Yahoo Finance Bentley CEO: ‘Never seen spending patterns’ like this before with luxury consumer
For British luxury automaker Bentley (VOW.DE), 2022 may leave a strong 2021 in the dust.
Through the first nine months of 2022, Bentley reported record operating profit of €575 million ($577,129,608), more than double the amount from a year ago. The previous full-year record high for operating profit was €389 million ($383,651,250.00). Revenue through the first nine months came in at €2.490 billion ($2,455,762,500.00), a jump of 28% from a year ago.
For Bentley CEO Adrian Hallmark, the results are astonishing because the automaker only increased sales of cars by 3%, yet profitability soared.
“The exciting part for me is that we've doubled the profit year to date, with only a 3% increase in [sales], and that's all about quality of margin,” Hallmark says to Yahoo Finance. “It's all about these higher price cars with more personalization, order bank driven, not stock build driven; and we've got the right formula, and we're going to be ruthless about maintaining that [profit] pool.”
Hallmark and the Bentley team were finding that their well-healed clientele were more interested in customization, wanted to be a part of that process, and were willing to pay for it. Prospective and new clients can visit the Bentley factory in Crewe, England if they wish to go through the entire customization process, which can result in literally millions of different combinations.
The strong push for customization from Bentley clients is so strong that even a seasoned exec like Hallmark is blown away.
“I've been in this industry and in this sector for nearly 28 years. I've never seen spending patterns like it and not just in Bentley,” Hallmark says. “The diversity of what people are ordering, exterior and interior is just fundamentally changed. So there's more customers out there. And they're way more interested now in self expression. And in personalization.”
Hallmark says Bentley has optimized the factory and its processes, in order to add the custom work and myriad of options available for cars to the factory line itself or near it, in order streamline production. He says he and the team have “industrialized complexity.”
When asked why the luxury client, or high net worth individual, has been so resilient in this uncertain economic environment, Hallmark says two factors might be at play here.
Research Bentley cites from Credit Suisse finds that not only have the number of high net worth individuals been rising dramatically over the past 20 years, those individuals are actually more wealthier than before.
“There's four times more high net worth individuals recorded than 20 years before, but the other key factor is the average net worth is more than three times higher,” Hallmark says the research says. Those are great demographics for a company that caters to clients worth millions.
Bentley also discussed the company’s big push into electrification, where it intends to debut its first EV in 2025, with plans to go fully EV by 2030.
Hallmark says a growing number of their clientele are asking for EV options. And that can be seen with Bentley domestic luxury rival Rolls-Royce Motorcars, which just debuted its Spectre EV.
Though Hallmark says the Spectre is an impressive effort, Bentley’s first EV will offer more capability, in terms of range, coupled with services to make switching to EVs a more luxury-focused option.
“[It’s] got to have credible grand touring range, because that's what we stand for,” Hallmark says, because most of its owners actually drive their Bentleys, dail. “And the other key factor is the charge technology, the speed of charging, and a luxury charging offer outside the home, we think is important to complement the cars themselves.”
As far any performance specs for the upcoming Bentley, Hallmark is keep that information close to the vest. But one thing’s for sure - Bentley’s well-healed clientele will be able to order it in whatever color, interior stitching, leather and wood combination their heart, and wallet, desires.
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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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