Bentley’s boss blamed the British luxury car maker’s sluggish sales on the “level of emotional sensitivity” of its wealthy customers, before announcing on Friday that it would switch to a rival.
Adrian Hallmark, who was in the driver’s seat at Bentley for six years, said sales in 2023 were down 11%, the first decline after four consecutive years of sales growth.
“Despite our customers still being able to afford our cars, they were becoming more emotionally sensitive and demand was slowing.” Hallmark told CNN..
The automaker, long beloved by the upper class and the late Queen Elizabeth II for its elegance, will no longer be at the helm of Hallmark. He will move to run rival luxury brand Aston Martin on October 1.
A Bentley spokesperson told the Post on Friday that Hallmark’s withdrawal was unrelated to the decline in sales.
The company also said the drop in sales was due to high-income customers worried about “the possibility of being seen driving a shiny new Bentley if their friends, family or employees face further financial hardship.” It is said that this is due to the fact that
Furthermore, customers are sensitive to “changes in interest rates.” [which] When you get a quote to modify your car, your payments will increase. Customers may be able to afford it, but are somewhat upset why they have to pay more. Others decide to wait, thinking interest rates will go down,” the Bentley spokesperson added.
Proving that even deep-pocketed buyers are sensitive to monthly payments, a company representative said 30% of customers leased a Bentley in 2023, according to CNN. , said it was a “significant increase” compared to 2022.
Consumers of all income levels have seen record monthly car payments in recent months as the Federal Reserve keeps interest rates at 22-year highs in an effort to ease inflation. has reached.
At the latest central bank meeting, which ended on Wednesday, the Fed’s benchmark overnight interest rate remained unchanged at between 5.25% and 5.50%, where it has been since July, as expected.
The average monthly payment for a new car in the U.S. in the fourth quarter of 2023 was $739 for a 68-month loan, CNN reported citing Edmunds.com.
However, for a luxury car like a Bentley, which typically sells for $210,000 to $225,000 or more, you can end up paying even more.
According to , the average interest rate for drivers with a top credit score of at least 750 is about 5.64% for a new car and 7.66% for a used car. bank rate.
Meanwhile, buyers with credit scores below 600 are looking at dismal interest rates of 14.78% and 21.55% for new and used cars, respectively.
Car leasing often offers low monthly payments for customers who pay a monthly fee that is the value of the car, the principal due each month, and the principal plus fees and interest due at the end of the lease. It means to become.
The average 36-month lease cost for the Bentley Bentayga SUV, the brand’s most popular SUV, is about $4,250, CNN reported, citing automotive website TrueCar.com.
Economically strapped American drivers are delinquent on their auto loans at record levels.
According to the New York Fed’s Microeconomic Data Center, Quarterly report on household debt and credit; Auto loan balances increased by $12 billion in the three months ended December 31, 2023.
According to a report by the Federal Reserve Bank of New York, the average loan amount (the amount borrowed for a car loan) has also increased sharply compared to the previous year.
Origination rates rose slowly at less than 1% from 2015 to 2020, rising 11% in 2021 and 10% in 2022, with the average auto loan origination amount now at $24,000. It’s getting closer.
Also in 2022, Fed officials began a campaign to raise interest rates to combat the worst inflation in 40 years.
But not all luxury car brands are hurting as a result.
Bentley’s sales have declined, while its more expensive rival Rolls-Royce sold just over 6,000 cars last year, according to CNN. This is an all-time record for an automaker whose models cost at least $350,000.
Additionally, Bentley’s cousin Lamborghini (also part of the VW Group brand) had its best year ever last year, selling more than 10,000 vehicles for the first time in its history.
Lamborghini and Ferrari also posted record profits of about $789 million and $1.36 billion, respectively, CNN reported.
Lamborghini CEO Stephan Winkelmann said the company’s success was due to the rise in the number of ultra-wealthy people around the world.
