July 23 (Bloomberg) -- Volkswagen AG gave its ultra-luxury Bentley brand approval to build a sport-utility vehicle, which may cost about 180,000 euros ($237,000), to expand beyond exclusive sedans and coupes.
The new model for the British marque will go on sale in 2016, creating more than 1,000 jobs in the U.K., the VW unit said today in a statement. Bentley plans to spend more than 800 million pounds ($1.23 billion) on developing the SUV and other models, as well as upgrading its headquarters in Crewe, England.
Bentley said the vehicle will be the most luxurious and powerful SUV on the market when it goes on sale three years from now. The price range of the vehicle, which stems from past comments from company executives, would make it the world’s most expensive SUV.
“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 model 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 VW’s Porsche nameplate, which flanked its sports cars with the Cayenne SUV, now the brand’s best-seller. Porsche plans to add a compact SUV, called the Macan, by next year.
“Bentley fans all around the world are looking forward to the brand’s first SUV,” VW Chief Executive Officer Martin Winterkorn said in the statement. “Together we will make this new Bentley another true Bentley –- powerful, exclusive and successful.”
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 since then, according to two people familiar with the matter who asked not to be identified because details have not yet been released.
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 be made in Crewe, Bentley said today. The vehicle is due to share underpinnings with the Audi Q7, according to past company comments.
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 percent from 2011. Operating profit jumped to 100 million euros in 2012 from 8 million a year earlier.
The new Bentley will compete with vehicles like the 151,700-euro Porsche Cayenne Turbo S, the 131,300-euro 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 euros.
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.”
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