Bentley CEO Franz-Josef Paefgen helps introduce the new Continental Supersports, the automaker's most powerful model ever, at the Geneva Motor Show, earlier this month.
He carries himself with a quiet regalness that almost doesn’t belong in the eat-or-be-eaten automotive world. But don’t let that fool you. Franz-Josef Paefgen is one tough businessman. And under his guidance, the British maker Bentley, the top-line subsidiary of Germany’s Volkswagen AG, has been radically transformed from an industry also-ran to the world’s best-selling ultra-luxury marque.
But times have changed fast, in the current economy. Bentley’s global sales fell 24% last year, and the market continues to weaken — something unusual, as luxury products traditionally hold up better than more mainstream vehicles. To find out what’s happening with Bentley, as well as the even more exclusive Bugatti brand — which Paefgen also heads — TheDetroitBureau.com caught up with the German executive after the press days were over at the Geneva Motor Show.
TDB: How bad is the current automotive downturn?
Paefgen: I think it’s the headline for the car business is, “a lack of confidence.” Everybody is totally confused about what’s going to happen. If you are not sure what is happening with your income, your pension, your assets, you’re not thinking about spending money.
TDB: There seem to be all sorts of reasons why luxury sales are so badly off: some because potential buyers are watching their stocks and bonds collapse, some because their home values are off and they can’t access equity lines, still others because they don’t want to be seen spending on a Bentley when their company is laying off.
Paefgen: It’s like a tsunami. Left and right, you see people being swamped, so the last thing you do is stop to buy an ice cream. You start running as fast as you can to find a high and dry point to wait until the situation is over. As soon as we see the banks send a more positive message, I think we will see things change, but right now, when you open the paper, every morning, and you see the headlines, you wonder, “where is my money.” This is not the right mood to be saying, “What a nice Bentley.”