Rolls-Royce is on a roll as the super-rich get all revved up
Sales are booming for Britain's luxury car makers as everyone from Chinese tycoons to film stars scrambles to buy one
Margareta Pagano is a former business editor of the Independent on Sunday who now writes columns and business interviews for a range of publications, including the Independent, Independent on Sunday and London Evening Standard.
Thursday 09 January 2014
The Chinese like their Rolls-Royce saloons to come with fridges for the champagne, humidors for cigars and safety boxes for the cash – and they like the cars fast. In the past few weeks alone, 40 of China's richest tycoons have ordered limited editions of the Wraith – a 6.6 litre twin-turbo V12 saloon that does zero to 100km in 4.6 seconds and knocks the spots off its rival, the Bentley Continental, at the traffic lights.
It's the most powerful Rolls-Royce ever made and now the super-duper Wraith which the Chinese are buying has been dolled up to celebrate their New Year of the Horse at the end of the month. Called the Majestic Horse, the limo comes sprinkled with gold, glitter and horse badges and sells for a cool $778,000 (£486,000) – about 20 per cent more than the normal model.
But the Chinese are not put off by the premium. In fact Torsten Müller-Ötvös, the chief executive officer of UK-based Rolls-Royce Motor Cars, says demand from China's most wealthy businessmen and women is higher than ever and should increase again this year. For the first time ever sales to China have just edged ahead of those to the US, which until now has been the car maker's biggest market, and is likely to overtake America this year.
So it's no surprise that Mr Müller-Ötvös was in the mood for celebrating in London yesterday when he arrived at the Berkeley Square dealership to mark the 110th anniversary of Rolls-Royce. Taking a break from driving the latest Phantom around the square for the world's cameras, he was also celebrating another great year with 3,630 cars sold last year worldwide; the fourth record year. Although sales to China were up 11 per cent, the biggest growth was in the Middle East where sales soared by 17 per cent and Abu Dhabi stays the busiest Rolls-Royce dealership in the world.
Overall, though, 28 per cent of the 3,630 cars sold are now to China, the same as to the US, 20 per cent are sold in the Middle East and 10 per cent in Asia. But there's still life left in the older economies – sales were higher too in Germany, Japan and Canada.
Buying a Rolls-Royce is the ultimate way for successful businessmen and women to reward themselves, he says. "It's the ultimate treat; the reward for hard work. We see that clearly from our customers. Around 80 per cent of our cars are bought by businessmen and women, most of whom have started and run their own businesses; the rest are bought by sportsmen and film stars. What's interesting now is that we are seeing a new group of individuals who have built up mid-sized businesses and they also want to treat themselves to the magic carpet ride."
It's why Rolls-Royce, owned by Germany's BMW, has opened 15 new dealerships in cities such as Istanbul, Beirut, Lagos, Hanoi, Taichung and Manila to cater for the new rich. And they are very rich. Mr Müller-Ötvös reckons a typical Rolls-Royce customer is one of two sorts: the "ultra-rich net worth" who have $30m to spend a year while the "high net worth" customers have $5m a year.
However much they own, they like their cars personalized – whether it's with initials on the seats or 400 diamonds encrusted in the car as in the Phantom Celestial. "Customers can choose what they want. Your imagination is your limit. Nearly every Phantom family model – and three out of every four Ghosts – are personalised. We have never had so many orders for bespoke cars and the trend is growing", he says.
So is the number of women buyers – about 10 per cent of Rolls-Royces are now being bought by businesswomen. They are also keen on cars like the Wraith, cars made for self-drive rather than chaffeur-driven.
Rolls-Royce, Mr Müller-Ötvös adds, is so optimistic about future sales that another 100 staff will be hired at its Goodwood factory on the South Coast this year, mainly engineers and skilled manufacturing workers. It already employs 1,300 worldwide.
Nor is it the only British-based luxury car maker to report a boom. Bentley Motors, owned by Germany's Volkswagen but based in Crewe, also reported yesterday a 19 per cent rise in sales on last year to 10,120 cars. Again, the Middle East saw strong growth while the US is still the biggest market with sales up 28 per cent to 3,140 cars. Even in the UK Bentley sales were up by 25 per cent, while those to Europe were 11 per cent higher.
As Mr Müller-Ötvös – whose own choice of Roller is a silver-blue Wraith – says, Britain's car manufacturing is riding a boom. Rolls-Royce and Bentley may not be British-owned but they are part of the most extraordinary renaissance of the car industry which is creating such strong demand for engineering jobs but also for old crafts such as hand-made leather seats. Or new ones – like studding diamonds into the ceiling of the Phantom Celestial to match the star constellation on the night of the car maker's 10th anniversary at Goodwood.
Now worth around £30bn a year to the economy, the UK's car making industry rose by 7 per cent last year. No wonder apprentices are fighting to get jobs at Goodwood and Crewe.
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