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Bentley spreads its wings, hires jets to fly car bodies to Britain under Brexit

FRANKFURT — Bentley, the luxury carmaker owned by Volkswagen, has booked five Antonov cargo jets to help overcome potential supply bottlenecks in the event of a disorderly exit of Britain from the European Union, the carmaker said on Wednesday. Car manufacturers are securing additional supply routes as policymakers in Brussels and Westminster seek to strike a deal to determine the future trading relationship with continental Europe after Britain exits the European Union. Bentley, which makes high end sports cars, buys 90% of its components from continental Europe, and sells around 24% of its cars into Europe, Chief Executive Adrian Hallmark told the Financial Times' Future of the Car summit. "We have spent two years planning. We have five Antonovs that we have on reserve to fly bodies to Manchester," Hallmark said, adding that in addition to shifting car bodies by air, Bentley has hiked the level of spare parts stored for production. "We used to run just-in-time with two days stock. Now we have 14 days stock. That's 14 working days, so that's three weeks of stock," he said. The company has booked additional warehouses and planned new logistics routes in case traditional supply methods are hampered by bottlenecks. If Britain fails to secure a negotiated trade agreement with European policymakers, Bentley would be able to absorb 10% import tariffs by raising prices and cutting costs. This would be less damaging than supply disruptions. "It is not existential as long as everything flows. Stopping flows is far more dangerous than Brexit tariffs," Hallmark said, referring to supply bottlenecks. This year Bentley expects to sell more than 10,000 luxury cars and to reach breakeven, mainly thanks to a rebound in demand in China, Hallmark said. China sales are up 35% when compared with before the COVID-19 crisis. Sales in Europe and the United States up 15% Hallmark said. "Overall we are in a position where we will do well over 10,000 sales this year," he said via Webcast. "We are on the cusp of going beyond breakeven."

If VW defaults on loans it may sell Bentley or Lamborghini

If something goes catastrophically wrong with Volkswagen Group's recent $21 billion loan, brands like Bentley or Lamborghini could hit the auction block. According to two insiders to Reuters, the beleaguered German automaker agrees with its creditors to sell assets if the company somehow can't pay back the debt in a year. One of these anonymous people claimed the company hasn't yet deliberated over what to sell. However, the sources were willing to speculate that the power engineering portion of Man could be among the first to go. "Volkswagen may also consider divesting luxury car brands Bentley and Lamborghini or motor bike brand Ducati, although these units don't really move the needle," an insider said to Reuters. VW Group negotiated with the banks earlier this week to get the massive loan. The cash is necessary as a buffer in case the automaker doesn't have enough money on hand to repair vehicles or settle upcoming fines. VW would reportedly issue bonds in the spring to begin paying the debt. The company's bills will start racking up quickly in the new year. German authorities mandate a recall there in early 2016, and repair campaigns in the US for the 2.0- and 3.0-liter diesel engines are inevitable. There are also hundreds of class-action lawsuits to settle. The company needs to resolve its CO2 emissions scandal in Europe, too. In response to these financial threats, VW management created a cost-cutting plan to slash the research and development budget by $1.1 billion next year.

Bentley's SUV will be first of many plug-in hybrids

Bentley is not exactly a company known for its environmental credentials. Sure, it recently cut its water usage down by over a third, and given the relatively small number of vehicles it produces, the British firm's overall impact on the environment may be negligible compared to mass-market rivals. And of course, its affluent customers are hardly likely to feel the pinch of rising fuel costs, so Bentley's idea of engine downsizing has been going from twelve cylinders to eight.
That will all change with the launch of its first SUV, previewed by the controversial EXP 9 F concept and expected to be called Falcon. To hear Auto Express tell it, the luxo-ute is being designed from the get-go to incorporate a plug-in hybrid powertrain, slated to go on sale a year after the conventional version arrives late in 2015 or early 2016. But that's just the tip of the iceberg which Bentley is trying to help keep from melting.
Following the Falcon, other Bentleys are slated to get PHEV systems as well. It'll just take a while. That's because current models like the Continental and Mulsanne were never designed to incorporate PHEV powertrain systems in the first place. So while they may get them in the long run, their integration will likely have to wait until their replacements arrive.