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The Wall Street Publication > Blog > Business > Rolls-Royce, Bentley, BMW Sales Surge as Cheaper Brands Lag Behind
Business

Rolls-Royce, Bentley, BMW Sales Surge as Cheaper Brands Lag Behind

Editorial Board Published January 17, 2022
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Rolls-Royce, Bentley, BMW Sales Surge as Cheaper Brands Lag Behind
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BERLIN—Luxury car brands such as Rolls-Royce, Bentley, Porsche and BMW BMW -0.30% have reported record sales, thanks to customers who have craved them and manufacturers that have directed scarce chips toward their most profitable models.

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SHARE YOUR THOUGHTSBentley sold 14,659 cars last year, an increase of 31% from the year before and a record for the company.

With international travel stalled during the pandemic and many avenues of flashy spending closed to them, a young generation of luxury-car consumers went on a shopping spree last year.

Meanwhile, manufacturers facing shortages of semiconductors prioritized certain models.

“We are hardly affected by the chip shortage,” said Alain Favey, sales chief at Bentley Motors Ltd., which is owned by German auto maker Volkswagen AG .

“The process in the VW group is very centralized. One of the elements to decide on allocation is the margin of profitability. From that perspective we are prioritized, so we managed to get all of the chips we needed,” Mr. Favey said.

Other types of manufacturers dealing with a shortage of chips and other components have given priority to big-ticket products for similar reasons, making it harder for consumers to find cheaper alternatives.

Bentley sold 14,659 cars last year, an increase of 31% from the year before and a record for the company. Porsche, also owned by VW, sold 301,915 cars, an increase of 11% world-wide. Both brands posted growth in the U.S., Europe, and China.

By comparison, VW’s namesake brand, its biggest business by unit sales, struggled throughout the year to keep its factories operating because of the chip shortage. The main plant in Wolfsburg worked under capacity and had to scrap shifts throughout the year.

As a result, sales took a hit, falling 8.1% to 4.9 million vehicles world-wide. Sales in China, the brand’s largest single market, dropped 14.8%.

VW’s mixed performance reflects that of other mass-market manufacturers: While conventional sedans, hatchbacks and station wagons languished, sport-utility vehicles and new electric vehicles made big gains.

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Did you buy a luxury car in 2021, or do you plan to buy one in 2022? Join the conversation below.

In the U.S., BMW grew sales by 21% as the top-selling luxury brand for the third year in a row, selling 336,644 vehicles. Toyota Motor Corp.’s Lexus came in second, selling 304,476 vehicles, or 11% more than the previous year.

Tesla Inc. TSLA 1.75% was able to sidestep some of the chip shortage’s impacts, and a full year of sales for its most recent Model Y SUV helped to increase global deliveries by 87%. In the U.S., Tesla outsold Mercedes-Benz, which reported U.S. sales of 276,102 vehicles in 2021. Tesla doesn’t break out its sales by region, but Ward’s Intelligence, a consulting firm, estimates that Tesla sold around 299,000 vehicles in the U.S. last year.

Rolls-Royce, owned by Bayerische Motoren Werke AG BMW -0.30% , whose tailor-made superluxury cars have starting prices of more than $300,000, sold a record 5,586 cars last year, up 49% from the year before.

Martin Fritsches, president of Rolls-Royce Motor Cars Americas, said that buyers of superluxury cars like Rolls-Royce are younger today. The average age of a customer is about 43 years old, which means many of their clientele are in their 30s.

In part, Mr. Fritsches said, Rolls-Royce’s wealthy customers have been sheltered from the hardships felt by many during the pandemic. They benefited more from the economic recovery, the cryptocurrency boom and soaring stock prices. And many of the buyers are first-time Rolls owners, he said, including young entrepreneurs who got rich on the stock market and cryptocurrencies.

Bentley sold 14,659 cars last year, an increase of 31% from the year before and a record for the company.

Photo: ali haider/Shutterstock

New electric vehicles were another driver of growth. BMW, which fared better than many of its rivals in the chip squeeze, sold 2.5 million vehicles last year, an increase of 8.4%. Of the total, the company sold 103,855 fully electric vehicles.

“Our target for 2022 is to more than double the sales of fully electric vehicles,” said Pieter Nota, BMW’s sales chief. He said BMW was well supplied with chips throughout 2021 and through new direct relationships with chip makers he expected to get through 2022.

Mr. Nota said the effects of the chip shortage would likely continue to be felt in the first half of this year, but added that BMW’s efforts to mitigate the crisis through orders and direct relationships with chip suppliers should help ease the impact again this year.

Porsche said its electric sporty sedan, the Taycan, outsold the company’s iconic 911 sports car last year, marking a symbolic shift as even Porsche customers begin to embrace electric cars.

IHS Markit, a global industry consultant, is forecasting new light vehicle sales will rise 3.7% this year to 82.4 million vehicles, up from 2.9% in 2021 when growth was constrained by supply-chain disruptions. It expects new light vehicle sales in the U.S. will increase about 2.6% this year to 15.5 million vehicles.

General Motors plans to phase out nearly all of its gas and diesel vehicles by 2035. Leading that transition is the first fully electric Cadillac. WSJ’s Mike Colias visited a GM testing site for a ride and an exclusive interview with GM’s President Mark L. Reuss. Photo Illustration: Alexander Hotz

With the onset of the pandemic and widespread factory shutdowns in 2020, auto production dropped about 16% from 2019 to 74.6 million vehicles, according to Wards Intelligence and LMC Automotive, consulting firm groups. They said the auto industry clawed back some of this last year, with global output rising about 2% to 76.2 million vehicles. They forecast that global output will rebound 13% to 85.8 million vehicles this year, still below pre-pandemic levels.

Despite record sales, Mr. Fritsches said that Rolls-Royce will remain a small, intimate luxury brand focused on creating experiences for its customers. To appeal to younger customers, Rolls-Royce is connecting owners through an app called Whispers, which you can only access if you actually own a Rolls-Royce.

“Our customers look for the bespoke experience,” Mr. Fritsches said. “I can guarantee you that volume is not and will never be a focus topic for us.”

—Ben Foldy contributed to this article.

Write to William Boston at william.boston@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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