FRANKFURT – Bentley Motors Ltd. will use parent Volkswagen AG's vehicle assembly plant in Dresden, Germany, to build the Continental GT Flying Spur during the fourth quarter to help launch the 4-door sedan.

The production is temporary and should generate up to 400 additional units for Germany, Austria, Switzerland and Holland, says Adrian Michael Hallmark, head of worldwide marketing and sales for Bentley.

“It's purely to get through the launch phase of the Flying Spur,” he says.

Hallmark will not oversee the launch, as he takes over as executive vice president of Volkswagen of America Inc. on Oct. 1, replacing Len Hunt, who assumes Hallmark's duties at Bentley. (See related story: VW, Bentley Executives Switch Duties)

The two men met here Sunday, on the eve of the auto show, for the first time since last week's announcement of the appointments. They conducted the first portion of a mutual debrief in an exclusive interview with Ward's.

Bentley Continental Flying Spur

Bentley faces the enviable challenge of trying to meet unexpectedly high and sustained demand for its Continental GT, built at its Crewe, U.K., plant.

The luxury brand quickly escalated to 6,500 sales last year, and will sell about 8,000 units this year, Hallmark says.

The Crewe plant is at capacity now, he says, with the Spur still to ramp up – deliveries begin this month.

The long-term plan called for the addition of the Flying Spur in 2005, figuring GT demand would have tapered off and the sedan would freshen the lineup and keep the two shifts at Crewe busy.

“We thought GT demand would drop after two years, but it didn't,” Hallmark says.

There currently is a 6-month to 1-year waiting list for the car in some regions around the world.

The sourcing decision came down to four choices, Hallmark explains to Hunt:

  • Delay the launch of the Flying Spur to allow Crewe to build more GTs to meet outstanding orders.

  • Add Flying Spur production at Crewe as planned, lengthening delays for waiting GT customers.

  • Add a third shift at Crewe, knowing demand must, at some point, level off, making layoffs necessary.

  • Take advantage of the underutilized facility in Dresden that does final assembly of the VW Phaeton sedan. The Phaeton and Continental GT and Flying Spur share much of the same running gear and components.

The decision was made to launch the $164,990 Flying Spur on schedule but accelerate the build to bulk up supply quickly.

The production mix in Crewe will shift to 95% Flying Spur and 5% GT for four or five months. It will be augmented by temporary assembly at Dresden, filling about 10% of the 4,000 orders worldwide, Hallmark says.

It is not an ideal solution, as Dresden does not have a body or paint shop. It only finishes painted bodies for the Phaeton.

For the Flying Spur, subassembly work still must be performed in Crewe, requiring the relocation of some Bentley workers to this area. The roughly 15 subassemblies that comprise each sedan will be shipped to Dresden for completion.

Only 65 of the 175 hours needed to assemble the Flying Spur sedan will take place in Dresden.

A team of 60 employees, 30 from Crewe and 30 from Dresden, spent the summer preparing: working with suppliers, training workers, organizing logistics and actually building and then tearing down five vehicles, Hallmark says.

Bentley will start sending the subassemblies at the end of the month, he says.

The plan is to end Bentley assembly in Dresden by the end of the year, Hallmark says, but the situation will be assessed in the event a couple hundred more units are deemed necessary.

He says it is anybody's guess what the mix will be at Crewe next year.

“Within three months we could go 100% GT or Spur,” he says, grateful for the flexibility to react to demand.

The overall plan is to keep total Bentley sales (Continental GT, Flying Spur, Arnage and the pending Azure convertible, unveiled here) to 9,000 units annually, Hallmark says.

The brand broke even last year at 6,572 units. At 9,000, it is more than profitable, while maintaining the exclusivity necessary to convince customers to pay as much as $330,000 for an Azure.

“For the next five to 10 years, there is no plan to go above 9,000 (units),” Hallmark says. “The plan is for better revenue per car, at 9,000,” he says, by continuing to improve the product, including new powertrains, and adding to a lineup that now offers its largest range ever.

At some point, the cost of infrastructure to increase volume does not pay off, he says, noting low-volume production entails lower-cost technology and tooling, but greater manual labor than high-volume manufacturing.

Meanwhile, demand is high for the pending Azure, the ragtop version of the Arnage that will become the new flagship when the 2-door, 4-seat convertible goes on sale in the spring. The previous Azure ceased production in 2002.

At this point, the number of orders is the equivalent of two years' production. But, not all deposits translate into sales in the end, as there is some “launch effect,” Hallmark says, referring to those who enjoy the prestige of being on a list for a hot product.

If all deposits do, in fact, turn into sales, “we've completely underestimated.”

The forecast is to sell 450 of the $330,000 convertibles over the initial lifecycle, which is expected to be 4.5 to 5.5 years. About 40% of production is earmarked for the U.S., according to Bentley Chairman Franz-Josef Paefgen.

Hunt says he is eager to take on the challenge of managing Bentley sales and work to establish the brand around the world, pursuing opportunities in markets such as Russia.

He plans to tour the Crewe plant Tuesday, his first time inside since 15 years ago when it was a Jaguar plant and he worked for Jaguar Cars in the U.K.

“It should be really emotional,” he says.

Hunt says he knows many of the key dealers from his Jaguar days, many of which have dual franchises with Bentley. And, during his time with Audi AG in the U.K., Hunt developed a relationship with Paefgen.

“I feel really comfortable,” Hunt says of his new duties.

He says he also looks forward to returning to his native home and spending more time with family there.

apriddle@primediabusiness.com