A Smooth Ride

The rapper Xzibit made his name customizing cars. But when it came time for the host of MTV's "Pimp My Ride" to purchase his most expensive car ever, he didn't change a thing. His $200,000 gray green Bentley Continental GT came fully loaded straight from the factory with hand-stitched baseball-glove leather seats and a massive 12-cylinder engine. "There was no pimping required," says Xzibit. What was required, though, was some restraint on the road home to L.A. from San Francisco, where he bought his Bentley a few months ago. But Xzibit couldn't resist putting that 552-horsepower engine to the test. Before he knew it, he was doing 120mph and a police car was coming up in his rearview mirror. Fortunately for Xzibit, the cop was a car enthusiast. "I've never seen one of these on the road before," the cop gushed, says Xzibit, who adds: "He only wrote me up for going 80, which was a lifesaver."

Bentley has gone through its own lifesaving experience in the past eight years. A threadbare relic from the days when Britannia ruled the automotive high road, Bentley was reborn when it was acquired by Volkswagen in 1998. Yes, VW, the Beetle car company. What would the oh-so-pedestrian "people's car" maker know about august Anglo automobiles? Plenty, it turns out. VW injected nearly $2 billion into Bentley, overhauling its Crewe, England, factory and developing the new Continental car line that it cleverly priced at the low end of the über-luxury-car market--between $150,000 and $200,000. To mere mortals, that might seem like an outrageous sum for a car. But to the world's growing group of millionaires, it sounded like a bargain. And now the "budget" Bentley has become the car of the stars. Paris Hilton famously soaped up a black Bentley in a Carl's Jr. burger commercial and then went on to lose her own white GT in a poker game. Michael Jordan is said to have used his GT as the inspiration for his latest Nike shoe design. "There's so many Bentleys in the Hamptons," says Fabrizio Sotti, J.Lo's producer. (They each have one.) "It's like taxis in New York City."

But it isn't just Bentley buzz that's at a record high. So, too, are Bentley's global sales, which are on pace to top 9,000 cars this year, a ninefold increase since the GT first hit the road in 2003. Last year Bentley scored another sales success with the slightly stretched four-door Continental Flying Spur, the family car of the line, which starts at $165,000 and has a top speed of 195mph. And this month Bentley launches a $190,000 convertible, the Continental GTC (page E22). It's already sold-out through next spring. The bottom line: VW's Bentley bet is paying off big. Though VW won't break out exact figures, Bentley chairman Franz-Josef Paefgen says the luxury-car maker drove into the black last year, earning profits in the tens of millions of dollars. This year Bentley says it will generate revenue of about $1.3 billion. Analysts figure Bentley earns profit margins near 10 percent--twice the industry average. So profits this year could top $100 million. "Bentley," says auto analyst John Lawson of Citigroup Smith Barney in London, "has been a hands-down success."

Bentley's success in the stratosphere could provide a road map for everyday automakers. The key, say Bentley execs, is getting out of your comfort zone. Instead of simply selling a few hundred cars a year to sultans and crown princes, Bentley lowered its sights and expanded its horizons. With its Continental line it targeted an empty niche just above the high-end Benzes and Bimmers and well below the $250,000-to-$350,000 price of its old Arnage model and its more famous English cousin, Rolls-Royce. "We saw that you could move Bentley down slightly and still keep it away from what we call the cheaper luxury cars," says Paefgen.

While avoiding the riffraff, Paefgen found the demographics were still very attractive lower down. Rolls appeals to the superrich, those with a net worth north of $30 million. But Bentley was going after folks worth a mere $3 million-plus. There are just 80,000 potential customers in Rolls's rarefied neighborhood worldwide. Bentley, by contrast, was jumping into a pool of 1.5 million possible buyers. Still, plenty of luxury-car makers have failed at moving downmarket. Jaguar's $30,000 X-type model never achieved its sales goals and analysts believe it tarnished that elite English car line, which hasn't earned a penny for its parent, Ford Motor Co. "The risk VW took was huge," says German auto analyst Philipp Rosengarten of Global Insight. "They were going after a wide spot on the map and sometimes these wide spots turn out to be black holes."

But the high-octane mix of sexy styling, outrageous power and relatively affordable price lured loads of buyers out of their "cheaper" luxury cars. "I was driving a $120,000 BMW Z8, so the Bentley wasn't that big a step up in price," says L.A. lawyer Bill Price, who recently replaced his $160,000 GT with a $170,000 Flying Spur. "The car looks incredible, but you have to be very careful driving it because it's wicked fast." Now other automakers are going to school on Bentley. "They found the sweet spot," says General Motors car czar Bob Lutz.

There sure weren't many auto execs admiring Bentley when VW first came calling nearly 10 years ago. Back then, with the '90s tech bubble producing a bumper crop of billionaires, big automakers were on the prowl for exclusive luxury-car brands. When the British military contractor Vickers PLC put Rolls-Royce and Bentley up for sale in 1997, it seemed obvious that Rolls was the real prize. BMW had the inside track, since it already supplied engines to Rolls and Bentley. And indeed, Vickers initially agreed to sell to BMW. But VW rolled up big with an eleventh-hour offer of about $800 million, which bested BMW's bid by nearly $170 million. It appeared that VW had won. But in a bizarre twist, it turned out that Vickers didn't actually control the Rolls-Royce brand name. That belonged to Rolls-Royce PLC, a British jet-engine maker that also did business with BMW. That allowed BMW to swoop in and acquire rights to the Rolls-Royce brand name, leaving VW with just Bentley and the aged Crewe factory.

The CW in the car business then was that VW's charismatic chairman, Ferdinand Piech, had been taken for a ride. But Piech insisted he was always after Bentley, where he saw more upside potential. And given how things have turned out, it's now hard to argue with him. BMW's $330,000 Rolls-Royce Phantom isn't meeting its sales target, and the $335,000 Maybach limo, developed by Mercedes to compete with Rolls and Bentley, has been an outright flop. It turns out that Piech wasn't clueless about Rolls's unusual ownership situation. For months before buying Bentley, he met secretly with Bernd Pischetsrieder, then BMW's chairman, to divide the spoils of Britain's automotive crown jewels. The deal they hatched allowed VW to control both brands until 2003, when BMW launched its big new Roller. "I don't think Piech was hoodwinked," says Richard Feast, author of "Kidnap of the Flying Lady."

In an ironic postscript, BMW ultimately dumped Pischetsrieder. He was blamed for the failure of another acquisition of a British car line, Rover, which was hemorrhaging so much money it became known as the English Patient. Pischetsrieder, though, eventually emerged as chief of VW, where he now oversees Bentley and competes with the Rolls-Royce line he so cunningly acquired for BMW. "It's like a Jackie Collins novel," marvels Motor Trend editor Angus MacKenzie.

After VW arrived, it quickly went to work getting Bentley's groove back. Bentley had long languished in Rolls's silver shadow and reached its nadir in the United States in 1980 when it sold exactly zero cars. "Bentley didn't mean anything to my bottom line back then," says Bentley of Beverly Hills dealer Tom O'Gara, who also sells Rolls-Royce and Lamborghini. "I just sold a few to my buddies. It was like having a pet." In the mid-'90s, Vickers halfheartedly engineered a new model, but couldn't afford a new engine. So it bought an underpowered V-8 from BMW that one Bentley owner complained "couldn't pull the skin off a roast pudding." In his first meeting with engineers, Piech greenlighted a project to rip the Beemer engine out and replace it with an updated version of Bentley's classic big V-8. "He just wrote a $73 million check on the spot," recalls a still-stunned Bentley executive.

Then it was off to the races. Bentley began life in the 1920s by winning the famed 24-hour Le Mans endurance race five times, piloted by wealthy and reckless racers who became known as the Bentley Boys. (Bentley's rakish reputation explains why author Ian Fleming originally put James Bond in a Bentley, not the Aston Martin that Sean Connery later made famous.) VW revived the racing tradition by bringing Bentley back to Le Mans in 2001. Two years later Bentley scored its first Le Mans victory in 73 years, copiloted by the new Bentley Boys, Guy Smith, Tom Kristensen and Rinaldo (Dindo) Capello. "That created a lot of buzz," says Andrew Stuart, CEO of Bentley's U.S. operations, which account for 45 percent of global sales.

Meanwhile, a plan to develop a "midsized Bentley" that had stalled on the drawing board under Vickers was suddenly put on the fast track. The goal was simple: create the world's fastest four-seat sports car--a title Bentley held a half century ago. It also had to have Bentley's bespoke tailoring with yards of buttery leather and burled oak from a single tree that is mirror-matched on each side of the dashboard. VW had a way to make this haute supercar economically: it would engineer it on the same chassis as the Audi A8 and VW Phaeton and equip it with their W-12 engine, augmented with a twin-turbo boost. And for the first time in decades, this Bentley would look nothing like a Rolls. Instead, VW crafted a modern interpretation of the 1952 R-type Continental, a classically sleek Bentley that was just named one of the top-25 automotive designs ever by Automobile magazine.

The Continental GT roared out of the gates, selling nearly 6,000 copies in 2004, its first full year--well beyond Bentley's wildest expectations. It was in such high demand, dealers were commanding $50,000 above sticker. And it quickly found its way into rap videos. "In youth culture, the Bentley is the modern-day icon," says Myles Kovacs, editor of DUB, a hip-hop car magazine that has featured a Bentley on its cover 11 times in the past three years. Bentley also helped drive sales of lots of Chrysler 300s, which borrows heavily on the GT's massive mesh grille. Sometimes, even rich men are accused of driving the poor man's Bentley. "I actually got a ticket and they wrote 'Chrysler' on it," says L.A. record producer Ken Tanner, whose GT received the citation while parked in front of his manse. "You'd think the cops in Beverly Hills would know a Bentley."

The Continental boom has overwhelmed Bentley's British factory. To make room for the new convertible, VW began building Flying Spurs last year in Dresden, Germany. That has been a controversial move among Bentley traditionalists, who already fret that the new models are really just VWs under the skin. "A German-built Bentley in the U.K. is considered a brand crime," says Lawson in London. "They don't sell those here." VW promises to halt German Bentley production by the year-end.

The overhaul VW has given the nearly 70-year-old Crewe factory is deceptive at first. As you walk up on the red brick buildings with spiky roofs, you expect to be greeted by Willy Wonka. Once inside, though, it's like you've entered Futureworld. Multicolored Bentleys move languidly along a brightly lit assembly line, as white-gloved inspectors run their hands along the car's graceful curves. Fred Bennett, who followed his father into the factory 30 years ago, spots a slight imperfection in a Neptune blue GT. "See that little high spot, right there in the panel behind the fender?" he says to a visitor who can't make out the mistake. Nearby, 45 women sit at sewing machines, stitching leather seat covers in a scene straight out of the Industrial Revolution. But beside them, the cowhides are being cut by a computer-guided laser that maps out the most efficient jigsaw pattern of seat shapes. Throughout the factory, Bentley's Old World craftsmanship blends with VW's New Age technology. "They've given us new tools to go about our business," says woodworker Dave Maddock, near an automated router that slices holes precisely in the dash for gauges. "In the old days, this shop would have been full of sawdust."

The days of Bentley's owning the "budget supercar" category also are going fast. A parade of new models are speeding into the $150,000-to-$200,000 price range, where sales have increased nearly sixfold since the GT arrived in 2003. Already, Bentley faces competition from new Mercedeses and Astons. And coming in 2009, the four-door Porsche Panamera will take on the Flying Spur. To defend its turf, analysts say, Bentley will have to refresh its lineup more frequently than the glacial 18-year life cycle its models used to be on. Bentley execs promise new designs will arrive by the end of the decade.

Actor James Caan is plenty satisfied with what Bentley offers now. He's had a chance to drive $300,000 supercars on his TV show, "Las Vegas." But he says nothing compares with his black Bentley GT. "These cars that are three-something are just pompous pieces of crap," growls Caan. "Anybody who'd pay 300 grand for a car should be shot in the head." With Sonny Corleone riding shotgun for Bentley, can anything really get in its way?