Bentley CEO: I’ve never seen spending patterns like this

Yahoo Finance's Pras Subramanian discusses Bentley earnings, the shift to EVs, and the outlook for luxury vehicles.

Video Transcript

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JARED BLIKRE: Luxury British carmaker Bentley announcing record operating profits for the first nine months of 2022. Part of the reason, increased customization. Yahoo! Finance autos reporter, senior auto correspondent Pras Subramanian is here to tell us all about this. Now, we know Bentleys are made by hand, at least they used to, in terms of my knowledge of it. Still, they got that level of attention to detail?

PRAS SUBRAMANIAN: Yeah, still. They've sort of industrialized that process, Jared. So strong years so far for Bentley. And not surprising from what we're seeing from luxury brands. Through the first three quarters of the year, Bentley's operating profit more than doubled, like you said, Jared, to record high, compared to last year.

But get this, they've only sold 3% more cars. So Bentley Motors CEO Adrian Hallmark says, it's all about customers paying up for more goodies.

ADRIAN HALLMARK: I've been in this industry and in this sector for nearly 28 years. I've never seen spending patterns like it. And not just in Bentley, I mean, generally.

I used an analogy with Wayne earlier, if you walk down the line of our production facility, even three, four years ago, you'd see line upon line of gray, black, dark blue, dark green cars, and the occasional red one. And it was like, a dark, somber, Conservative place.

If you walk through now, it's like a circus. The color, the diversity of what people are ordering, exterior and interior, has just fundamentally changed. So there's more customers out there. And they're way more interested now in self-expression and in personalization.

And the second thing is what we've done with the product range. So the product range is the strongest it's ever been. And it's good compared with competition. But then also, we have consciously, as we say, industrialized complexity. Rather than bringing the number of variables down, we've looked at it and said, right, we know if we can do more for customers, they invest more in the product and we might make more money.

PRAS SUBRAMANIAN: Hallmark says, they don't make more money from more horsepower. But out of more stitching, more leather, and more wood. I asked Hallmark about the luxury buyer, and why they seem so insatiable right now. And he said, part of it, is because the company's research finds that the number of high-net worth individuals has been growing over the past 20 years to the point that there's four times as many compared to 20 years ago.

JARED BLIKRE: Price inflation, Pras. I guess there's a little bit more to it than that. But let me ask you about their EV plans. We've seen all the big manufacturers take the leap. And sometimes with great results, sometimes something else. What's the Bentley case?

PRAS SUBRAMANIAN: So Bentley, just like everyone else, they want to go full EV by 2030. They're gonna-- that's their goal for right now. Their first EV comes out in 2025. And I asked them about that. How is that gonna compare to the Rolls-Royce Spectre, which we saw come out a few weeks back? And he said, you know, Spectre is a fascinating car.

They like it. But they say, you know, ours is gonna be more of a grand touring car, a daily driver because they find most of their buyers actually drive their cars every day. So they want more range, things like that.

But also, talking about services. They want the charging kind of experience to be a luxury sort of experience. So they're to have like their own sort of probably bespoke network of chargers, who knows, or working through other existing companies. But my understanding is that they want it to be a concierge, almost a luxury type of service.

JARED BLIKRE: You just mentioned charging. And I know that there's no agreed on universal standard right now. How is that evolving in the US, especially as all these goals have been brought to the forefront? You know, 2030, '35, '40. What is the infrastructure look like in terms of EV charging stations?

PRAS SUBRAMANIAN: I think as of right now, I think everyone would agree that it's just there's just too few chargers out there in the public space, right? So we're seeing a lot more investment from the government here, right? That $7.5 billion meant to build out-- not only a superhighway of chargers, but also just in local areas where they don't have that many. Maybe some suburban and rural areas. So we're seeing that happen.

I think the big problem, Jared, is with the public companies, like the ChargePoints of the world, the EVgos. It's so expensive to build these chargers. And there's still not enough, I guess, critical mass of users just quite yet.

JARED BLIKRE: And we will get there someday, though. In the meantime, thank you for that report, Pras Subramanian.