Demand for luxury goods may outpace mass-market equivalents thanks to the widening income gap, but that doesn’t help Bentley Motors.
The Volkswagen Group brand’s sales, revenues and profits all fell by double-digit percentages last year from record levels in 2022, as its growing base of ultra-wealthy but discreet customers opted out of buying a new car , and it did, according to the report. the head of the car company, to avoid flaunting his fortune.
“Even though our customers can still afford our cars, there has been a level of emotional sensitivity that has slowed demand,” CEO Adrian Hallmark was quoted by CNN as saying Thursday. Bentley did not respond to a request from Fortune for comment.
The British luxury brand stands out from its competitors with its stately elegance, a symbol of cool Britain, one of the reasons why it was one of Queen Elizabeth’s favorite car manufacturers.
Its customers are less likely to seek the critical stares that come with owning flashier sports cars like a Lamborghini, whose customers prefer the ostentatious design inherent in the Italian brand’s DNA. Even BMW’s Rolls-Royce, whose combustion cars exclusively offer 12-cylinder engines, is less reserved than Bentley.
Yet times have been tough in the context of the cost of living crisis in the UK and Europe, where inflation has outpaced growth. Russia’s invasion of Ukraine forced the region to abandon its heavy dependence on Vladimir Putin for critical resources such as energy and minerals, and as a result their national economies are still undergoing a painful readjustment.
Sales of Bentley vehicles to customers in the UK and Europe, which together rival the US as its largest market, fell by 18% and 15% respectively. This has exacerbated a specific malaise in China, where deflation headwinds have seen volumes fall by a similar amount.
Nonetheless, the 13,560 cars delivered by Bentley to customers still represent the third best annual result ever.
Hallmark leaves company to become Aston Martin’s fourth CEO in 4 years
In a surprise move that could derail its cautious optimism for 2024, Hallmark resigned from its post with immediate effect on Friday to take the reins of British luxury sports car maker Aston Martin. He is expected to take over as CEO by October this year.
“With Adrian Hallmark, we are attracting one of the highest caliber leaders not only in our segment, but in the entire global automotive industry,” Aston executive chairman Lawrence Stroll said in a statement Friday.
Hallmark has spearheaded a period of stunning growth for Bentley, transforming the company from a massive operating loss of €288 million ($312 million) in 2018, when he was named CEO, to peak earnings of €708 million two years ago, in the wake of increased demand. for its workhorse, the Bentayga SUV. In the process he reshaped Bentley’s strategy to focus on making it the most sustainable brand for ultra-luxury vehicles by the end of this decade.
He’ll have his work cut out for him at Aston. In January 2020, Stroll led a consortium of investors that initially rescued the struggling brand. But the rudderless company has found no peace since veteran CEO Andy Palmer left soon after, with Hallmark now set to become the fourth CEO in as many years.