Luxury Market Takes a Nosedive? Bentley Isn't Worried
Product speaks for itself. But are customers listening?
Over the past decade, Bentley's hand-crafted British 6-figure vehicles have been a favorite among those who can afford them. And perhaps no car brand has the same pop culture cache: Bruce Wayne was driven around in the company's Arnage Red Label in Batman Begins while rap superstar 50 Cent drove around in the famous Continental Flying Spur in his "Window Shopper" video. In 1998, rapper/producer Sean "Diddy" Combs paid $375,000 to become the first person in the United States to own a 1999 Bentley Azure, showcasing the vehicle in his videos and establishing a favorite in the hip-hop industry, which Bentley dealers estimated made up about 15% of the company's American sales earlier this decade.
But with the luxury market taking a nosedive, Bentley isn't worried about a pop culture appeal they never consciously tried to obtain.
"Bentley as a brand is not the type of company that stands up and shouts look 'at who we are.' We are a small bespoke conservative British auto manufacturer," says David Reuter, Bentley's Head of Communications. "We don't advertise or do product placement. We personally think the product is so good that all we have to do is put it in front of customers."
But one of the world's most iconic auto brands is taking a hit, not unlike every other industry -- particularly, luxury. And the timing is somewhat inconvenient, with the company celebrating its ninetieth anniversary and unveiling a new high-end vehicle this month at Pebble Beach.
Perhaps worse, the global financial hit has made Bentley a taboo topic. Reuter said:
"The natural demand for Bentley has definitely fallen in the last year or so. We started to see some weakness in the beginning of 2008. In the second half of 2008 we went off a cliff. We've heard this from a lot of customers and the data proves it, it's not that customers don't have the financial means to purchase the car anymore. Their portfolios have been hit, but they are still very wealthy individuals. It's that there is less social acceptance of discretionary purchases like that. Our view is that's fine."
While the new vehicle is expected to be the epitome of Bentley elegance, the company is also adapting to a changing luxury landscape. In September, the company will sell off random parts from Bentley and Rolls Royce models at a warehouse in Cheshire, England. In selling off the parts and accessories, the company is looking to free up some space for its upcoming models. What's more, Bentley announced last year that it was embracing bio-fuels in its vehicles as part of a new far-reaching environmental initiative.
Even with sizable markets emerging in China and the United Arab Emirates, sales have dropped over the past year. Bentley's top-selling global outlets in the UAE experienced a 22% decline in sales in the first half of 2009, but the company expects the market to get back to 2008 figures by the end of the year.
And even with all the shifts in strategy, the company will still be all about the super high-end car, starting with their new upcoming model. "This new car will be a revelation in the modern luxury business. It will be the epitome of everything we're known for," says Reuter. "Everything will feel like a million bucks."
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