TESLA drivers are fond of the electric vehicleβs giant touchscreen display, but for more conservative buyers of luxury cars such digital systems might seem a tad unrefined, Bloomberg reports.
Thankfully, Britainβs Bentley has solved this very first-world problem on its new Continental GT model by offering a revolving panel that will spin around to show analogue gauges instead of the screen, when so desired.
Unfortunately, neat touches like this havenβt helped the Volkswagen-owned carmaker actually make money.
On the contrary, Bentley β which is celebrating its centenary β reported a 288 million euros (AUD$456 million) operating loss last year, the German parentβs annual report showed on Tuesday.
Bentleyβs losses are unsettling because, in theory, it should benefit from economies of scale from being part of the much larger VW group.
The red ink also runs counter to the idea that luxury carmakers generate fatter profits than mass-market brands.
VWβs Skoda unit makes far more money than Bentley.
VWβs stable of βsuper-premiumβ brands is certainly valuable, but thatβs mostly down to Porsche.
The sportscar company made a 17.5 percent operating return on sales last year, compared to Bentleyβs negative 18.5 percent.
In truth, the hefty profit margins made by Porsche and rival Ferrari NV are the exception in the car industry β something that shareholders of recently-listed Aston Martin Lagonda Global Holdings Plc might want to bear in mind.
There are several explanations for Bentleyβs malaise.
The weak pound has pushed up the cost of imported components, the company is having to invest heavily to electrify its product line-up and there was a one-off item related to the pension plan.
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The launch of the Continental GT was delayed because management decided some elements werenβt up to scratch. As a result, the car wasnβt available in the US and China, key markets for the brand.
New emission tests caused more delays, meaning customer deliveries fell 5 percent to 10,500 units. Thatβs unhelpful for a company with lots of fixed costs.
Curiously, production of Bentleyβs Bentayga SUV fell 16 percent last year to just 4100 units, and sales declined by a single-digit percentage.
While thatβs due principally to those emissions hold-ups, it might also indicate that demand for the vehicle has plateaued.
A hybrid version of the Bentayga due this year may woo more environmentally-conscious customers, but the vehicleβs tank-like looks might still not be to everyoneβs taste. In any case, the SUV hasnβt been a panacea for profits, as one might have expected.
No wonder then that Bentley replaced its chief executive last year and VW boss Herbert Diess says in the annual report that the British unit will have to βwork more efficiently.β
While Bentley does expect to return to profit in 2019, a difficult Brexit wouldnβt help. There seems little hope that its profits will rival Ferrariβs anytime soon.
Bentleyβs operating margin has averaged 6.8 percent over the past five years, while Ferrari has achieved 18 percent over the same period, according to Bernstein analyst Max Warburton.
He points too to the similarities with Aston Martin on pricing and customers as well as profitability.
Of course, one way that Aston can avoid Bentleyβs fate is to make sure its own forthcoming SUV looks better than the Bentayga.
That shouldnβt be too difficult.
