LONDON - Starting in the UK, Rolls-Royce and Bentley Motor Cars Ltd. is introducing two used-car certification programs - one for each brand - designed to restore customer confidence in the long-term value of the marques.
That confidence was badly shaken following the 479 million (A759 million) sale of the company by Vickers plc to Volkswagen AG in 1998, and the subsequent split of the marques that gave Rolls-Royce to BMW and Bentley to VW.
The resulting uncertainty caused residual values to plummet, a fact the company acknowledges.
Malcolm Wade, Rolls-Royce managing director for the UK and the Middle East, said: 'The business went through a traumatic period with the sale of the company. I don't think anybody realized the implications this would have on our market plans. Rolls-Royce and Bentley owners voted significantly with their feet.'
They didn't buy new cars, and sales plunged even though a new Rolls-Royce Silver Seraph and Bentley Arnage had just been introduced in 1998. When new cars aren't selling, used-car values plunge. Rolls-Royce and Bentley were forced to use incentives. The company took the drastic step of cutting off new-car supply in order to revive used-car prices. That hurt dealer margins.
Bentley further complicated matters by reintroducing its 6.75-liter V-8 to satisfy buyers who weren't happy with the BMW V-8 introduced in the Arnage in 1998. That left dealers with two Arnages, the Red Label with the big Bentley engine and the Green Label with the twin-turbo BMW V-8.
'The customer is invited to LeMans to purchase the Green Label,' said Jacques Beherman, a Rolls-Royce and Bentley dealer in Brussels, referring to the 1998 launch of the BMW-engined Arnage. Beherman is losing his franchise (see story on left). 'One year later that car has no value on the used-car market.'
One US dealer who sells Rolls-Royce, Bentley, Ferrari and other prestige brands, said a 1996 Bentley Brooklands has depreciated rapidly compared to a Ferrari F355 roadster of comparable vintage.
Rolls-Royce and Bentley believes the comprehensive certification programs, which have become the ticket to entry in the luxury segment, will rebuild the values.
'Our residuals have to be the best in the industry bar none,' said Wade.
Daren Wiseman, senior editor of CAP Black Book, a UK-based guide to residual values, said Rolls-Royce and Bentley residuals have suffered the past few years for a number of reasons. But the decline has been no more serious than for other vehicles, he said. Wiseman predicted residuals will firm up in the near future if the company continues to take steps to halt the decline.
The new programs, called Rolls-Royce Approved Pre-Owned Motor Cars and Bentley Approved Pre-Owned Motor Cars, replace Guaranteed Motor Cars, which has been in place since 1995.
The programs will take effect in the UK immediately. Europe will follow in the third or fourth quarter.
Customers will receive unlimited mileage warranties covering up to three years, roadside assistance and full service histories. Customers not happy with their second-hand vehicles can return them within 30 days or 1,000 miles.