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Coming off record sales of 10,014 vehicles last year, Bentley's 2008 isn't going as well. The super-luxury carmaker is being forced to make further cutbacks after earlier shift reductions and production slowing didn't reach far enough to counter decreased demand. According to the company, the slumping economy, and not Bentley's product line, is to blame.
The night shift on the Continental production line at the Crewe, UK factory will be dropped, affecting about 1,200 workers. Bentley's Michael Hawes explained the reduction. ""We have to reduce production further, given the ongoing lack of consumer confidence," said Hawes. "Clearly, the decline in demand is continuing and getting more severe." So far sales are down about 20% for the year, putting the company on pace to produce about 8,000 cars. In addition to the shift cutbacks, Bentley has also opened a voluntary release program this week, reports Financial Times.
In May this year the company reduced production and asked more than a third of the staff at the Crewe factory to work just a three-day week. Some 1,400 employees of Bentley's 4,000 strong staff are already working the reduced shift in an effort to cut production by around 15%, with blame being centered on falling sales.
The reduction in sales, which had occurred mostly in the U.S., has been attributed to a variety of factors, including higher petrol prices and carbon taxes. Interestingly, brand image may also play a factor in Bentley’s fall in sales - people are becoming more and more reluctant to be seen in exorbitant and environmentally apathetic cars such as those built by Bentley.
The production cut will affect slower-selling models such as the Arnage and Azure, and staff will stay on full pay until production is stepped up again under a "time banking" agreement, reports the Financial Times. Bentley is expecting the situation to remain challenging for the rest of this year and into the start of next year.
Bentley is by no means the only luxury manufacturer to have suffered sluggish sales this year, with across-the-board declines in growth affecting much of the premium segment.
Last year Bentley posted a new operating profit record of €155 million ($200 million) based on sales of €1.37 billion ($1.77 billion). However, even with the production cuts the carmaker’s output this year is still impressive considering that just five years ago it was only selling around 1,000 vehicles per year.
Source: Bentley announces further production cuts as demand drops - MotorAuthority - Car news, reviews, spy shots
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