Bentley to Pass on Costs of US Tariffs to Buyers Amidst Decline in Chinese Demand

Bentley, the prestigious British luxury carmaker owned by Germany’s Volkswagen, has announced plans to pass on the costs of potential US tariffs to its customers. This development comes as the company faces growing financial challenges, including a drop in profits due to weakening demand from China.

The warning follows comments from the US President, who suggested that tariffs of up to 25% on imported vehicles could motivate manufacturers to transfer production operations to the United States. For brands like Bentley, whose reputation is deeply tied to its Crewe factory in Cheshire, such a transition remains unlikely. Instead, the company will likely rely on price adjustments to accommodate the impact of the tariffs without compromising its brand identity.

Bentley’s chief executive, Frank-Steffen Walliser, highlighted the precarious situation during a press briefing, stating, “We are assessing different scenarios on how to handle it, but it would eventually be passed on to consumers.” Volatility in global markets continues to be an obstacle for the company, with Walliser describing the political and economic landscape as “very volatile.”

The company reported a €373m operating profit in 2024, marking its fourth-highest annual earnings in the firm’s 105-year history. However, this figure represents a sharp decline from the €589m profit recorded the year prior. Revenue stood at €2.6bn in 2024, although Bentley has withheld information about the number of vehicle sales for the year. In 2023, Bentley delivered 13,560 cars to its customers.

Weaker demand in China—a critical market for luxury goods—played a substantial role in the earnings dip. Consumption in the world’s second-largest economy has slowed, directly impacting sales across the luxury automotive segment. Bentley’s financial chief, Jan-Henrik Lafrentz, expressed optimism about the market’s future, stating, “We hope Chinese demand will level out this year.” A recovery in China would support Bentley’s ongoing transition to electric vehicles and hybrid technology.

The manufacturer’s roadmap for electrification has faced delays, with a planned electric sports utility vehicle rescheduled for a 2026 debut and first deliveries anticipated in 2027. Additionally, the company has pushed its target for phasing out petrol-powered cars from 2030 to 2035, acknowledging that initial projections for electric car demand may have been overly ambitious.

Bespoke features remain a cornerstone of Bentley’s business model, with approximately 70% of customers opting for personalised enhancements. One notable client in 2024 requested 3D-printed rose gold interior details, underscoring Bentley’s focus on “value over volume” as it aims to extract greater revenue from each unit sold. Despite the challenges, Bentley remains confident that its shift to innovative hybrid and electric models will be as profitable as its traditional offerings, according to Lafrentz.

The shifting regulatory landscape, coupled with changing consumer trends, will require Bentley to deftly navigate the complexities of the global luxury car market. While its reputation for craftsmanship and exclusivity provides a strong foundation, geopolitical and economic headwinds will remain key testing grounds for the iconic brand in the years to come.