UPDATE 1-Bentley bets on luxury SUV to build on record sales

Wed Jan 8, 2014 9:18am EST

By Sarah Young and Andreas Cremer

LONDON Jan 8 (Reuters) - Luxury British car maker Bentley Motors is betting on a new sport utility vehicle (SUV) to build on the success of its Flying Spur saloon that drove sales to a record high last year.

Bentley, owned by Germany's Volkswagen, sold 10,120 ultra-luxury saloons, coupes and convertibles cars in 2013, 19 percent more than the previous year and beating a previous high set in 2007, as demand from the Americas outweighed shrinking deliveries in China.

"We continue to be very successful in winning new customers and are confident that 2014 will be another successful year," Bentley's chairman and chief executive Wolfgang Schreiber said on Wednesday.

The new generation of the Flying Spur saloon, rolled out last year, and a convertible version of the Continental GT Speed coupe, introduced in late 2012, helped boost business.

Bentley aims to grow sales to 15,000 cars by 2018 and said a new SUV model which should be on the road within three years would help reach its target.

"We are seeing ... 2,000 pre-orders of that car from people who haven't seen the final design and have no idea of the price," Schreiber told reporters at a press conference.

"They've said okay I will buy it, and therefore there is demand and maybe we can create a new segment, a luxury SUV segment."

Internal forecasts for Bentley's SUV model were for annual sales of the vehicle of at least 3,000.

The new model will compete with the Range Rover and Porsche's Cayenne Turbo, Schreiber said.

Bentley, which says its average customer has seven or eight cars, defines the luxury market as cars worth more than 150,000 euros ($204,000) and estimates it had a 25 percent share of that market in 2013.

CHINA CHALLENGING

Sales in the Americas, Bentley's No. 1 market, surged 28 percent to 3,140 cars while deliveries to China, its second biggest market, fell 2.8 percent to 2,191, helped by a pick up in the fourth quarter when the Flying Spur became available.

In the first nine months of 2013, Chinese sales fell 17 percent as a range of luxury brands including Lamborghini, LVMH and Burberry reported an abrupt cooling in demand for high-end goods in the country.

Although optimistic about growth in China in the longer term, the group was cautious on the outlook for this year, sales and marketing director Kevin Rose said.

"I expect some growth for us because we didn't have Flying Spur all of last year but we will have it all of this year. I don't think we'll be helped too much by the market," he said.

In his view, the challenges Bentley faces in China are that it is currently seen as less acceptable to display wealth, and some of the country's richest people are migrating elsewhere.

Those individuals relocating maintained their appetite for Bentley, however.

"If you take places like San Diego, Vancouver, a high proportion of the sales are to Chinese nationals," Rose said.

Back at the company's factory in the northern English town of Crewe, a facility which used to make engines for the Spitfire fighter planes used during the second world war, preparations are underway to start building the new SUV.

Manufacturing the new model will create 400 new jobs at the factory, Schreiber said.