Bentley unveiled its new Continental GT concept at the 2002 Paris Motor Show. Unlike Bentley’s existing Arnage—a twin of Rolls-Royce’s high-riding Silver Seraph—it was low and curvaceous, a modern interpretation of the brand’s glamorous 1950s Continental coupe, powered by a twin-turbo W-12 engine that put out more than 500 horsepower.

“We didn’t announce a price for it,” recalls Christophe Georges, Bentley’s chief operating officer, who was then sales director. “Everyone assumed it was a new supercar and would be much more expensive.”

Ferdinand Piech, Volkswagen’s C.E.O., had a different approach in mind. At the time, the highest ends of the Audi, BMW, Jaguar, Mercedes-Benz, and Porsche lines maxed out between $100,000 and $150,000, with a total sales volume of roughly 100,000 cars a year. Ferraris, Maybachs, and the brand-new Rolls-Royce Phantom started well north of $200,000—with total annual sales of just 3,500. In between was absolutely nothing.

The Continental GT went into production in 2003 at a price of about $150,000. (For 2008, it’s risen to $175,990.) It fit neatly below the Arnage sedan and Azure convertible, which are now priced at $220,000 to $330,000, respectively, racking up the same few hundred sales a year they did a decade ago.

Rolls-Royce aimed at this same rarefied segment in 2002, taking the brand further upmarket with the Phantom. “BMW has been left trailing,” says British automotive-industry analyst Dave Leggett of the website Just-Auto. A new Phantom starts at $335,000 and competes with Daimler’s new Maybach superluxury brand. It has taken Rolls several years to return to historic sales levels; last year, it had its best year since 1990, selling 1,010 Phantoms.

Meanwhile, the Continental, known as the Baby Bentley, “grew the brand by making it fashionable and giving it appeal to a new, younger generation,” Leggett says. It took just five years for Bentley’s sales to soar to 10,014 a year.

The Continental GT coupe has spawned three variants: the GTC convertible, the four-door Flying Spur sedan, and the even faster and more powerful GT Speed. All of them share subtle aesthetic touches, says design director Dirk van Braeckel. Individual headlights and tail lamps, for example, are recessed into the car’s metal panels, rather than ending flush at the edge of the hood or trunk lid.

Many Continental buyers are self-made, says van Braeckel, unlike those who might be more attracted to a Rolls-Royce. They also tend to be on the younger side—in their forties rather than in their fifties and sixties, and one in five is a woman. Most important, 84 percent of them have never owned a Bentley.

One indication of just how profoundly Bentley’s growth has changed the game, spy photos of a new, smaller Rolls-Royce scheduled to be launched in two or three years recently appeared on auto websites. Its target market seems identical to to the one courted by Bentley’s Continental. The quiet stepsister has become the belle of the ball.