Rolls Royce market buoyant despite recession signals

Torsten Müller-Ötvös took over as new chief executive of Rolls Royce Motor Cars in March 2010. He seems to have a gifted touch when it comes to British motoring icons as he was instrumental in re-launching the Mini brand between 2000 and 2003 and rescuing it from nostalgic abandon and giving it new life as a brand for a whole new generation of car buyers. Over his two years with Rolls Royce, his influence has begun to manifest itself again, this time in the ultra-luxury end of the market and most specifically with the Ghost model. Traditionalists might shudder or even raise the tonsorially perfect eyebrow at Müller-Ötvös’ methods, but they have been singularly effective. “When I took over some two years ago we looked into the untapped potentials in markets where we could grow,” he said in a recent interview with Arab News. “We created a completely new marketing initiative by going into Youtube, Facebook, iPad Aps which gave us access to more modern, younger target customers.” He put the current buoyant state of the company’s business down to two factors; a new car and spotting new markets. “On one hand we introduced the Ghost model that has proved to be highly successful, and on the other we needed very importantly to extend our worldwide dealer network,” he said. “We are going to South America where we are going to open in spring 2012 dealers in Brazil and Chile.” The year 2011 was the highest in annual sales in the company’s 207-year history with 3,538 cars delivered, a staggering 31 percent up on 2010. Sales in Saudi Arabia were even more remarkable, up by 37 percent on 2010. Strong sales growth was reported across the globe, with notable results seen in Asia Pacific (up 47percent), North America (up 17 percent) and the Middle East (up 23percent). Globally, China and the US were the most significant individual markets. The United Kingdom showed 30 percent growth and on continental Europe, Germany and Russia were the largest growth markets, each more than doubling sales compared with 2010. Müller-Ötvös’ energetic approach came with the complete re-working of the Goodwood assembly plant in southern England to cope with increasing demand. With typically practical understatement he added: “It’s an ongoing, daily tough business, but success does not come by itself – you need to do something.” Müller-Ötvös saw the topic of global recession a differently from political and economic commentators as he separated companies from countries. Many states had gone into crisis but not necessarily companies. Many in the European and US market were still performing well and positive signs from the US over the last few weeks with unemployment down and the housing market getting back on track he thought indicated an underlying resilience and potential. Yes we have certain crises, — euro and some debt situations in certain countries affected very much the US, but those signals we have seen over the last couple of weeks coming from the US are really materializing. Also this year is election year, which has always proven to be quite a good year for the economy. Feeling unqualified to talk on the general recession, Müller-Ötvös said that when he spoke with customers, many of whom were successful business people and entrepreneurs, they reported a successful 2011. The rise in Rolls Royce sales backs this up in the best possible way. “For that reason I would not say that they were in doom and gloom at all, they were quite bullish and really encouraged and rewarded themselves by buying a Rolls Royce.” Even the political turmoil in some Middle East countries had no apparent effect on sales in the region as a whole, quite the contrary. “Were puzzled in the beginning of the year with the outbreak of the Arab Spring movements – but look at the outcome, sales up by 23 percent. That is not just a result of Dubai and Abu Dhabi, but all markets including Saudi Arabia – all markets really grew.” Commenting on the Middle East in particular, Müller-Ötvös said many Rolls Royce customers ran their own businesses. “It is really pleasing to see how optimistic those people are. We see young Shaikhas who are running a business going for a Ghost or perhaps a Phantom and we see the same pattern in the US with very successful businesswomen and we expect to see more come in the Asian markets. I would not say we are really in a recession.” The introduction of the Ghost, which with its slightly smaller size and exceptionally brisk performance, was for Rolls Royce a departure from the chauffeur-driven car to a owner-driven car. The profile of entry-level Rolls buyer has changed as a result. “We see a lot of customers for example in the Middle East between 30 and 40 and we even see amazingly a 10 percent female share,” observed Müller-Ötvös. “And this is not in the form of a present from the husband, but this is self-bought cars,” he said. “It’s fantastic and I think it is a reflection of societal development.” The Ghost, thought Müller-Ötvös, was the perfect car for the times and was the subtlest way to drive a Rolls Royce. It was by intention not as ostentatious as the Phantom. “It is used by many of our customers as the daily car to go to business. That is what it makes it so successful – and it has all the credentials of a Rolls Royce in itself.” He felt that the unifying characteristic of the customers for all the cars in he Rolls stable was the drive for perfection. “They are looking for the best cars in the world, and Rolls Royce is by far the best car in the world. That’s what unites all our customers. They are blown away by the craftsmanship, by the attention to every single detail that we put in our cars, by the 400 hours it takes to build a Rolls Royce with the finest quality and sumptuous materials — that is what drives them.” To align the company with the drive for eco-friendly vehicles, it built in its own inimitable way the all-electric 102 EX and too it on a world tour to gauge reaction. Müller-Ötvös sharing the first impressions of initial feedback on the experience said that reaction by customers who had the chance to drive the car, said, “The feedback is, let’s call it ‘ambivalent.’ What is liked is the ‘waftability’ of the electric car, and also the sound level — more or less silent. It is what they are used to from a regular Phantom.” To the crunch question, ‘Would you buy one?’ Müller-Ötvös said the answer was a polite “No.” “These are due to compromises aligned with the electric car, charging time and driving distance. And, when you drive the regular 12-cylinder Phantom, which is unbelievably quiet, the difference between the electric Phantom and the regular Phantom is not really big. It is not like the difference between a normal petrol car and an electric one — you just don’t perceive it in a Phantom. Many of our customers are saying, “Not really interested.” Our customers will not accept any disadvantages — and why should they?”