In the midst of a major new product roll-out, Bentley is about to undergo a major shake-up in its management team, as well.
Long-time CEO Franz-Josef Paefgen will retire, with Wolfgang Durheimer slotted in as his replacement next February.
The executive shift comes as Bentley is in the midst of re-doing its entire line-up. The British marque’s aging flagship sedan, the Arnage, was recently replaced by an all-new model, the $285,000 Mulsanne. Next up is an all-new version of the Continental line-up, Bentley’s volume mainstay. The sporty Continental GT replacement made its debut, last month, at the Paris Motor Show.
The original Continental was a transformative model for Bentley, which was purchased by Volkswagen AG a little more than a decade ago. Launched during Paefgen’s 8-year tenure as CEO, it generated sales numbers never before seen in the ultra-premium luxury market. Immediately prior to the 2008 global economic meltdown, Bentley sales soared to more than 10,000 a year, with the various Continental spin-offs, including the GT coupe, Flying Spur sedan and GTC convertible accounting for 90% of that volume.
Since the economic crisis, however, Bentley sales have fallen by roughly half. The ultra-premium market, in particular, has been hard hit – not because buyers don’t have the money, Paefgen has suggested, but because “It is hard to be seen driving up to your factory in a new Bentley when you are laying off workers.”
New competition has also been a challenge. Long-time ally and now key competitor Rolls-Royce got off to a slow start when it was sold to BMW. But it has been gaining momentum, over the last several years, with the launch of new models, notably the all-new Rolls-Royce Ghost, a downsized sedan that is comparably sized to the Bentley Continental Flying Spur – but which carries a price tag closer to the new Bentley Mulsanne.
Paefgen’s departure comes as little surprise to those who follow Bentley. If anything, he stayed longer than some had expected hoping to see the new Mulsanne and second-generation Continental into production. But he has now reached Volkswagen’s mandatory retirement age.
Until a few months ago, his likely successor appeared to be the British Stuart McCullough, a former Toyota executive and Bentley’s second-in-command. But McCullough departed unexpectedly, several months ago. And the luxury maker has instead turned to 52-year-old Durheimer, who began his career with BMW, where he went on to head product development for the Bavarians’ motorcycle operations.
Durheimer migrated to Porsche, in 1999, where he was put in charge of development for the iconic 911. Two years later, he was named board member in charge of research and product development – giving him the opportunity to leave his imprint on any number of recent Porsche models, from the Cayman to the Panamera.
Volkswagen is in the midst of digesting a costly takeover of the smaller German company – a move that followed the unlikely –and ultimately failed — attempt by Porsche to acquire VW. The decision to move Durheimer reflects the serious concerns about Bentley’s recent stumbles, insiders suggest.
“During my time here we have had some tremendous successes and inevitably faced some real challenges,” said Dr. Paefgen, in a prepared released. “In Wolfgang Dürheimer I am convinced we have an individual with a feel for both the Brand and what makes Bentleys special. The company is in very capable hands.”
Paefgen has agreed to remain an advisor to both Bentley and the Volkswagen Group.