Bentley Priming Profit Pump After Bruising Recession
The British auto maker exits the economic downturn with a workforce 10% lighter, a productivity improvement of about 5% on the volume Continental line and its fixed costs reduced 25%.
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DIRLETON, East Lothian, U.K. – Franz-Josef Paefgen, chairman and CEO of Bentley Motors Ltd., says the British auto maker approaches the world’s post-recession luxury-vehicle market carefully and optimistically these days, but also fully expecting to soon deliver the sort of profits that have made it a small treasure within parent Volkswagen Group.
“Optimistic, because there are signs of recovery. And careful, because we must be aware that we are still not at the end of the crisis,” Paefgen tells Ward’s during a recent interview here linked to the launch of the all-new Bentley Mulsanne sedan. “Nobody can actually say when this (downturn) is going to disappear.”
Bentley’s caution is understandable considering 2009 proved a nightmare, with the global economic crisis sending sales down to just 4,000 units and an operating loss of €194 million ($135.3 million), based on exchange rates at the close of the fiscal year.
Just two years earlier, the auto maker sold more than 10,000 cars and delivered Volkswagen AG a tidy profit of €155 million ($106.2 million).
That’s a cool €15,000 ($10,274) per unit. Even in 2008, when the wide-sweeping financial meltdown erased six months of its business, Bentley mustered a profit of €10 million ($7.2 million) on 7,000 deliveries.
Fortunately, Paefgen says, the VW brass back in Wolfsburg understands how a recession can wreak havoc on the ultra-luxury segment, just as it does at the lower end of the market.
“Someone is not sitting there waiting for financial figures to be delivered every quarter,” he says.