The worst of the financial crisis must be over. How can we be sure? Because the super-rich are flooding back to their Rolls-Royce dealers.
In fact, the most luxurious of luxury marques is not just recovering from last year's sale decline, it is absolutely booming. Last month, production topped 300 cars for the first time in Rolls's history, the waiting list is backed up until October at the earliest and the company, now owned by BMW, expects to more than double its sales for the year as a whole.
"We are entering a new dimension of business by doubling the production volumes that are normal for the company," said the new chief executive, Torsten Muller-Otvos.
It is perhaps not surprising that Rolls-Royce sales dipped during the recession, given the Phantom's basic price of £300,000 (and that is only for the 15 per cent sold without modifications). Demand for the world-famous status symbol dropped by 17 per cent in 2009. Because every car is made to order (a minimum of 720 hours to build, including seven hours of hand polishing and using leather hide from upwards of 15 bullocks) as demand drops, so does production. The Rolls-Royce factory in a secluded corner of the Goodwood estate in West Sussex built just 1,002 cars last year – 210 fewer than the record set in 2008.
Even so, Rolls-Royce was relatively well insulated from the recessionary carnage in the car industry which saw the Detroit giants General Motors and Chrysler file for bankruptcy protection, and a rash of takeovers and job cuts as demand dropped through the floor. "We were severely hit by the recession but, compared with other manufacturers – some of whom saw their sales drop by as much as 50 per cent – we did OK," Mr Muller-Otvos added.
Now, with the signs turning positive and emerging economies pulling the world back into the black, sales are at an all-time high. Part of the surge is thanks to the launch of the Rolls-Royce Ghost, which took the marque into a broader market.
Nicknamed the "Baby Rolls", the Ghost is smaller and lighter than the traditional Phantom (although it is still a hefty two tonnes). It is also cheaper, starting at a mere £195,000.
The Ghost was only launched at last September's Frankfurt Motor Show, so the company says it is too early for any authoritative forecasts. But on the strength of current indicators, total sales are expected to split between roughly one-third traditional Phantoms to two-thirds all-new Ghosts. The 30 orders for Ghosts that flooded in within days of the Chinese launch at the Beijing Motor Show in April are a case in point. "It is amazing how very spontaneous these decisions sometimes are," Mr Muller-Otvos said. "People just see the car and say, 'Wow, that's the one for me.'"
Asia's rapidly-growing appetite for Rolls-Royces is fuelling the firm's unprecedented sales. While it sold new cars in China last year, it hopes to sell between 300 and 400 in 2010. Rolls-Royce sales in Britain are also expected to rise by 50 per cent this year, although its European market is more sluggish, weighed down by fears about the euro crisis.
Rolls-Royce has come a long way since a convoluted deal between VW and BMW in 1999 gave the latter the trademark badge, grille, and "Spirit of Ecstasy" bonnet emblem – but nothing else.
BMW's first job was to design a new car from scratch. The resulting Phantom has been so successful that this year the China market alone will outstrip total sales in the first year of production in 2003.
Part of the surge in demand is simply because of Asia's increasing wealth but cultural factors are also at work. "In Asia people like Rolls-Royces because of our very long history," Mr Muller-Otvos said. "The Chinese market in particular is extremely culture-orientated, and people like the heritage and the stories around the brand."
Industry analysts put the case more forcefully. Rolls-Royce is the right brand at the right place at the right time, according to Matthew Alabaster, an automotive expert at PricewaterhouseCoopers. It is a symbol of wealth and personal success that simply has no real competitor.
"Rolls-Royce stands for brash, brazen, British luxury, which is really resonating with those parts of the world where wealth is being created at the fastest rate," Mr Alabaster said. "The brand positioning is absolutely in tune with what people want in the Far East."
Given the cachet of the Rolls as the world's most expensive car, some experts predict that the smaller Ghost model may ultimately prove less successful in China than in Europe, precisely because it is smaller and cheaper than the Phantom. "In China there is no resentment about conspicuous displays of wealth," said Professor Garel Rhys, of the Centre for Automotive Industry Research at Cardiff Business School.
"So there is a question about how well the Ghost will do because it could be viewed as a sign that the driver is not quite so absolutely enormously successful."
As an economic indicator, booming sales of Rolls-Royces are a sure sign of returning consumer confidence. "When you look at the people buying top-end cars, the reality is that the wealth was always there," said David Raistrick, head of manufacturing at Deloitte. "While there has been an element of concern in the past few years, the wealth has not typically been destroyed, but when things looked awful economically, people didn't buy even though they could afford it."
Luxury marques on the rebound
The luxury sports car market dropped by a whopping 35 per cent in 2009. But Ferrari held up relatively well, with sales falling by just 5 per cent to 6,250 cars and its market share rising to 10 per cent.
The ultra-luxury marque, owned by Daimler, has struggled to find a niche. Production is set to rise to 287 this year after collapsing to 205 in 2009, but so far Maybach is far from a rival to Rolls-Royce.
Porsche, owned by VW, has not yet recovered from the recession. Sales of its iconic 911 car fell by 35 per cent in the nine months to April, and total sales were held flat only thanks to the new Panamera saloon.
James Bond's favourite car-maker saw sales slump by 31 per cent to just 4,000 in 2009. But the marque is hoping its new Cygnet city car – available only to existing Aston Martin drivers – will recover the lost ground.Reuse content