Font Size

- Aa +

Fri 25 Jul 2014 07:09 PM

Font Size

- Aa +

Behind the scenes at Rolls-Royce

In the ten years since BMW relaunched Rolls-Royce, sales of one of the world’s most famous brands have hit record levels. Arabian Business takes a tour around the company’s Goodwood factory to discover why the world’s richest people can’t seem to shake their addiction to a British institution.

Behind the scenes at Rolls-Royce

It takes Mark Court about three painstaking hours to paint the ‘coachline’ on each Rolls-Royce that roars off the production line at the carmaker’s plant in the south of England. Court is currently the only person who is qualified to paint the line, a pinstripe that runs right down both flanks of each six-metre-long vehicle, and which can feature anything from family crests to logos and Arabic calligraphy. It took the former signwriter a five-year apprenticeship just to learn the skill – and has even resulted in him being flown to Dubai by a member of the local ruling family who felt that he needed a new coachline for his car.

Moving around the Rolls-Royce factory in Goodwood, Sussex, this attention to detail veers towards the obsessive. Each vehicle, for example, is polished for at least four hours before it is deemed fit to be released to its owner. The leather that goes into the upholstery comes from two-year-old bulls that are reared in high-altitude pastures in Bavaria to ensure that no mosquito bites tarnish the hide.

A team laboriously drills the 1,340 tiny holes for fibre-optic cables that produce the ‘starlight headliner’, an effect that looks like the night sky on the interior roof of the car. And for those who care for such things, it’s even possible to have an exact replica of the sky at a certain geographical point on the day you were born.

The general atmosphere is not what you expect from a car plant; as nearly every process is carried out by hand, it is remarkably quiet. It is also virtually invisible from the nearby road, thanks to a design by Sir Nicholas Grimshaw that incorporates a roof covered with foliage. And the result? A product that ranks alongside the likes of Patek Philippe, Gulfstream and Gstaad, as one of the ‘must-have’ brands for billionaires, potentates, celebrities and tycoons the world over.

“We are mad about quality and also mad about attention to detail,” admits Torsten Müller-Ötvös, the engaging chief executive of Rolls-Royce Motor Cars. “This factory has, for me, become a symbol of what the brand is all about — transparency, cleanliness, accuracy and quality.”

Whatever is going on down in Sussex is clearly working. It is now 16 years since German manufacturing giant BMW wrestled the Rolls-Royce brand away from arch-rival Volkswagen, and just over a decade since the first Phantom cars were produced at the Goodwood plant. By buying the rights to the Rolls-Royce brand and logo for just £40m ($68m), BMW managed to outmanoeuvre Volkswagen, which had already bought the historical Bentley/Rolls-Royce factory in Crewe from previous owner Vickers, plus the rights to the ‘Spirit of Ecstasy’ mascot and the legendary radiator grille shape for £430m.

However, without the ability to actually call the cars that were produced in Crewe Rolls-Royces, Volkswagen was forced to settle with BMW (which was already producing the engines for Vickers), leaving the Wolfsburg-based company with Bentley. In its search for a new location to build one of the world’s most famous cars, BMW hit upon the bucolic landscape of Goodwood, which already has close ties with motor sport through the Festival of Speed and the nearby racing track.

While BMW has invested heavily in Goodwood, there’s little doubt that Rolls-Royce has been standing on its own two feet for some time now. Since 2009, when the brand suffered a 17 percent drop in sales due to the financial crisis, the firm has now seen four years of record sales, culminating in a 1.5 percent increase in 2013 to 3,630 cars.

The first half of this year has been even more impressive, with sales rising by 33 percent over the same period in 2013, boosted by the launch of the Wraith model, which began deliveries in the final  quarter of last year. The company now sells three main models; the Phantom, the slightly smaller Ghost and the Wraith coupe.

For Müller-Ötvös, the Rolls-Royce story is just as much about brand as it is about engineering. When questioned about the growing waiting lists for his product, he points out that this is part and parcel of the drive to deliver exclusivity.

“What you don’t want to see is dealerships flooded with cars — for me, that is unthinkable,” he says. “Look at what Hermes is doing with handbags, and look at what other high-end luxury brands are doing — they are limiting volumes for very good reasons, and that’s exactly what we’re doing.

“It is relevant for Rolls-Royce to stay highly exclusive, and we are always producing one car less than we can deliver to our customers. It’s all about resale values, and we never put rebates or discounts on our cars — that’s not our business model.”

Compared to Rolls-Royce, Ferrari shipped a sliver under 7,000 cars last year (down from a peak in 2012 of 7,318), while Maserati sold 15,400. Bentley, meanwhile, sold a record 10,120 cars in 2013. But is the chief executive worried about falling behind? Far from it - if anything, he’s actually reveling in the numbers.

“If it comes down to exclusivity, I would say that Rolls-Royce is even more exclusive than Ferrari — and I would say that Ferrari is the only luxury brand that I would consider as being on our level in the way they run the business,” he says. “Our friends in Crewe [Bentley] are always publicly announcing monster, monster volume numbers for the years to come, and that’s annoying for this kind of customer.

“If you talk to our customers about volume, you immediately start to see worried faces. People don’t like that. You don’t want to hear that a lot of other people have the same car as you.”

Aside from Ferrari, whose base at Maranello rivals Goodwood as homage to a brand, Müller-Ötvös sees “jewellery, watches, chalets in the Swiss Alps, private jets” and so on as Rolls-Royce’s true competition. The company’s own research suggests that it’s not uncommon for customers to own between five to eight Rolls-Royces — as well as a series of other brands.

“It’s never the case that they will go for this car over that car,” he points out. “Our client is wealthy — it’s not a question of money. If they want both cars, they will go for both cars.”

Not that a new Rolls-Royce is cheap, by any stretch of the imagination. The Ghost model starts at around $250,000, while the extended wheelbase version of the Phantom starts at roughly $470,000. But costs rapidly mount up when bespoke features are added; whether it’s a specific material for the upholstery, marquetry for the dashboard, a family crest for the headrest or even an inbuilt refrigerator, the team at Goodwood claim that almost any client request can be honoured. It’s impossible to know what margins the company is making on this part of the business, but it looks like a licence to print money.

Nowhere is the tendency to add more bells and whistles to a Rolls-Royce more prevalent than in the UAE, which makes up the company’s third-biggest country market after China and the US. The Middle East as a whole accounts for almost 20 percent of global sales. Abu Dhabi, somewhat astonishingly, was the firm’s biggest volume market anywhere on the planet in 2013, shading Saudi Arabia into second place, followed by Beverley Hills, Dubai and London.

The success of the Abu Dhabi operation, which markets ‘Spirit of Ecstasy’ figurines made of solid gold,  is not only down to the well-heeled inhabitants of the city, Müller-Ötvös says. It’s also down to significant investment made by local partner Abu Dhabi Motors, which has built the world’s biggest Rolls-Royce showroom. In nearby Dubai, partner AGMC has put together a $2m workshop and service facility that the chief executive labels a “spa for cars”. The desire for bespoke products in the UAE is such that dealers have sold several ‘one-of-a-kind’ vehicles, such as the ‘Ruby Limited Edition’ Phantom (which sold for $708,000) and the nautically themed ‘Ghawwass’ Phantom, complete with pearl inlays and dhow logos stitched into the headrests. The Abu Dhabi dealer has even been known to buy cars and carry out bespoke work itself before even offering them to specific clients.

That investment is being matched in Saudi Arabia, where a third showroom is in the works, and also in Bahrain, which saw sales increase by 22 percent last year. Elsewhere, the CEO cites CIS states such Azerbaijan and Kazakhstan as presenting an interesting potential market, while countries like China and Japan are also performing well.

China, in particular, has become a battleground for car manufacturers. Just over 22 million vehicles were sold in the Asian economy last year, compared to nearly 17 million in the US. Analysts say that Chinese buyers will account for 35 percent of all new car purchases by 2020. But set against those figures are a drive by the government to limit official spending on gifts and luxury products, as well as a backlash on social media against party officials who have had a tendency to show off their wealth. However, Rolls-Royce still saw around 11 percent growth in China last year, and the chief executive says that he has no concerns over a potential market slowdown.

“We saw really explosive growth in 2010 and 2011... but what is happening in China is that it is now becoming a more normal car market,” says Müller-Ötvös. “On the subject of conspicuous consumption, we are not selling ‘bling’, that’s for sure.

“I would say in general that China is still a market that has a lot of growth potential over the next few years. It might be that the market experiences a dip from time due to political regulations or whatever, but long term, currently the situation is that for every 1,000 Chinese, only 60 of them own a car. For Europe the figure is around 600 or 700, so that gives you an impression of what will happen there over the next few years.”

The growth model over the next few years could perhaps be best described as steady. It seems likely that capacity will be increased, while the company is also working hard to open up new markets and widen its owner base. In addition, it is also working on developing new models.

Back in the 1980s and 1990s, at a time when Rolls-Royce was at its lowest ebb, the brand had a reputation for being fusty and old-fashioned, associated with chauffeurs in peaked caps driving a fairly small and ageing demographic. Rolls-Royce Motor Cars has clearly been working hard to dispel that image, with the Phantom designed first and foremost to win back established customers of the brand. Seven years later, the Ghost was launched; Müller-Ötvös says that 75 percent of the model’s customers were new to the brand and that owners are on average ten years younger than those who have bought the Phantom. They also tend to drive the car more themselves, a trend that has continued with the launch of the Wraith, which the chief executive describes as “a pure self-driver’s car”. In addition to younger clientele, the company is also seeing more women buying the car – in all, they make up 15 percent of total sales, although Müller-Ötvös thinks that around 20 percent of Wraith owners are likely to be women.

As for new models, the next new version will be a drophead Wraith, which the chief executive says will probably be sold from 2016 onwards. Then, of course, there’s the highly rumoured SUV concept, which would be uncharted territory for the firm. Last year, Bentley said it would launch its own SUV in 2016, while the Lamborghini Urus will go on sale in 2017. Only Ferrari has definitively said it will not enter this segment.

“We are on it, let’s put it that way,” says Müller-Ötvös. “No decision has yet been made, and for very good reason, because we need to be sure whether it fits the brand, whether it fills customer requirements. I get questions about this from owners all over the world quite intensively.

“But it has to be perfect, Rolls-Royce is never about compromise. You don’t want to water down the brand by bringing something into the market that looks like a Rolls-Royce, but definitely doesn’t drive, behave or even smell like a Rolls-Royce.”

The third plank of future growth lies in gaining further revenues from other areas, such as the company’s second-hand car programme (called ‘Provenance’) and ramping up production. Physical expansion of the Goodwood plant is impossible, as it is based in an Area of Outstanding Natural Beauty, but Müller-Ötvös says that there are ways around that.

“What we can do, of course, is to modify shift patterns, even modify the lines in a way so there is potential for future growth, and also of course for future additional models,” he says.

So does the chief executive have an idea of what Rolls-Royce’s ultimate capacity might be? “Not yet,” he says, before adding, intriguingly: “But definitely far beyond 10,000 units, so don’t get worried about that.”

Not many of the 1,400 staff working at the Goodwood plant appear to be too worried about the future. The revival of Rolls-Royce comes at a resilient time for the British car industry, which built 1.5 million cars last year (the highest figure since 2007), with 80 percent of these being exported abroad. For the time being it looks like the firm will try and stick to the ethos laid down by joint founder Sir Henry Royce: “Take the best that exists and make it better”.

For all the latest car news & reviews from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Ayoola Rasaq Akanni 5 years ago

True experience is the best teacher

Ayoola Rasaq Akanni 5 years ago

Thank you for cooperation