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Image: Continental GT
Stuart Hamilton  /  Bentley
The completely-updated Continental GT will soon start rolling into showrooms around the world.
Image: Paul A. Eisenstein, msnbc.com contributor
By
msnbc.com contributor
updated 1/26/2011 7:42:15 AM ET 2011-01-26T12:42:15

The new year is already off to a big start for Bentley, the largest of the ultra-premium luxury automakers. With a new boss, two new products — and a third under review — this could be the most significant year for the British carmaker since it first burnished its reputation on the track at Le Mans in 1923.

After taking a severe tumble in sales over the last several years, Bentley is rebuilding, but key decisions will be handed off to the new chief executive when he gets behind the wheel of the Volkswagen AG subsidiary next week.

“Everything is prepped for the next push,” insists outgoing Bentley CEO Franz-Josef Paefgen, who spent the last nine years transforming the British-based brand from an almost forgotten niche car manufacturer into the most successful producer of ultra-premium cars the industry has ever seen.

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Paefgen’s successor, former Porsche Board Member Wolfgang Durheimer, will still face some significant challenges. After hitting an all-time peak of 10,014 in 2007, Bentley’s global car sales plunged to 4,616 just two years later, reflecting the impact of the  economic meltdown on even the world’s wealthiest motorists.

The collapse of the global stock markets in 2008 certainly put a crimp in spending for some potential customers, while others became reluctant to flash the wealth they still had, said Paefgen, adding that “you don’t want to be driving up to a plant you’re about to close in a brand-new Bentley.”

But with the economy on the mend, momentum is building again in most luxury sectors, and Bentley will be particularly well-positioned to take advantage of the current year-end bonus season on Wall Street, automotive analysts believe. The automaker has a pair of critical new products in its portfolio, including the completely-updated Continental GT — a $189,000 sports coupe that made its American debut at the Detroit auto show in early January and will soon start rolling into showrooms around the world.

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December, meanwhile, brought the official launch of sales for the all-new Bentley Mulsanne, the carmaker’s flagship vehicle. Lavished in handcrafted wood and leather, the Mulsanne is designed to go up against the most expensive “saloon cars,” as the British call them, in the world, including the Rolls-Royce Phantom.

It’s a somewhat internecine competition, considering Bentley and Rolls were long siblings.

Founded by the eponymous W.O. Bentley, the British carmaker earned its stripes with a string of victories during the legendary 24-hour race at France’s Le Mans racing track 90 years ago, but the heavy-drinking executive was unable to turn a profit and Bentley was eventually sold to Rolls.

It remained a luxury after-thought until the early 1990s, when the Bentley brand was redefined as a sportier alternative to Rolls-Royce, a strategy that carried over when the two brands were split up a decade ago. Following a bitter feud, Rolls landed in the hands of BMW, with Bentley becoming one of a string of ultra-luxury nameplates — including Bugatti and Lamborghini — that VW acquired in 1998.

One of Paefgen’s key decisions was to put off updating the Bentley brand’s old flagship, the Arnage, focusing instead on the development of the less expensive Continental line — which along with the GT coupe now includes the GTC convertible, the Flying Spur sedan and a variety of high-performance spin-offs. At their peak, the various Continental-based models accounted for more than 80 percent of Bentley’s sales volume.

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But while the top end of the luxury car market appears to be bouncing back, it’s also undergoing a massive change.

The new Mulsanne is targeting Rolls, and the former sibling is pushing down into Bentley territory with its all-new Ghost. Meanwhile, German brands Mercedes-Benz, BMW and Audi are all nudging upward into ever more exclusive territory with a variety of new models.

So, while CEO Paefgen insists Bentley is “strong enough to grow further,” he also acknowledges that the challenge for his successor will be “to decide on a third product line.”

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While he and other Bentley officials decline to reveal any details, it appears the carmaker has been quietly working up plans for a model that would slot in below the Continental line, probably in the $150,000 range. It would still emphasize craftsmanship and exclusivity, and it would target somewhat more mainstream luxury customers who’d like a bit more exclusivity than they get with relative mass-market names like Mercedes.

Broadening out the line-up is only one of the issues facing Bentley and its new boss,  52-year-old Durheimer, who had most previously served as the board member in charge of research and development operations for Volkswagen.

Durheimer’s recent experience could come in handy considering that one of his toughest challenges will be to keep Bentley in compliance with strict new rules in the U.S., in Europe and elsewhere that will push for improved fuel economy and lower emissions.

“If the law doesn’t allow certain technologies, we will find others,” Paefgen said when asked whether Bentley can survive with a 62 mpg Corporate Average Fuel Economy standard in the U.S.

The carmaker, he added, is already planning to deliver “significant” improvements in mileage and is migrating to flex-fuel powertrain technology. But Durheimer will also have the decide whether a battery-powered or hybrid-powered Bentley is on the cards.

Paefgen’s departure has long been rumored, and many observers expected him to leave Bentley in 2010. “Last year […] in the middle of a crisis […] was not the right time to leave,” he said, suggesting he wanted to wait until Bentley was “at least 90 percent back” before handing over the reins to Durheimer.

“It is only fair to hand over a company that is ascending,” Paefgen said.

Paefgen won’t disappear entirely. While he says he’s looking forward to focusing on the things he has long been unable to do (such as repairing his personal car collection, or hanging pictures at his daughter’s new home), Paefgen did agree to stay on as a Bentley consultant. For now, at least.

“Nothing is worse than being a consultant,” he quipped, “to people who don’t need one.”

© 2013 msnbc.com.  Reprints

Photos: Production models

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  1. Volvo’s C30 electric crash test display is shown during the media preview of the 2011 North American International Auto Show at the Cobo Arena in Detroit. Volvo is hoping to burnish its reputation for car safety at the event, which features over 30 debuts of vehicles made by automakers from around the world. The show is open to the public from January 15 to 23. (Paul Sancya / AP) Back to slideshow navigation
  2. A model poses in front of an Audi A7 during the media previewfor the show. (Mark Blinch / Reuters) Back to slideshow navigation
  3. The 2011 Jeep Compass is unveiled. Chrysler Jeep is celebrating its 70th year in 2011. (Mark Blinch / Reuters) Back to slideshow navigation
  4. A Chevrolet Corvette, right, and a 2011 Corvette ZR1 sit on display. (Kamil Krzaczynski / EPA) Back to slideshow navigation
  5. The 2011 Ford Explorer, winner of the 2011 North American Truck of the Year award, on display at the 2011 North American International Auto Show. (Rebecca Cook / Reuters) Back to slideshow navigation
  6. Volvo’s Electric C30 car is powered by a lithium-ion battery and can be charged from a household power socket. (Stan Honda / AFP - Getty Images) Back to slideshow navigation
  7. Venturi’s high-voltage buggy concept includes a 300-horsepower engine. (Paul Sancya / AP) Back to slideshow navigation
  8. The new Dodge Ram 3500 truck is equipped with a powerful 350-horsepower engine. (Stan Honda / AFP - Getty Images) Back to slideshow navigation
  9. The 2011 Camaro RS convertible. (Rebecca Cook / Reuters) Back to slideshow navigation
  10. A model poses next to a Dodge Charger Hemi. (Tannen Maury / EPA) Back to slideshow navigation
  11. The 2011 Dodge Challenger SRT8 392. (Rebecca Cook / Reuters) Back to slideshow navigation
  12. The new Chevrolet Sonic small car will go into production later this year for the 2012 model year. (Stan Honda / AFP - Getty Images) Back to slideshow navigation
  13. Porsche returns to the 2011 North American International Auto Show with the Cayman R sports car. (Paul Sancya / AP) Back to slideshow navigation
  14. The new Bentley Continental GT will launch from standstill to 60mph in just 4.6 seconds and has a top speed of 197 mph. (Stan Honda / AFP - Getty Images) Back to slideshow navigation
  15. Toyota Executive Bob Carter introduces the Prius V midsize hybrid-electric vehicle, left, and the Prius C concept, right. (Paul Sancya / AP) Back to slideshow navigation
  16. Ford's Mark Fields introduces the Ford C-MAX electric vehicle. (Tannen Maury / EPA) Back to slideshow navigation
  17. Dr. Martin Winterkorn, Chairman of Volkswagen Management Group, introduces the new Volkswagen Passat. (Bill Pugliano / Getty Images) Back to slideshow navigation
  18. The Porsche 918 RSR sports car Has a V8 engine that delivers 563 horsepower and can jump to 767 horsepower with the push of a button. (Friso Gentsch / EPA) Back to slideshow navigation
  19. Audi introduces the new A6 Hybrid. (Scott Olson / Getty Images) Back to slideshow navigation
  20. A model poses next to the Ferrari 458 Italia. (Kamil Krzaczynski / EPA) Back to slideshow navigation
  21. The BMW 650i convertible is unveiled. (Mark Blinch / Reuters) Back to slideshow navigation
  22. The Mercedes Benz SLS AMG E-Cell has four electric motors (one for each wheel) and can accelerate to 60 mph in 4 seconds. (Paul Sancya / AP) Back to slideshow navigation
  23. Ford’s President and CEO Alan Mulally presents the Ford Focus ST. (Tannen Maury / EPA) Back to slideshow navigation
  24. Ford’s Executive Chairman Bill Ford introduces Ford’s electric lineup: (Left to right) the C-MAX electric car, the Transit Connect electric truck, the Focus electric car and the C-MAX hybrid. (Stan Honda / AFP - Getty Images) Back to slideshow navigation
  25. The interior of the Buick Verano, GM’s first upscale compact car for a luxury brand, is shown. The Verano is GM’s only new model to debut at the event. (Geoff Robins / AFP - Getty Images) Back to slideshow navigation
  26. The Chrysler 300, once a hot-selling sedan, is redesigned with a sleeker look. (Tony Ding / AP) Back to slideshow navigation
  27. Tom Stephens, vice chairman of General Motors, holds up the 2011 North American International Auto Show Car of the Year trophy, which this year was awarded to the Chevrolet Volt. (Paul Sancya / AP) Back to slideshow navigation
  28. Two of the new Mercedes Benz C Class vehicles are shown at a Mercedes Benz event the night before the official start of the media preview event. (Bill Pugliano / Getty Images) Back to slideshow navigation
  29. Michael Price cleans a Cadillac CTS-V coupe race car on the show floor. (Rebecca Cook / Reuters) Back to slideshow navigation
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    Above: Slideshow (29) On the catwalk in Detroit - Production models
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