Smooth Ride

The rapper Xzibit made his name customizing cars. But when it came time for the host of MTV's "Pimp My Ride" to purchase his most expensive car ever, he didn't change a thing. His $200,000 gray green Bentley Continental GT came fully loaded straight from the factory with hand-stitched baseball-glove leather seats and a massive 12-cylinder engine. "There was no pimping required," says Xzibit. What was required, though, was some restraint on the road home to L.A. from San Francisco, where he bought his Bentley a few months ago. But Xzibit couldn't resist putting that 552-horsepower engine to the test. Before he knew it, he was doing 120mph and a police car was coming up in his rearview mirror. Fortunately for Xzibit, the cop was a car enthusiast. "I've never seen one of these on the road before," the cop gushed, says Xzibit, who adds: "He only wrote me up for going 80, which was a lifesaver."

Bentley has gone through its own lifesaving experience in the past eight years. A threadbare relic from the days when Britannia ruled the automotive high road, Bentley was reborn when it was acquired by Volkswagen in 1998. Yes, VW, the Beetle car company. What would the oh-so-pedestrian "people's car" maker know about august Anglo automobiles? Plenty, it turns out. VW injected nearly $2 billion into Bentley, overhauling its Crewe, England, factory and developing the new Continental car line that it cleverly priced at the low end of the über-luxury-car market--between $150,000 and $200,000. To mere mortals, that might seem like an outrageous sum for a car. But to the world's growing group of millionaires, it sounded like a bargain. And now the "budget" Bentley has become the car of the stars. Paris Hilton famously soaped up a black Bentley in a Carl's Jr. burger commercial and then went on to lose her own white GT in a poker game. Michael Jordan is said to have used his GT as the inspiration for his latest Nike shoe design. "There's so many Bentleys in the Hamptons," says Fabrizio Sotti, J.Lo's producer. (They each have one.) "It's like taxis in New York City."

But it isn't just Bentley buzz that's at a record high. So, too, are Bentley's global sales, which are on pace to top 9,000 cars this year, a ninefold increase since the GT first hit the road in 2003. Last year Bentley scored another sales success with the slightly stretched four-door Continental Flying Spur, the family car of the line, which starts at $165,000 and has a top speed of 195mph. And this month Bentley launches a $190,000 convertible, the Continental GTC (page E22). It's already sold-out through next spring. The bottom line: VW's Bentley bet is paying off big. Though VW won't break out exact figures, Bentley chairman Franz-Josef Paefgen says the luxury-car maker drove into the black last year, earning profits in the tens of millions of dollars. This year Bentley says it will generate revenue of about $1.3 billion. Analysts figure Bentley earns profit margins near 10 percent--twice the industry average. So profits this year could top $100 million. "Bentley," says auto analyst John Lawson of CitigroupSmith Barney in London, "has been a hands-down success."

Bentley's success in the stratosphere could provide a road map for everyday automakers. The key, say Bentley execs, is getting out of your comfort zone. Instead of simply selling a few hundred cars a year to sultans and crown princes, Bentley lowered its sights and expanded its horizons. With its Continental line it targeted an empty niche just above the high-end Benzes and Bimmers and well below the $250,000-to-$350,000 price of its old Arnage model and its more famous English cousin, Rolls-Royce. "We saw that you could move Bentley down slightly and still keep it away from what we call the cheaper luxury cars," says Paefgen.

While avoiding the riffraff, Paefgen found the demographics were still very attractive lower down. Rolls appeals to the superrich, those with a net worth north of $30 million. But Bentley was going after folks worth a mere $3 million-plus. There are just 80,000 potential customers in Rolls's rarefied neighborhood worldwide. Bentley, by contrast, was jumping into a pool of 1.5 million possible buyers. Still, plenty of luxury-car makers have failed at moving downmarket. Jaguar's $30,000 X-type model never achieved its sales goals and analysts believe it tarnished that elite English car line, which hasn't earned a penny for its parent, Ford Motor Co. "The risk VW took was huge," says German auto analyst Philipp Rosengarten of Global Insight. "They were going after a wide spot on the map and sometimes these wide spots turn out to be black holes."

But the high-octane mix of sexy styling, outrageous power and relatively affordable price lured loads of buyers out of their "cheaper" luxury cars. "I was driving a $120,000 BMW Z8, so the Bentley wasn't that big a step up in price," says L.A. lawyer Bill Price, who recently replaced his $160,000 GT with a $170,000 Flying Spur. "The car looks incredible, but you have to be very careful driving it because it's wicked fast." Now other automakers are going to school on Bentley. "They found the sweet spot," says General Motors car czar Bob Lutz.