Volkswagen AG, Europe’s largest carmaker, gave its ultra-luxury Bentley brand approval to build a sport-utility vehicle (SUV) to expand beyond high-end sedans and coupes, according to two people familiar with the matter.
Details on the new model will be released as early as this week, said the people, who asked not to be identified because preparations for the announcement haven’t been finalized. While the vehicle will be based on the EXP 9 F concept presented at the Geneva motor show last year, the design has changed substantially, the people said.
“It’s certainly a courageous step to see if other types of vehicles can establish themselves in the super-luxury segment,” said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany. “The business case isn’t that easy because the segment is pretty tight.”
The vehicle will be the world’s most expensive SUV and cost from around €180,000 ($237,000), according to previous comments by company executives. A new model typically takes three years to bring to market and development costs normally exceed €100 million.
The SUV is critical to Volkswagen’s goal to almost double Bentley’s sales to 15,000 vehicles by 2018. The addition of the SUV mimics the strategy followed by Porsche, which flanked its sports cars with the Cayenne SUV, now the brand’s best-seller.
Bentley’s SUV prototype stuck out at its presentation in Geneva in March 2012. The car sported flourishes like picnic hampers for polo-ground tailgating, 23-inch wheels and gaping turbine-like air intakes. The car will share underpinnings with the Audi Q7 and final assembly will take place in Crewe, England, according to past comments from company executives.
The Bentley SUV will complement the brand’s lineup, comprising the Continental GT coupe and convertible and the Flying Spur and Mulsanne sedans. Bentley delivered 8,510 cars last year, up 22% from 2011. Operating profit jumped to €100 million in 2012 from €8 million a year earlier.
The new Bentley will compete with vehicles like the €151,700 Porsche Cayenne Turbo S, the €131,300 Mercedes- Benz GL63 AMG, and the top-of-the-line Range Rover from Tata Motors Ltd’s Land Rover marque, which starts at €112,400.
The Bentley model is part of a trend of rolling out ever more expensive SUVs to cater to wealthy buyers in emerging markets that aren’t tied to traditional sedans. Fiat SpA’s Maserati plans to introduce the Levante crossover as early as 2015. Bentley’s sister brand Lamborghini showed an SUV concept in China last year that it hopes to get approval to build.
Demand will mostly likely come from markets like China and Russia, where there’s a growing class of wealthy consumers and SUVs are popular, said Jonathon Poskitt, an analyst with LMC Automotive in Oxford, England.
This is super premium moving into uncharted territory, said Poskitt. The others will be closely watching how Bentley does.