Yahoo Autos Bentley Blames ‘Emotional Sensitivity’ For Slow Sales
Good morning! It’s Tuesday, March 19, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: “Emotional Sensitivity” Slows Bentley Sales
Bentley reported a lower-than-expected operating profit for 2023 this week due to high interest rates and a weak-ish economy, but said its performance had stabilized and new model launches would help it in 2024. From Reuters:
“We had an uneven performance for the first time in about four years,” CEO Adrian Hallmark told reporters. “Even though our customers can still afford our cars... there was a level of emotional sensitivity that slowed down demand.”
I’m not exactly sure what “emotional sensitivity” means. Is it wokeness? I feel like it’s wokeness.
For those who leased rather than bought cars with a starting pre-tax price above 220,000 euros ($238,590), interest rates had led to a tripling in monthly fees last year, Hallmark said.
He said the launch of four high-performance hybrids this year should spur sales as the company gears up to launch its first fully electric Bentley in 2026.
Bentley is aiming for an all-electric model lineup by 2030, but Hallmark said its hybrids were likely to be on sale after that deadline as the company seeks to ensure a return on its substantial investment.
The luxury automaker in January reported an 11% drop in sales for 2023 following a record year in 2022.
The British luxury unit of Volkswagen posted an operating profit of 589 million pounds ($748 million) for 2023, down nearly 17% from 708 million pounds in 2022.
Reuters says revenue was down 13 percent (about $3.7 billion) from just a year earlier, and Bentley says its profit margin also dropped to 20.1 percent from 20.9 percent in 2022 because of new vehicle investments.
2nd Gear: Fisker Is In Big Trouble
Fisker is pausing Ocean production for at least the next month and a half as the nascent electric vehicle maker attempts to rein in inventory and avoid possibly having to file for bankruptcy.
It’s been a rough few months for Fisker, and the company apparently did not make a required $8.4 million interest payment last week on its unsecured convertible notes due in 2026. The automaker warned it may not be able to meet obligations to service its debt and could end up needing to “seek protection under applicable bankruptcy laws.” From Bloomberg:
Fisker shares fell as much as 14% shortly after the start of regular trading. The stock had plummeted 90% this year through last week’s close.
Fisker also said Monday that it plans to raise as much as $150 million through a financing deal with the holder of its 2025-dated convertible notes. The Los Angeles-based EV maker didn’t identify the existing investor and said the funding will be organized in four tranches and subject to certain conditions.
The disclosures expound on the dire state of Fisker, which warned late last month that there was substantial doubt about its ability to stay in business. The company has said it will cut 15% of its workforce after struggling with production issues, software glitches and short-seller criticism.
Fisker said it remains in negotiations with an unidentified large automaker about a potential investment and joint development partnership. Bloomberg reported earlier this month that the company was in talks with Japan’s Nissan Motor Co., citing people familiar with the matter.
Fisker said it has about 4,700 vehicles in its inventory right now, and altogether that’s worth about $200 million. It has hit the pause button on production in Graz, Austria in an attempt to sell down a chunk of that already-built supply.
3rd Gear: Unionizing VW Plant Takes A Huge Step
Workers at Volkswagen’s assembly plant in Chattanooga, Tennessee are seeking an election to join the United Auto Workers union. It’s the first big test of UAW President Shawn Fain’s push to expand the union’s reach to foreign-owned automakers in the southern U.S. From Reuters:
