Bentley, Lamborghini may delay SUVs, sources say
BERLIN (Reuters) -- Bentley's and Lamborghini's plans to launch superluxury SUVs may be put on hold to save cash for parent Volkswagen Group, company sources said, in a sign that Europe's economic crisis even is beginning to cause pain at the German auto giant.
UK-based Bentley and the Italian supercar maker rolled out extravagant SUV concepts at auto shows in Geneva and Beijing this year, with production awaiting approval by VW's management board.
The concepts, dubbed the Bentley EXP 9 F SUV and the Lamborghini Urus, are aimed at significantly boosting profitability at the automakers, particularly Lamborghini, which has lost money since 2009.
Bentley declined to say whether the SUV would be delayed while Lamborghini CEO Stephan Winkelmann told Reuters on Sept. 27 that even though VW has yet to sign off on the Urus, the Italian manufacturer would continue with the model's development.
The Urus concept hints at an SUV that Lamborghini hopes will triple its global sales.
The two automakers aim to replicate sister brand Porsche's success with the Cayenne SUV, which now accounts for half the sports car maker's deliveries. But exorbitant pricing, fierce competition and a limited pool of buyers in markets such as China may restrain their sales, according to research firm IHS Automotive.
IHS said production of the Bentley SUV, scheduled to start in late 2014, might peak at fewer than 4,000 cars in 2016, while the Lamborghini Urus could reach a maximum of fewer than 2,400 in 2018, a year after the model started rolling off the line.
"It'll be tough to turn the models into sustainable business cases," Frankfurt-based IHS analyst Henner Lehne said.
Bentley and Lamborghini would be up against stiff new competition with their plush SUVs; Fiat Group's Maserati will start production next year of the Jeep-based Kubang, while UK-based Land Rover will launch the new Range Rover Sport in 2014. Ferrari has had a family car, the FF, its biggest model, in its range since last year.
Decision may come in November
Grappling with unforeseen production cuts and slowing auto sales, VW may postpone the models as it reviews planned spending on equipment, factories and vehicles. The plan is due to be ratified by VW's supervisory board on Nov. 23, two company sources said.
"Such vehicles are anything but obligatory during a crisis," said Frankfurt-based Equinet AG analyst Tim Schuldt. "Delaying their launch would be no drama but help save costs."
Despite poor customer demand in the region, VW Group has managed to outperform the European market this year.
The German company's eight-month EU and EFTA sales were flat at 2.14 million cars, compared with a 6.6 percent drop to 8.59 million vehicles for the region as a whole.
The automaker said on Tuesday that sales at its flagship passenger car brand rose just 4.3 percent to 492,500 vehicles in September, the smallest gain in eight months.
VW halted production in Germany of its Passat model for two days last week as part of a wider move to cut group output by about 300,000 vehicles to 9.4 million cars this year.
That would be up on last year's output of 8.5 million but short of the goal originally set for 2012 of about 9.7 million, company sources said on Oct. 5.
Finance chief Hans Dieter Poetsch signaled at the Paris auto show that the slump in European demand could spark further austerity measures at VW.
"In this environment, we need to have a considerable amount of liquidity available," Poetsch said on Sept. 26. "It's normal that one looks for items that aren't imperative," he added, referring to investments that could potentially be pushed back.
Bentley will continue to push for the model to get the nod from VW's leadership, spokeswoman Kerstin Sachl said on Wednesday, adding the carmaker was hoping for a decision before the end of the year.
Automotive News Europe contributed to this reportContact Automotive News