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Fri 13 Jan 2017 01:10 AM

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Young wheels: Rolls-Royce CEO Torsten Müller-Ötvös

Rolls-Royce’s millennial-makeover has shaved 10 years off the average age of its drivers - helped by a surge in popularity among the GCC’s ultra-wealthy, says CEO Torsten Müller-Ötvös

Young wheels: Rolls-Royce CEO Torsten Müller-Ötvös
Torsten Müller-Ötvös worked at Rolls-Royce for 15 years before being appointed as CEO in 2010.

There is a reason Rolls-Royce Motors appointed its youngest-ever chief executive in 2010.

“I don’t want to say the brand would die, but the brand would never have had the success it has had over the last couple of years if we hadn’t rejuvenated it,” CEO Torsten Müller-Ötvös boasts.

He is probably right. Until a couple of years ago, the English automobile brand was predominantly known as a rich old man’s chauffeur-driven car: smartly classic, over-the-roof expensive and the object of affection of the average 56-year-old.

But today the world’s richest are getting younger, younger and younger.

“When you look into ultra-high net worth individuals, people who really have lots of money, you will see that the majority did not inherit their money – they self-generated it,” Müller-Ötvös says. “These are very entrepreneurial people, be it ladies, be it men. And they are very much in completely new [industries] like IT, real estate, engineering development, robotics - industries that are able to generate wealth quite quickly.

“These so-called millennials are the next generation for Rolls-Royce.”

Since Müller-Ötvös added some younger spunk to the brand, the average age of a Rolls-Royce driver has fallen by a decade and is now estimated to be 45. While that may still be a long way off the millennial age bracket of 18-34, it is half way there compared to a few years ago.

So, how did an arguably outdated automobile become a Generation X toy car? By scrapping its chauffeurs.

“The majority of our cars are self-driven. The Wraith is only self-driven; Dawn, only self-driven; Ghost, 50/50; Phantom is probably more like 70/30, 30 [percent] being self-driven,” Müller-Ötvös says.

“The introduction of the Ghost model in the beginning of 2010 … brought a more informal way, a more casual way to drive a Rolls-Royce. We took completely different approaches when it comes to customers.”

The Middle East is Rolls-Royce’s second most important market despite the average age of consumers in the region being substantially lower than the rest of the world. A 10,000 square feet flagship showroom on Sheikh Zayed Road in Dubai and the brand’s Abu Dhabi dealership make up two of Rolls-Royce’s top five sales points worldwide.

“We are basically following the wealth. Wherever the wealth travels, we are around,” Müller-Ötvös says.

The latter is by all means true. In October 2016, Rolls-Royce launched what it calls an ‘interactive boutique’ in the heart of Dubai. The new space located in Jumeirah is a first of its kind experiential showroom credited to a multi-million dollar collaboration between Rolls-Royce and its UAE brand representative AGMC.

Rolls-Royce recently announced its second-highest-ever annual sales results for 2016, delivering 4,011 cars to customers in 50 countries worldwide.

“What we are doing here in Dubai with the new boutique is something that is also new for us. We are [entering new] areas in style, which is not what I would call our normal mode of business,” Müller-Ötvös says.

Spanning 7,300 square feet, the showroom includes top-to-bottom pixel animated screens on external windows and features an interactive ‘spirit of ecstasy wall’, a digital experience that allows customers to use motion-capture technology to briefly transform themselves into the car’s iconic bonnet ornament.

The boutique also houses an ‘inspiration studio’ that showcases historic one-off Rolls-Royce vehicles and a bespoke atelier displaying a variety of paints, exotic woods, leather and gold-plated spirit of Ecstasy bonnets to help clients commission and design their own cars.

The customisation business, according to Müller-Ötvös, is second-to-none.

“You don’t see anyone who can deliver like Rolls-Royce can. Particularly here in the Middle East, bespoke business is unbelievably strong,” Müller-Ötvös says.

“Bespoke basically says, ‘you tell us what we should build you and your imagination is our limit’. And that is not a marketing stroke; that is the truth. Our Middle Eastern customers are extremely fond [of the fact] that every car is very unique and carries certain features and family crest kind of things.

The 'Spirit of Ecstasy' bonnet ornament.

“They have a big love for bright colours, big love for very intricate patterning and details in the car. When it comes to marquetry, when it comes to design, there is so much fantasy and creativity around this market which is also mind-boggling for me. I can tell you without knowing by just looking at the car that goes down the line at our Goodwood plant [the carmaker’s headquarters in the UK], this is a car for Middle East. And 95 percent of the time, I am right.

“For instance, we have recently seen an orange metallic Phantom coupe going down the line with yellow leather inside and you would normally say, ‘that is challenging’. It is probably not for London, but in these conditions here [in Dubai] where you see lots of desert kind of colours and sunshine, it is fantastic, lovely. In Middle Eastern cars, we’ve had mother of pearl, we’ve had emeralds, rubies [and] diamonds fitted into different panels.”

The customisation has allowed Rolls-Royce to really rev up its presence in the region, which is now its second most profitable, behind the US.

“Unbelievable. This market has grown over the last couple of years fantastically,” says Müller-Ötvös. “Our strongest performing market in the region when it comes to percentages and growth are Abu Dhabi and Dubai. Saudi Arabia has always been excellent for us [too]. So they are what I would call big, big pockets of excellent growth over the last couple of years. [In 2015], four of the top five dealers globally were from the Middle East, Doha being the fourth.”

Preparing a 1926 Phantom I car for auction.

The number were fantastic indeed. In 2015, the brand recorded its second highest sales in its 112-year history with 3,785 cars delivered to customers. In the Middle East, it saw a 4 percent rise in sales revenues compared to 2014, with Qatar alone recording 21 percent growth. Still, with weak oil prices, stock market developments and regional political unrest, the Middle East had its challenges for Rolls-Royce.

“Those reasons are impacting the way we are selling cars here currently, that is for sure. But let’s wait and see how that develops...,” Müller-Ötvös says, adding that the last quarter of the year is usually the carmaker’s strongest.

However, pitfalls in the Middle East were nothing compared to the blow the brand took in China, where it reported a 54 percent decline in sales in 2015, although Müller-Ötvös says the market is returning.

“We see green sprouts, and you always see [some] markets going up and others that are on the downturn, because for our clients it’s never that they are short of money. Never. This is not the case,” he says.

“It’s not that you can’t afford suddenly, overnight, a Rolls-Royce. It is all about consumer sentiment and knowing that 80 percent of our customers are entrepreneurs running their own businesses. When your business is not in proper shape due to the overall economy, then you’re probably not prepared to buy a new Rolls-Royce. Then you think, ‘Oh, let’s better postpone it by a year or whatever’. And that happens. So we are not immune to redundancies and recessions in markets.”

The company launched its Phantom Coupé Tiger at the Dubai International Motor Show in 2015.

While the UK-based firm saw a 6.8 percent drop in car production in 2015, Müller-Ötvös is confident that final figures for 2016 will be stronger. While he will not divulge current statistics, he says an increase in production is out of the question for 2017.

“[Limiting production] is fundamentally important for our customers because they don’t want to see their cars at every single street corner. That is the last thing you want to see. You want to make sure that your car is highly exclusive,” he says.

“We are currently selling around 4,000 cars a year. That might grow when Cullinan [Rolls-Royce’s SUV model due for release in 2018] comes, but not to big numbers.”

Though tight-lipped on the Cullinan project, Müller-Ötvös says the new model will be a “big surprise” to the public.

For now, he says, Rolls-Royce will “hibernate”.

“We are never pushing any volume. I never have any volume targets. That is detrimental against luxury and we would never do that. I mean if a market is down for obvious reasons because the economy is not good, then I can’t push. Pushing doesn’t help. If the sentiment is not good to buy, pushing doesn’t help. That is why volume pushes is not something we would ever do,” he says.

Supermodel Kate Moss purchased a Rolls-Royce Dawn last summer, giving the brand extra kudos.

“Of course we are interested in excellent performing dealer bodies and excellent performing teams worldwide but when the economy is faltering, you probably just need to hibernate for some time and then the market comes back.”

But the brand may not need to wait for improved sentiment after all. According to the chief executive, markets such as Japan and Korea are doing fundamentally well on the back of the Dawn model. Rolls-Royce has also revealed it is launching a new Phantom model in the beginning of 2018. However, it also announced last year it is discontinuing the Phantom drop head and coupe models.

Müller-Ötvös says the model has been successful but the brand needs to narrow its investment focus.

The new Cullinan is not the only project in the pipeline for the legendary marque. In June 2016, it revealed its first driverless vehicle, the Vision Next 100 ‘103EX’, which will do away with the steering wheel and produce no emissions.

Müller-Ötvös calls it “the lighthouse for 2040”. While a launch date is years – if not decades – away, he promises the car will be revolutionary, bespoke, and not like “little Google puppets”.

“It carries complete autonomous drive, it carries artificial intelligence when it comes to navigation and it also carries a complete new form of what we call coach-built so that the whole car is commissioned, including the exterior, by the customer,” he says.

The Rolls-Royce Dawn, a super-luxury soft top convertible, launched in Chennai, India, last June.

“That’s the next level of bespoke. So it is not only what happens in the interior and what happens with materials and colour but you … [can also] commission your body. And for us, it was important to do so because our customers are highly interested, but they are not forced to drive around in self-driving little Google puppets or whatever be in future.”

However, the motor mogul concedes there could be some hurdles given the law trails behind technology.

“There are lots of unanswered legal questions currently. So for instance, what happens if different sorts of people are crossing the road? Is the car then crashing into all the people? These are very horrible questions of course, but all this needs to be answered when it comes to artificial intelligence driving your car,” he says.

“I think the technology will be sooner or later right to deliver that. It all depends now on mapping, proper mapping worldwide and then of course lots of sensors and radio functionality which allow the car to really drive itself. But I am convinced that we will see that sooner or later.”

The future for Rolls-Royce’s driverless car may not be in public view yet, but one thing is for sure when it comes to the iconic British brand. Just like the world’s richest, it keeps getting younger, younger and younger. And Müller-Ötvös is just getting started.

Rolls-Royce has unveiled early designs for its 103EX driverless car with no steering wheel.

The '103EX' would produce no CO2 emissions.

A Trent XWM engine on display in the factory.

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