bentley boss paefgen seems to fear that there might be not enough customers for all these luxury vehicles approaching...

taken from

COMPANIES & FINANCE INTERNATIONAL: Supercar makers chase super-rich drivers
By James Mackintosh, Motor Industry Editor
Financial Times; Feb 24, 2003

There are not enough customers willing to spend Pounds150,000-plus ($237,000+) on a car to support planned sales by Bentley, Rolls-Royce and Mercedes, Bentley has warned.

The Volkswagen subsidiary based in Crewe, England, is braced for a drop in sales of its Arnage T ultra-luxury models due to increased competition from the new Rolls, produced by BMW, and the new Maybach from Mercedes. Cadillac, owned by General Motors of the US, also unveiled a prototype 1,000 horsepower "uber-luxury" car at the Detroit motor show in January.

The warning will confirm scepticism among many financial analysts about the size of the sector. Many saw the large investments in developing the vehicles as driven by the egos of auto executives.

The new cars - as well as Bentley's cheaper new Continental GT, due in October - are also being launched as super-wealthy potential buyers are tightening their grip on their wallets because of plummeting stock markets.

"We think that the aggregate numbers don't stack up," said Mark Tennant, director of marketing and product strategy, said in an interview with the FT.

Rolls and Mercedes are both banking on the extra choice in the market attracting buyers, most of whom already own more than one vehicle. Both plan to sell 1,000 of their ultra-luxury cars a year, on top of the 900 a year sales of four-door Bentleys. But Bentley believes the historic average of 1,600-1,700 a year could only be boosted to a peak of 2,400 at the maximum, leaving too few sales to satisfy the business plans of all three marques.

Franz-Josef Paefgen, Bentley's chairman and chief executive, said the decisions to invest heavily in developing new top of the range cars were taken "under the influence of the bubble economy". "There are just a limited number of people in the world who are ready to make such a statement in public," he said. "And this number is shrinking rather than growing because the social environment is changing. In Europe, people want a car which is socially acceptable."

However, Rolls, which last week launched its new Phantom in the US, dismissed the concern and said it already had more than 100 firm orders from customers, despite no test drives yet being available.

Mr Paefgen said the 900-a-year sales of the Arnage would fall, although he hoped to keep the drop to a minimum. But he said the business case for Volkswagen's Pounds500m investment in Bentley was based on the new Continental, and he was "still quite optimistic" that sales targets could be met.

The company hopes to sell 3,500 Continentals a year for about Pounds110,000 each, and has already taken deposits from 3,000 customers - none of whom has yet had a test drive.