Bentley CEO Frank-Steffen Walliser: "Looking at this year, I can say: I’m not jubilant, but the first quarter looked like normality again."
Bentley CEO Frank-Steffen Walliser talked about the challenges facing the ultraluxury brand amid President Donald Trump’s tariff war, China’s slumping luxury market and the slow transition to electric cars. Walliser spent his career at Porsche, where he was head of motor sport and head of the 911 before becoming Bentley’s boss last summer. He spoke with Micha Gebhardt, a reporter with Automotive News Europe sister publication Automobilwoche.
One of your major tasks is likely to be the first battery-electric Bentley. The launch of the BEV has been postponed, originally 2025 was targeted, now the market launch is 2027.
The market launch has not shifted that much. We are talking about a delay of three to four months — mainly due to technical reasons. We wanted to switch completely to electric mobility by 2030, but we have postponed the plan and are now taking a close look at all the possibilities for plug-in hybrids.
Are plug-in hybrid electric vehicles widely accepted in the market?
Yes, PHEVs are very well received by customers. We made a big change on our PHEVs and reduced the number of cylinders, from 12 to eight. Of course, we hear criticism from time to time, depending on the country. But essentially everyone says: The drive is better and suits the car. It is also super economical. I think that many people here at Bentley were not aware of how big this step was when it was decided. But it works in the market and that is crucial for us.
Bentley will launch a PHEV or BEV every year for the next decade. Will there still be pure combustion engines?
It depends on the market, and on the regulation, which in my opinion is anything but fixed. And of course, on the customer’s wishes. Our plan to bring a BEV or a PHEV annually leaves room for flexibility.
Can you give us an outlook on upcoming models?
We have just presented the high-powered PHEV in the Continental. In addition, there is the counterpart in the Flying Spur. This is followed by the focus on our Luxury Urban SUV [Bentley’s first BEV]. It will be slightly more compact than the Bentayga and purely electric.
Bentley's sketch of its first full-electric car shows a similar profile to the Bentayga but with a more compact footprint.
The Bentayga SUV has been Bentley’s flagship since the Mulsanne sedan was discontined. Are there any plans to bring back the Mulsanne?
The market for large sedans is stagnating and is a fraction of SUVs. A Mulsanne offers a different driving experience than an SUV, that is true. But when you look at the numbers, it’s clear that a new Mulsanne would be a hobby project.
In 2024, Bentley sold 10,600 vehicles, about 3,000 fewer than the year before. What is your goal for 2025?
We will no longer publish volumes. For us, it’s the value per vehicle that counts. We are seeing declines in sales and earnings — mainly due to model changes and high investments. We are investing €3 billion in the conversion of the Crewe plant, and last year we put the new Continental on the road. This is our core model, so of course you notice the startup phase in the figures. With a 14 percent profit margin, we are quite high up [compared with industry rivals]. Is it the complete potential we have? No, but we are also in a transition.
While we are expanding and renovating the Crewe factory, we spend three times as much on the product. A positive cash flow is an essential goal to achieve this by being self-financing and a keeping a certain independence, and to have the appropriate role in the Volkswagen Group.
As a small brand, however, we are heavily dependent on product fluctuations. Arranging a product range in such a way that it is consolidated is not something that can be done in the short term in the automotive sector. That takes four or five years. So, there may still be fluctuations. The goal, however, is to translate this into stability.
How is Bentley impacted by the global economic situation?
Our customers may also postpone a purchase because they say, “I don’t know what will happen next.” You don’t buy a Bentley because you need it, so a customer may have a different priority. In addition, depending on the region and culture, there is the question of whether it is opportune to buy a Bentley in the current situation.
Overall there are declines in the luxury segment. What we see, looking at competitors, is that new cars are selling well. If you have a new car, you have growth. But we didn’t have a new car until the model change. Looking at this year, I can say: I’m not jubilant, but the first quarter looked like normality again.
The U.S. is your most important market. What is the impact of the U.S. tariffs on imports there?
The U.S. accounts for about 30 percent of our business, and the tariffs are a serious threat. From the customer’s point of view, customs duties tend to fall into the category of taxes — and no one likes to pay taxes.
There is a psychological element because it is tariffs and not just normal price increases. There will be customers who say: “Great, finally no one can buy it anymore, only me.” But there will also be customers who do not want to pay customs duties.
No one has any experience with how this will turn out. Is it like COVID-19 or the financial crisis? Normally, only one region has problems in the triad of Europe, Asia and the U.S. However, all of them are affected by the tariffs.
Do you have a solution?
We are currently selling the vehicles we have in stock. We have agreed on a procedure with our dealers, we have clear communication with our customers. There are plans in monthly, two-month, half-year grids, everything has been worked out.
Your parent, VW Group, has held exports to the U.S in port. Does this apply to the Bentley models?
Everyone is careful with the shipping of vehicles, because tomorrow the rules could be different again. Customs clearance can be carried out five days before the ship lands. Of course, this has a risk, because the duty-paid goods are unnecessarily expensive if the conditions change on short notice. You won’t get the money back.
We don’t want to lose the momentum in the market. We have a full pipeline, but we have to see what it looks like in August, September and October.
The Black Rose Batur bespoke car is a $2.1 million showcase as Bentley seeks differentiate itself through craftsmanship, individualization and design. Just 18 examples are being built.
Will you export more vehicles to other regions, perhaps to China?
No, not to China. We are doing very well in China, we are gaining market share — but in a shrinking market. This means that we are selling fewer vehicles in absolute terms. The Chinese clientele is reserved, not only in the automotive sector, but also in fashion, classic luxury industry, watches and jewelry. We see empty malls; everything is declining sharply there.
The Chinese people are experiencing a real crisis for the first time after 25 years of growth. The customers are super cautious and are holding on to their money. Recovery in the Chinese market will take at least another year.
China is experiencing a price war for BEVs. Is this an important market for the future electric Bentley?
In China new energy vehicles, including BEVS and PHEVs, have a 50 percent market share. In this area, we are on a par with the Chinese market. And we do not have a Chinese competitor. Do we have enough experience on how to sell a high-end electric car? We are watching very closely what is happening in the market.
Is the Middle East an alternative market?
There are alternatives to the U.S. in the world that offer opportunities. The Middle East is an important market, but the U.S. is always the largest market and the second-largest is China. After that, we have Europe, including the U.K.
The Middle East is a very strong, growing market, which is especially good in terms of the value of cars. China is stronger in volume, here we sell more models at the lower end of the price range — in the Middle East it is always higher.
The clientele in China and the Middle East is different from that in Europe or the U.S. What type of customers does Bentley have in these markets?
The clientele is becoming more diverse. In the U.S. and the U.K., it’s more traditional, in the rest of Europe it’s mixed, but in China and the Middle East, we are seeing a lot of younger buyers. What is a crucial core feature for all customers is craftsmanship and design.
We see that individualization is becoming more important than ever — the expression of one’s own personality. When I walk through the production area, I can always tell whether a car is going to England, the Middle East or China. For all customers, however, the topic of status is also an important one. We like to talk about “The Art of Riding,” i.e. how do you drive — or how do you get driven.
On the subject of being driven, how important is autonomous driving for Bentley?
I push it a lot because we cannot sit back. We do not have to be the first, but if you find autonomous driving more common in the future, even in cheaper vehicles, Bentley will have to offer this technology. We have the great advantage of being able to use VW Group’s technology.
There are differences in quality, but a VW does not drive autonomously in a fundamentally different way than an Audi. I think that over time everyone will find out that being driven in a sporty way is not the silver bullet — the Bentley style is probably the most pleasant of all.
Are software-defined vehicles are a topic for Bentley?
Yes, we are switching to SDVs and are using VW Group technology and platforms. In the last 80 years, Bentley has often created something new from something existing, in different forms, with different characteristics. This also applies to SDVs, and I think it is extremely important that we can do the same. We can present Bentley-specific things.
Do over-the-air updates play a major role, or do Bentley customers buy new cars all the time anyway?
Everything is there, between a Bentley that is bought once and driven for a lifetime, or customers who buy a new car every 12 months. However, the topic of over-the-air updates is just as important to us as it is to other manufacturers. Today, we constantly make updates — every electronic device that has software needs updates. This also applies to a car.
How will Bentley differentiate itself in the future?
We will continue to distinguish ourselves primarily through craftsmanship, individualization and design. There is no reason to give it up because of the platform or motorization. We will not position our vehicles in such a way that we say: This is now primarily an electric Bentley. We will always say: This is the latest Bentley that also drives electrically.
In addition, differentiation can be represented by new functionalities. For example, I can develop new functions for the air conditioning system and introduce them into the car much easier and faster than before. It is often the case that existing functionalities in the vehicle are used differently to develop new functionalities.
This can already be seen in the new Continental with our Active Posture. The seat massage is a classic feature, but we have developed an active mobilization of the passenger, with a very slight movement, but throughout the journey, to stimulate blood circulation and muscles. The idea behind it is always that the driver gets out of the vehicle feeling better than when they got in.
One can imagine even more in this direction. Many people sit in the car for three or four hours — longer than at the doctor’s office. There is a lot you can tell the customer, from the heartbeat to the attention span. A heart-pulse laboratory, so to speak. This is also how you could differentiate yourself, for example.
