Bentley Personalization Boosts Profits, Says CEO Adrian Hallmark


Bentley CEO Adrian Hallmark.

Scott Mlyn | CNBC

After a banner year in 2022, Bentley Motors reported an increase in first-quarter profits largely due to car customization, CEO Adrian Hallmark said.

Bentley reported its best first trimester ever, with operating profits up 27% to 216 million euros, or about $232 million. Even more impressive, especially at a time when many automakers are seeing their profit margins under pressure, Bentley announced that its return on sales increased in the first quarter to 24.4% from 20.9% in the same period in 2022.

investment related news


The reason: Affluent buyers are spending more to customize their cars with paint colors, leather, stitching and special details.

“Customers choose one of our 62 paint colors, the 43 leathers we offer, and many options,” Hallmark told CNBC. “So it’s a total change in vehicle configuration. And they’re buying the top models, like the Speed ​​version of the Continental GT, rather than the base edition.”

Hallmark said the average price of a Bentley sold jumped 40% over the past four years, but only 9% of that increase was due to rising model prices. “The rest is content,” he said, meaning upgrades, options and customization.

The rise of personalization is generating record profits in the supercar segment, from Rolls-Royce and Ferrari to Lamborghini, Aston Martin and McLaren. Still full of cash from the Covid-19 pandemic and eager to own unique rides that stand out from the crowd, today’s wealthy car buyers are willing to pay high prices for special details.

In its first-quarter earnings call, Ferrari said its adjusted EBITDA increased by 85 million euros, or about $91.6 million, thanks to “higher customizations which contributed above our projections.”

Rolls-Royce’s Bespoke department has become famous for responding to unusual customer requests, from matching the paint color of a piece of antique Japanese ceramics to copying a Hermès design scheme onto the private jet. ‘a customer.

Bentley’s Mulliner Edition department at the company’s Crewe factory is producing a record number of unique Bentleys with special paint colours, metallic finishes and embroidery. Some customers want their names or family crests embroidered on the seats, while others want special interior lighting or carbon fiber detailing.

One of the company’s most popular options for its Continental model is a rotating screen, where a section of the dashboard changes from a plain carbon face to an infotainment touchscreen. Despite the high cost, at more than $6,000, the upgrade was purchased by nearly three-quarters of buyers, according to the company.

“The whole world of luxury is changing,” Hallmark said. “It’s not just cars, it’s fashion, everything. If customers spend that much money on something, they’d rather pay a bit more for the upgrade or the option to have something really special.”

Beyond upgrades and customization, Hallmark said Bentley sees no signs of slowing demand due to rising rates, falling inventory and recession fears.

“Order intake in the US, like in most of our markets right now, is really strong,” he said. While prices for pre-owned or pre-owned Bentleys are falling slightly, Hallmark said the adjustment was healthy.

“We can see in the secondary market that residual values, instead of being crazy and above retail like they used to be, are now normalizing. But demand is still very strong.”

Source link

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top