Volkswagen’s Bentley brand set the sales books on fire in 2007 – selling a record-setting 10,014 vehicles – but the global economic crisis is making that record seem like it’s more than just a year removed. Bentley’s sales plummeted by 20 percent in 2008, forcing the British automaker to announce further production cuts for 2009.
Bentley announced earlier on Monday that falling sales will force the luxury automaker to idle its Crewe plant for up to seven weeks. “There’s a global downturn in the automotive market,” Bentley spokesman Mike Hawes told AFP. “The market continues to be in decline globally so we have decided to stop production for six or seven weeks.”
The Crewe plant will be shuttered between March and May.
Bentley launched an initiative last May to cut production by 15 percent, but dropping demand has far outpaced that plan. Additionally, 1,400 of Bentley’s 4,000 workers are already on a three-day work week.
Although the current economic situation – particularly in the U.S. – is partly to blame for slumping demand, Bentley’s fuel-inefficient brand image is also behind the sales slide. However, Bentley is planning to counter the latter by announcing its bio-fuel plans at March’s Geneva Motor Show.
01/26, 12:30 PM
posted by:
Borat
Who would think that those who drive Bentleys would be affected? At least in 2001 some of that crowd was sentenced to Club Fed and was doing time so demand for luxury was curtained. I haven’t heard anyone answering justice dept lately, so what gives?
01/26, 1:24 PM
posted by:
jonmiles
People are sheep; rich people are no different
01/26, 1:27 PM
posted by:
yarddog82abn
Say what?…. And I was about to put in my order in…..
01/26, 4:01 PM
posted by:
Dindel
What happens after May? Closed for the summer holidays?
01/26, 5:41 PM
posted by:
FlyingB
@Borat: that’s a good (and commonly asked) question. Here’s an attempt at an answer.
Hypothetical: You have two people in a large company. Barb and Ben. Barb is one of the top executives–one of the founders, in fact–and has a very high income. Barb has more than enough income to purchase a Bentley. When the economy slows, and Barb’s income drops, will the economic downturn alter Barb’s buying habits? No. She has less income, but still enough to comfortably purchase a Bentley.
Ben is a junior executive. Two years ago, Ben was promoted, and was given a corresponding salary increase. Before the promotion, Ben did not have the income to purchase a Bentley. But after the promotion, Ben could afford to purchase a Bentley, though it would be at his budget limit. Then the economy slows, profits shrink at the company, and everyone from the CEO down takes a 25% pay cut. Has the economic downturn affected Ben’s choices for a new car? Yes.
The more severe the decline in the economy, the more people there are like Ben, whatever their circumstances. The point of the hypothetical is not to contrast “rich” vs. “poor,” or argue about pay equity, “fairness,” etc., but simply to give an example as to why, as you said, “those who drive Bentleys would be affected.”
Take someone like me–the economy of scale still holds. If my pay is cut, I don’t have to worry about where I get my next meal from, or how to keep the lights on, but I will forget about buying that new shirt and tie, or new set of golf clubs, or taking that vacation to wherever this year–you get the point.
I hope that helps.
01/27, 1:24 PM
posted by:
SloW8
More on the Barb and Ben scenario… Barb was smart enough to help start the successful company and knows that cutting a junior execs salary by 25% and showing up in a Bentley will cause resentment. So she does alter her buying habits, not out of need like the others, but because she is smart.
The other problem is that an older couple close to retirement just saw their investments drop by 30-40%. Even though they have enough to buy the car, the mental picture of all those $ gone causes them to pull the reins in tighter and forgo the luxury purchase. They will take the wait and see attitude and make due with the S Class they already have.
The wait and see is what is killing us…