Bentley could pass costs of US tariffs to buyers due to drop in Chinese demand
The boss of Bentley has warned the carmaker would pass on the costs of threatened US tariffs to buyers, as the British luxury car brand reported a drop in profits because of weaker demand from China.
The brand, owned by Germany's Volkswagen, on Wednesday reported an operating profit of €373m (£314m) in 2024, the fourth-highest in the company's 105-year history. However, that was down more than a third from €589m the year before.
Frank-Steffen Walliser, Bentley's chief executive since July, said it had been a 'positive year despite the headwinds', but added that the threat of tariffs from Donald Trump was hanging over the manufacturer. The US president last month said that tariffs of up to 25% on cars will force manufacturers to shift production to America.
That is unlikely in the case of luxury brands like Bentley, whose cachet depends in part on continuous production at its factory in Crewe, Cheshire. That means that price increases can be easier to impose on customers without hurting sales.
'We are assessing different scenarios on how to handle it, but it would eventually be passed on to consumers,' Walliser told reporters.
Volkswagen's premium Audi brand said on Tuesday it was considering 'the extent to which we will have to pass on at least some of the tariffs to our customers in the form of price increases', and seeking a 'sweet spot' between price increases and adjusting production, Reuters reported.
'The market challenges definitely remain,' Bentley's Walliser said. 'We have a very volatile political situation.'
Bentley made revenues of €2.6bn in 2024, but declined to share the number of cars sold. It delivered 13,560 cars in 2023.
Executives claimed the company is shifting focus to 'value over volume', targeting higher revenues from every car sold. About 70% of all buyers pay for lucrative bespoke content, including one buyer in 2024 who requested 3D-printed rose gold details inside a car.
However, Walliser did say the main reason for falling profits in 2024 was weakness in demand for cars in China. A slowdown in consumption in the world's second-largest economy has weighed on sales of luxury goods.
Bentley finance boss Jan-Henrik Lafrentz said he hoped Chinese demand 'will hopefully level out this year'.
An improvement in the Chinese market could help Bentley and other carmakers to invest in the shift to electric vehicles. Bentley has delayed a planned electric sports utility vehicle (SUV) to 2026, with the first deliveries only in 2027 amid an adjustment across the car industry to lower-than-expected demand for electric cars.
Bentley in November said it will delay the end of sale of petrol cars to 2035, five years later than initially planned. Walliser said previous plans for electric cars were potentially 'a little bit too bullish'.
However, Lafrentz said Bentley expected its electric cars to be as profitable as its petrol and new hybrid models. 'That's a clear target,' he said.
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