The Phantom becomes a reality

BMW launches the first German Rolls-Royce
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One of the most secret design projects in automobile history has culminated in the production of a car weighing more than two tonnes, taking up almost 20ft of road, and costing a rather serious £250,000.

Yesterday BMW unveiled its new Rolls-Royce Phantom, hand-crafted at a factory bordering the Goodwood racecourse, outside Chichester in West Sussex.

Working at break-neck speed, the company's German owners claim to have produced the first all-new Roller since before the Second World War.

The new car is considerably more expensive than the last Phantom manufactured by Rolls-Royce in the 1970s and also the model it replaces, the Silver Seraph. But BMW hopes the car will repay its faith by doubling Rolls-Royce's worldwide sales to 1,000 a year compared with about 500 in 2002 – its last year under the ownership of the German car maker Volkswagen.

If BMW has similar success with Rolls-Royce as with its other trophy British marque, the Mini, then the gamble of moving into the ultimate luxury end of the car market will have paid off handsomely.

BMW acquired the famous Rolls-Royce name in 1998 after a battle with its German rival, VW, which had bought the Rolls-Royce Motor Cars company from Vickers for £470m but then discovered it needed the permission of the aero- engine manufacturer of the same name to continue building Rolls-Royce cars. The aero-engine company instead sold the rights to the name from 2003 onwards to BMW for £40m, leaving VW with just the Bentley brand. Since then, BMW has invested £65m in its 42-acre landscaped Goodwood factory and an undisclosed amount on the development of the Phantom.

BMW has picked up arguably the best-known motoring brand in the world for a comparative song. But the damage inflicted on the marque in the past five years has been immense.

While VW has ploughed more than £600m into the Bentley plant in Crewe, it has invested virtually nothing in Rolls-Royce, either in product development or marketing. The consequences can be seen in the dramatic collapse in sales from a peak of some 2,000 a year to a quarter of that figure now.

Tony Gott, the chairman of Rolls-Royce, does not underestimate the challenge he faces in revitalising the century-old marque or the risk he is taking in launching a prestige modelwith a war in Iraq looming and an uncertain economic outlook for the company's two most important markets – America and Britain.

"We are very conscious of the political situation but there is never a perfect time to launch a new car," he says. "What I do know is that Rolls-Royce has not had this level of commitment, investment and concentration for a long time."

The investment began in early 1999 when a small team of British designers was brought together in secrecy to begin work on Project RR01. BMW housed the team in a disused branch of the National Westminster bank near Hyde Park, and their designs and computers were locked away each night in the bank's vaults.

The first three-dimensional clay models of the new car were produced in similar secrecy a year later inside the Holborn film studios in London, unknown even to those companies working next door.

Within the design team, the location was referred to in code as "the bookstore". The decision to locate the plant at Goodwood was also a surprise. It is nestled in the Sussex Downs in an area not noted for engineering, much less car manufacturing. It could not have been further in spirit from Rolls-Royce's first two homes, Derby and Crewe.

It is thought that BMW first looked for a site in west London, close to Heathrow airport. But then it concluded that most of its well-heeled customers would have their own private jets anyway. Goodwood has its own airfield, allowing clients to fly in whenever they wish to check on the progress of their car. Apart from Glorious Goodwood and the Festival of Speed, the area is also an established part of Britain's "summer season", with the Chichester Festival and the annual Cowes Week held close by.

The sailing connection is important because a large number of the 350 employees working at the new plant are craftsmen drawn from local industries such as yacht-building, cabinet-making and production of musical instruments. They are used to working with the leather and wood veneer that is such a part of the hand-crafted image of Rolls-Royce. About 20 cars will be built a week.

At two and a half tonnes, and 19 feet in length, the new Phantom is much bigger than its predecessors but it is also lighter because of the aluminium construction of the body shell. It is also quicker – its 6.75-litre V12 engine propelling the car from 0-60 mph in 5.7 seconds, and producing a top speed of 150 mph.

Lambswool floor rugs, hand-built folding picnic tables, GPS navigational aids, and an in-car audio system comprising nine amplifiers and 13 speakers come as standard. But, as Mr Gott says: "What we are really making is a hull. The car that most customers actually end up buying is one which they have designed themselves."

Indeed, one of the first customers for the new Phantom turned up at Goodwood with his own supply of wood veneer – to ensure that the interior of the car matched his ocean-going yacht and private helicopter.

The Phantom may be all new but it is certainly not all-British. The body shell and engine come from Germany and the gearbox from Austria while the rear axle and drive shaft are derived from the BMW 7 series. At best, perhaps 15 per cent of the components will have been sourced from Britain. And yet there are features which make it quintessentially British – from the rear-hinged back doors and the retractable Spirit of Ecstasy symbol on the front to the umbrella-stand fitted into the rear doors.

Mr Gott will not be drawn on how many Phantoms are already on order or the profile of the typical customer – other than the obvious fact that they are not short of a bob or two. But he points out that the Middle East is one of Rolls-Royce's smallest markets, to dispel the myth that all its customers are Arab sheikhs or oil-rich potentates. "Obviously, they are wealthy people and most of our customers will already own four or five cars and other luxury items but it is hard to pigeonhole them."

But if you have £250,000 to spare and are thinking of becoming a Rolls-Royce Phantom owner, be warned. The waiting list is already more than a year long.