Bentley’s CEO Warns of Price Increases Due to US Tariffs.
Bentley, the luxury car brand owned by Volkswagen, has reported a drop in profits, citing weaker demand from China as the primary factor. However, the company’s CEO, Frank-Steffen Walliser, warned that the looming threat of tariffs from the United States would lead to increased costs for consumers. Bentley posted an operating profit of €373 million (£314 million) in 2024, which is the fourth-highest in the company’s 105-year history. However, this figure represents a significant drop of more than 30% from the previous year, when the company made €589 million.
Walliser, who took over as Bentley’s CEO in July, described 2024 as a “positive year despite the headwinds,” but noted that the potential impact of tariffs from President Donald Trump remains a concern for the company. Last month, Trump suggested imposing tariffs of up to 25% on cars, which could force manufacturers to shift production to the United States. However, such a move is unlikely to be feasible for luxury brands like Bentley, whose reputation relies heavily on production at its factory in Crewe, Cheshire, England. As a result, Bentley is likely to pass these additional costs onto customers.
“We are assessing different scenarios on how to handle it, but it would eventually be passed on to consumers,” Walliser said. Bentley’s stance mirrors that of Volkswagen’s Audi brand, which also said it is considering passing at least some of the tariff costs onto buyers in the form of price increases.
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Despite the challenges posed by potential tariffs, Walliser remains focused on Bentley’s goal of prioritizing “value over volume.” Executives claim that the company is seeking to increase revenue per car sold, with about 70% of customers opting for bespoke content that significantly raises the price. In fact, one buyer in 2024 requested 3D-printed rose gold details inside their car, highlighting the growing trend of personalized luxury.
However, Walliser pointed out that the most significant factor behind Bentley’s declining profits in 2024 was a slowdown in demand from China. As the world’s second-largest economy experiences weaker growth, luxury goods sales, including high-end cars like Bentley’s, have been negatively affected. “The market challenges definitely remain,” Walliser said, adding, “We have a very volatile political situation.”
Bentley’s finance chief, Jan-Henrik Lafrentz, expressed hope that Chinese demand would “hopefully level out this year.” An improvement in the Chinese market could be crucial for Bentley and other automakers, especially as they aim to transition to electric vehicles. In fact, Bentley has already delayed the launch of its electric sports utility vehicle (SUV) to 2026, with the first deliveries expected in 2027. This delay comes amid an industry-wide adjustment to lower-than-expected demand for electric cars.
Bentley had initially planned to phase out the sale of petrol cars by 2030, but the company now intends to extend this deadline to 2035, five years later than originally planned. Walliser acknowledged that the company’s earlier projections for electric vehicles might have been “a little bit too bullish.” However, Lafrentz remains optimistic that Bentley’s electric cars will be as profitable as its petrol and hybrid models, saying, “That’s a clear target.”
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While Bentley remains optimistic about the future, the looming threat of tariffs and the challenges in the Chinese market paint a grim picture for the luxury automaker. The potential for price hikes, especially in light of US tariffs, will likely lead to a reduction in consumer purchasing power, making it even more difficult for luxury brands to maintain steady sales. Given the uncertainty surrounding the global economy, the continuation of Trump’s aggressive trade policies could further strain luxury carmakers like Bentley, making the road ahead more challenging.
In conclusion, the potential fallout from Trump’s tariffs is a major concern for Bentley and the broader luxury car industry. While the company’s shift toward increased customization and value over volume offers some mitigation, these tariffs could still result in higher prices for consumers. This makes luxury cars less accessible to a wider audience and could stifle the growth of the sector, especially as the market faces additional hurdles like the slowdown in China and lower-than-expected demand for electric vehicles. Trump's trade policies could significantly hurt the automotive industry, leaving consumers to bear the brunt of these escalating costs.
