefully level out this year.”

Despite the current challenges, Bentley is making adjustments in its strategy regarding electric vehicles. The company has postponed the launch of its planned electric sports utility vehicle (SUV) until 2026, with the first deliveries not occurring until 2027. This delay is part of a broader trend in the automotive industry, as many manufacturers are reconsidering their timelines in response to lower-than-anticipated demand for electric vehicles. Furthermore, Bentley has extended its timeline for phasing out petrol cars to 2035, which is five years later than originally scheduled. Walliser acknowledged that the prior forecasts for electric vehicle launches may have been “a little bit too bullish”.

Looking ahead, Lafrentz has expressed confidence that Bentley’s future electric vehicles will achieve profit margins comparable to those of the current petrol and hybrid models, stating, “That’s a clear target.” As the carmaker navigates the evolving landscape of luxury automotive demands and tariff uncertainties, it remains focused on delivering customisable luxury experiences to its clientele while adapting to market dynamics.

Source: Noah Wire Services