Bentley has booked five Antonov cargo jets to help overcome possible supply bottlenecks in the event of a disorderly exit of the United Kingdom from the European Union, the automaker said on Wednesday.
Bentley is a luxury automaker owned by Volkswagen.
Automakers are securing additional supply routes as policymakers in Brussels and Westminster look forward to striking a deal to determine the future trading relationship with continental Europe after the UK exits the European Union.
Bentley, which makes luxury sports cars, purchases 90% of its components from continental Europe, and sells about 24% of its cars into Europe, Chief Executive Adrian Hallmark informed the Financial Times’ Future of the Car summit.
“We have spent two years planning. We have five Antonovs that we have on reserve to fly bodies to Manchester,” said Hallmark, adding that together with shifting car bodies by air, Bentley has hiked the level of spare parts stored for production.
“We used to run just-in-time with two days stock. Now we have 14 days of stock. That’s 14 working days, so that’s three weeks of stock,” he said.
The automaker has booked extra warehouses and planned new logistics routes in case traditional supply methods are hindered by bottlenecks.
If the UK fails to secure a negotiated trade agreement with European policymakers, Bentley would be able to absorb 10% import tariffs by increasing prices and cutting costs. This would be less damaging compared to supply disruptions.
“It is not existential as long as everything flows. Stopping flows is far more dangerous than Brexit tariffs,” Hallmark said on supply bottlenecks.
This year Bentley expects to sell over 10,000 luxury cars and to reach breakeven, mainly because of a rebound in demand in China, Hallmark said.
China sales have increased by 35% when compared with before the coronavirus crisis. Sales in Europe and the United States boosted 15% Hallmark said.
“Overall we are in a position where we will do well over 10,000 sales this year,” he said. “We are on the cusp of going beyond breakeven.”
