There’s a battle brewing among the most exclusive carmakers for some of the world’s wealthiest customers, and Bentley claims it has fired the first shot.
With a base price of E144,400, Bentley’s Continental GT coupe has drawn buyers into a neglected niche. Bentley is following the coupe with the Continental Flying Spur sedan, which has the same starting price.
“We’ve created a segment at this new price point,” says Adrian Hallmark, Bentley marketing chief.
Bentley calls it “exclusive luxury.”
Bentley expects rivals such as Mercedes-Benz, Porsche, Aston Martin and Ferrari to add vehicles in that price range. Former sister brand Rolls-Royce also is weighing a move.
The segment Bentley has staked out sits in the territory between E100,000 and E300,000. That’s above the top-end premium cars such as the Mercedes-Benz S-class and BMW 7-series sedans. But it’s below such ultraluxury cars as the Rolls-Royce Phantom and Maybach sedans, which sell for more than E300,000. Bentley says this segment will grow from about 3,000 annual global sales in 2003 to 15,500 by 2008.
The small sales numbers are balanced by high profit margins.
Bentley sales have soared since the Continental GT went on sale in 2004. Bentley had global sales of 1,017 in 2003, the year before the Continental GT arrived. In 2004, Bentley global sales rocketed to 6,576.
The Continental GT has been selling so well that Bentley has a one-year waiting list.
Analysts believe Bentley may have hit on something by aiming above the S class and 7 series but below the Rolls-Royce Phantom and Bentley’s Arnage sedans.
John Lawson, analyst for Citigroup Smith Barney in London, says, “It’s been one of the anomalies of the market that there was a fairly empty segment between the top end of most of the mainstream makers’ ranges and the start of the supercar segment.”
Lawson thinks Bentley’s estimate of 15,500 units by 2008 could be too conservative.
“That latent demand may well be for anything between 10,000 and 25,000 units worldwide,” he said. “Bentley proved the demand is waiting for the supply of the right product. It stands to reason they won’t be left to themselves with it forever.”
The most obvious competitor is Mercedes-Benz, which takes issue with Bentley’s claim to have discovered the niche. Mercedes-Benz has been selling the CL coupe since 1999.
CL-class prices in Germany range from E100,800 to E134,300 for an AMG version. It’s only the most expensive CLs that Bentley worries about.
“We have had the CL for many years, and we think it’s a very clear competitor to the Continental GT,” said Eva Guratzsch, a spokeswoman for DaimlerChrysler in Stuttgart. “We have been the market leader for many years.”
Other brands, including BMW-owned Rolls-Royce, are studying entries. Some luxury brands, such as Aston Martin, Ferrari and Lamborghini, are taking aim at the two-door part of the sector.
There’s a wild card in the ultraluxury deck: The industry has been speculating on a fourth Porsche car. Industry insiders say the fourth Porsche car could be a four-seat vehicle designed to compete with the Continental Flying Spur.
Porsche has been mum except to say that a decision will be made soon.
If the segment is as promising as Bentley believes, Porsche will find it tough to resist.
Customers in the Continental GT and Flying Spur’s segment typically have a net worth of $3 million (E2.24 million) and own about five cars. Customers in the ultraluxury segment typically have a net worth of $30 million and seven or more cars.
Rolls-Royce CEO Ian Robertson says, “There are about 70,000 people in the world with net disposable assets of $30 million or more.” And there are many more who can afford cars like the Bentley Continentals.
With those numbers stable in the US and Europe and growing rapidly in newly wealthy parts of Asia, car executives such as Robertson believe the segment will grow.