BRITISH LUXURY CARS STORM GENEVA !

By Jorn Madslien Business reporter, BBC News, Geneva motor show

British luxury cars are taking centre stage at the Geneva motor show this week, with Rolls-Royce, Bentley and Aston Martin all defiantly revving their engines in the face of recession.

The 'baby Rolls' will cost more than 200,000 euros

The three British marques have all unveiled outstanding, powerful and glamorous new models at a time when many of its traditional buyers are pulling back from luxury.

But the carmakers are not deterred.

"We're not dealing with necessarily rational decisions," says Rolls-Royce chief Tom Purves in an interview with BBC News. "We're dealing with aspirational decisions, emotional decisions.

The long-awaited "Baby Rolls" - temporarily dubbed 200EX for effect - marks the arrival of a new family of smaller Rolls-Royce models; expect convertible and coupe derivatives in the years to come.

"We've always said that with 2,000 of those cars and 1,000 Phantoms we'll have a fantastic business," grins Mr Purves. "And if we can get 4,000 cars we'll have a fantastic business."

Aston Martin unveils £1m car

Its feathers ruffled, arch-rival Bentley hit back with the Continental Supersports, described as "the fastest, most extreme Bentley ever" by company chief Franz-Josef Paefgen.

While Aston Martin launched both the DBS Volante, a convertible version of its high-end model, as well as its most powerful Vantage yet with a V12 engine. And, not to forget, the 177, a £1.25m car that takes pride of place on the Aston stand.

"I grow in value, not volume," Aston's chief executive Ulrich Bez quips before breaking off the interview to show off the DBS Volante to a pretty blond woman.

Aston Martin saw sales drop from a peak of some 7,400 cars in 2007 to 6,400 in 2008. This year sales are set to come in at about 4,500 to 5,000 cars, Mr Bez predicts, blaming growing resentment of wealth.

Sales in 2008 Aston Martin: down 13.5% Bentley: down 24.1% Rolls-Royce: up 20% Rolls-Royce and rivals face challenging times

"The public has started to blame rich people for spending their money," he reasons. "But wealth money is driving the economy. Someone who has £1m may keep it in the bank where it does nothing or he can buy a car and thereby give somebody a job."

Bentley chief Franz-Joseph Paefgen, who saw sales fall by about a quarter in 2008 from a peak of about 10,000 cars in the year before, believes that "it is a very natural reaction" for people to postpone luxury purchases.

"In an environment like this, people are not ready to buy luxury goods," he says.

Mr Purves agrees, and acknowledges that although its sales have held up well so far-with a 20% rise to more than 1,200 cars in 2008, "sales of Rolls-Royces are affected by recession".

"But our customers are not," he adds, pointing out that its traditional customers can still afford to buy its cars.

Bentley chief Paefgen sees a shift away from luxury during the recession

Hence, once a recovery is underway, demand "comes back strongly", he predicts.

"That pent up desire, that aspiration, does not go away," Mr Purves says.

In the meantime, the trio of British luxury car manufacturers are making the most of the situation, with both Aston and Bentley pushing up prices and unveiling ever more expensive models, which are more profitable and thus make it easier to live with lower sales volumes.

In terms of profits, it is better to sell 1,000 DBS models than to sell 1,500 of the Vantage, Mr Bez points out. Bentley, in turn, is restructuring its Mulliner division with a view to sell more bespoke cars. "We are trying to use the crisis to restructure the business in a much leaner, more efficient way," explains Mr Paefgen.
BBC NEWS REPORT.