March 8 (Bloomberg) -- Ferrari, Bentley, Jaguar, and Rolls- Royce are roaring back with new leather-swathed models after a drop last year in European sales of ultra-luxury cars.
At the Geneva Motor Show this week, Ferrari showed a 1 million-euro ($1.3 million) hybrid called LaFerrari. Bentley exhibited a revamped four-door Continental Flying Spur. Jaguar debuted the XFR-S, its fastest sedan ever. Rolls-Royce is adding a 245,000-euro coupe called the Wraith to its lineup.
The highest end of the market -- vehicles costing more than 100,000 euros -- will grow 9.9 percent this year to 446,550 cars, according to researcher IHS. Even in Europe, where mass market auto sales are headed toward a sixth annual decline, IHS predicts deliveries of ultra-luxury vehicles will climb 8.5 percent. That has automakers introducing new models to keep customers coming back -- or win buyers from rivals.
“The ultra-luxury carmakers are trying to trump each other with new technological finesse,” said Stefan Bratzel, Director of the Center of Automotive Research at the University of Applied Sciences in Bergisch Gladbach, Germany. “They’re testing the limits on how far they can go.”
Even with customers who have ample cushion from a recession, the luxury automakers haven’t been entirely insulated from the downturn. The economy of the 17 nations using the euro shrank the most in four years in the final quarter of 2012, according to European Union figures. Ultra-luxury sales last year fell 3.5 percent to 91,672 vehicles in Europe, bringing the gain globally down to 6 percent from a 15 percent rise in 2011.
“Rolls-Royce is not immune to economy swings, absolutely not,” Torsten Mueller-Oetvoes, head of the automaker owned by Bayerische Motoren Werke AG, said in an interview at the Geneva show. “When markets collapse, we also feel it.”
Nonetheless, Mueller-Oetvoes says he has high hopes for the Wraith, scheduled to reach showrooms at the end of October. The two-door coupe features a transmission that’s linked to the car’s satellite navigation system to prepare for climbs, descents, and turns ahead. The wood-and-leather interior can be topped off with more than 1,000 fiber optic lights woven into the roof to give the impression of a glittering night sky.
“The Wraith addresses younger and sportier customers who like the brand but might have felt too young for a Rolls- Royce,” Mueller-Oetvoes said.
Ferrari says it has more than 700 formal requests for the 963-horsepower LaFerrari, though the company plans to make only 499 of them -- each numbered and fit with a driver’s seat molded to its owner’s body. Using technology developed for Formula One racing, the car will combine two electric motors with a 12- cylinder gasoline engine to produce more horsepower than any previous Ferrari -- while cutting fuel consumption by as much as 40 percent.
With deliveries of the car scheduled to be completed next year, the company is evaluating the requests. It plans to give preference to what it calls “Ferraristi” -- drivers who already own at least two Ferraris.
“After several depressing years, wealthy drivers in Europe think the worst is behind us, and they’ll start spending again on their favorite cars,” said Fabio Barone, the owner of two Ferraris and chairman of Passione Rossa, an owners’ club.
The car fits into Ferrari’s strategy of boosting profitability with ever-more-luxurious offerings while limiting its annual output to about 7,000 cars to maintain exclusivity.
Ferrari, the most profitable unit of Fiat SpA, reports strong demand even in its home market of Italy, which has seen a sell-off of high-end cars as tax authorities have started scrutinizing their owners’ finances. The company says it has had more than 40 inquiries for the LaFerrari in the country, where it plans to sell only 25 of the model.
“Thank God there’s no crisis for Ferrari,” Chairman Luca Cordero di Montezemolo said at the Geneva show.
Bentley, the ultra-luxury unit of Volkswagen AG, has developed the second generation of its Continental Flying Spur, a 17-foot-4-inch land yacht with an eight-speed transmission. The company expects the $200,000 car to help it consolidate its lead over Rolls-Royce in the ultra-premium category. Bentley’s sales last year jumped 22 percent to 8,510 cars, versus a 1 percent increase, to 3,575 cars, for Rolls.
Bentley chief Wolfgang Schreiber said he expects China to account for almost two-thirds of sales of the revamped Spur. Expansion beyond Europe could help the brand sell more than 3,000 Spurs a year, beating the sales rate of the previous generation, Schreiber said.
Jaguar Land Rover is making a push into new markets and plans to introduce eight new or refreshed models this year. Those plans make the company “cautiously optimistic” that it can increase sales in 2013, said Ralf Speth, head of the company, a unit of India’s Tata Motors Ltd.
In Geneva, Jaguar presented the Jaguar XFR-S, a 550- horsepower version of the XF sedan. The XFR-S, priced at 79,995 pounds ($120,800) has a top speed of 300 kilometers (185 miles) per hour and can reach 100 kpm in 4.6 seconds. Jaguar says the car is its most-powerful sedan ever.
Jaguar Land Rover plans to expand its dealer network in Europe as it expects “further growth” in the region in countries such as Switzerland, sales chief Phil Popham said this week in Geneva.
“The main headwind for ultraluxury car sales is the sentiment, not the economic environment,” said Christoph Stuermer, an analyst with IHS in Frankfurt. “The high-end models are already sold out.”
--With assistance from Chris Reiter and Christoph Rauwald in Geneva. Editors: Tom Lavell, David Rocks.