Battle of the ultrapremium automakers

Paul A. Eisenstein

Think of it as one-time siblings rivalry.

For roughly seven decades, Rolls-Royce and Bentley were two faces of the same platinum coin. Separated as part of a bitter bidding war between two of Germany’s most powerful automakers, Rolls and Bentley have lately been carving out separate and unique niches within the ultrapremium automotive market.

But with the upcoming launch of a pair of new products, the one-time partners are about to face off in a direct battle for the car market’s most prestigious and affluent buyers.

The warning shots were fired earlier this month at the Frankfurt Motor Show, where Bentley staged the formal public roll-out of its big Mulsanne, the first complete remake of its top-line sedan, in a decade. At the other end of the big Frankfurt Messe convention center, Rolls lifted the covers on the production version of its new Ghost, a sedan designed to take the brand a bit down-market.

“They’ve been competing in different segments, until now,” explains Joe Phillippi of AutoTrends consulting. “Now, they’re going to go head-to-head.”

In their early years, in the so-called Golden Era of luxury motoring, Rolls-Royce and Bentley were fierce competitors. The latter marque was chronically underfunded and, in 1931, reluctantly agreed to sell itself to Rolls which, over the decades, became the dominant brand.

A change in brands’ influence
By the late 1980s, Bentley models accounted for barely 5 percent of the company’s total sales, but then it received a reprieve. Hoping to win over younger, more performance-oriented buyers, Bentley was relaunched as the sportier nameplate, with models like the Turbo R which could, despite weighing in at nearly three tons, launch from 0 to 60 in barely five seconds. By the mid-‘90s, the situation had flip-flopped and Bentley was the better-selling brand.

Mike Clarke / AFP - Getty Images Models stand next to a Rolls Royce Ghost, a sedan that can take the brand down-market.

Then, in 1998, the British conglomerate, Vickers, decided to sell off its automotive holdings. The subsequent sales process took some unexpected detours. German maker BMW made a strong bid and thought it was the new owner, but then came a counteroffer from Volkswagen, which BMW declined to match. In a series of twists and turns, VW eventually wound up with Bentley, while its German rival gained control of Rolls.

Initially, the severed brands took aim at different niches of the ultrapremium market. With the massive and formal $400,000 Phantom, Rolls-Royce targeted the most affluent of old money buyers, those preferring to be chauffeur-driven. Bentley aimed for a more nouveau riche audience that enjoyed the performance of the smaller, more nimble Continental, barely half the price of the Phantom.

It took Rolls time to gain momentum. Sales of the Phantom and its big derivatives climbed from just 300 in 2002, to 1,212 last year. With the launch of the Continental line, Bentley took off, hitting a worldwide peak of 10,014, in 2007. Both makers have been hit hard by the global economic downturn, however. Rolls sales stood at just 411 for the first eight months of 2009, a more than one-third decline. Bentley, with sales of 2,881, is down nearly 50 percent.

“It’s difficult to be seen driving up to your office” in a car like a Phantom “when you’re laying people off,” suggests Jim O’Donnell, CEO of BMW North America, in way of explanation for the decline.

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