Bentley Celebrates Its 100th Year After Barely Surviving Its 99th

(Bloomberg Businessweek) -- “Birthdays are a time for reflection, but they’re also a time for planning forward,” says John Paul Gregory, head of exterior design for Bentley Motors Ltd. “To figure out what type of person—or brand—you want to be.”

To celebrate its centenary, on July 10 the exclusive British brand unveiled a concept car, the EXP 100 GT. Two feet longer than a Cadillac Escalade but featuring only two doors, the battery-powered grand tourer boasts sustainably sourced paint and wood. And everything from the extensive battery range to the high-tech window glass is meant to showcase the company’s plan for top-tier motoring in 2035. That vision includes self-driving technology that can still provide a visceral connection to the road and retains the joy of driving.

Sadly, of late the brand’s own ride has been rather not joyful. “The 100-year anniversary comes at a good time, because the 99th year of the company was probably the worst year in our history,” says Adrian Hallmark, who was appointed Bentley’s chief executive officer in February 2018.

He refers to a series of seemingly avoidable disasters that began with the early 2017 unveiling of the third-generation, all-new Continental GT. Replacing the brand’s best-selling line, the $200,000-plus coupe and convertible were meant to roll out globally for the 2018 model year. That didn’t happen.

As production got under way, the build process for the cars was found to be far more time-consuming and costly than Bentley had estimated. It took six months, an eternity in the car world, to streamline it. Next, the company realized it hadn’t properly contracted for the numerous independent evaluations necessary to certify the engines for global fuel and emissions standards. This rendered the twin turbocharged power plants churning with 8 or 12 cylinders unusable until the company met all the requirements.

The launch of the Continental had to be delayed for more than a year in key regions such as China, the U.S., and the European Union. “We ran for 50% of last year, with 50% of the models, in 50% of the markets,” Hallmark says. This is a brand that sells just 10,000 vehicles a year globally—fewer than Ford Motor Co. sells every two days in the U.S. “I would say the luxury segment, more than any other marketplace, is driven by new product,” he says. Falling behind can be catastrophic, especially in an echelon where purchases are often based on having something other people don’t.

In the absence of new product, Bentley’s fickle, au courant target consumers are presented with a proliferation of posh options these days. “Bentley really shot up in volume and visibility with the first Continental GT back in 2003 by attacking a market that didn’t otherwise exist,” says Karl Brauer, executive publisher of automotive research outlet Kelley Blue Book. There weren’t that many $150,000-plus ultraluxury automobiles then. “Now that market is pretty well blanketed,” he says.

These troubles led to Bentley’s worst fiscal years since it was acquired by the Volkswagen Group in 1998. Sales plummeted 16% from 2016 to 2018, to 9,559, despite a growing ultraluxury market and the debut of the brand’s SUV, the Bentayga (now in hybrid). The company had a loss of €288 million ($325 million) in 2018 on revenue of about $1.5 billion. Pet programs, such as a two-seat sports car and an electric powertrain, were scrapped or pushed far into the future. And Bentley had to restructure, eliminating or retiring 10% of its workforce.

Cutbacks in manufacturing and employee costs were the first step in Hallmark’s five-point recovery program. The second is refocusing on the new Continental GT coupe and convertible and the Flying Spur sedan, which will all have gone on sale globally by early next year. The third is planning for the next round of stringent emissions tests, scheduled to go into effect in 2024, to avoid delays. The fourth is adding a plug-in hybrid option to every vehicle in the lineup by 2023 to decrease the carbon footprint and broaden sales. The last is the creation of the first all-electric Bentley, though its introduction has been delayed until 2025, long after battery-powered cars will have rolled out from competitors such as Porsche, Mercedes-Benz, and Aston Martin.

Concept cars are dreams disguised as statements, and as such, the EXP 100 GT is a rolling symbol of how Bentley might propel itself out of trouble. Interestingly enough, for a brand that prides itself on delivering a certain kind of profligate British opulence, the coupe focuses on sustainability. “Luxury is generally synonymous with excess, maybe a certain level of disconnection to consequences,” Gregory says. But in the minds “of the next generation of customers, which then feeds into all of our customers, sustainability has become a really important topic. And what we want to offer is guilt-free luxury.”

This means exterior paint made from recycled rice husks, faux leather seats made from winemaking byproducts, and wood veneers carved from 5,000-year-old trees found in bogs. It means playing with “luxury theater” in a car’s interior by using glass that refracts natural light and technology that harvests and plays back natural sights, sounds, and smells. And it means using next-generation, lighter, more energy-dense batteries to give it a projected 435-mile range.

“Sustainability,” then, has a double meaning here: The company hopes the concept’s priorities will propel the brand successfully into its second century. But there are still hurdles. “I’m not convinced that tech or these other ideas will cause a huge uptick in sales,” Blue Book’s Brauer says. Plus, there’s the cars’ elite aura to consider. “Theoretically, the whole point of a brand like a Bentley is to not see one every five minutes when you’re driving around,” he adds.

Bentley says it can afford to make more cars and keep its cool. “We will focus on putting the definitive grand tourer into every product segment,” Hallmark says. “So we cover all bases—ultraperformance, ultraluxury, and ultrarefinement and relaxation. And that’s what makes a Bentley.”

To contact the editor responsible for this story: James Gaddy at jgaddy@bloomberg.net, Chris Rovzar

©2019 Bloomberg L.P.