Rolls heading into the black: Rising export demand promises better year after cuts

Click to follow
The Independent Online
ROLLS-ROYCE, the luxury car maker, is on course to make a profit this year after losing more than pounds 80m in the past two years, its owners, Vickers, said yesterday.

Following a series of heavy job cuts that have reduced the worldwide workforce by more than half to 2,400, Rolls expects to achieve its break-even sales target of 1,300 cars this year.

The news would seem to safeguard the future of the world's most famous motoring marque after a period of turmoil during which its independence and very survival were called into question.

Although the market in the United Kingdom remains badly depressed, with Rolls-Royce sales down from 222 in the first half of last year to only 161 in the same period of this year, demand is picking up in new export markets.

Increased sales in the Far East, China and the emerging economies of Eastern Europe have offset continuing poor demand in Western Europe.

Rolls plans to open a new dealership in Moscow this month, and is expected to appoint a distributor in China later in the year.

In the past two years Rolls has made operating losses, before interest, of pounds 33m. In addition, Vickers has been forced to set aside a further pounds 50m to cover restructuring and redundancy costs at the Crewe-based company.

Last year Rolls saw worldwide sales fall to 1,378 - fewer than half the record 3,333 cars sold in the the peak year of 1990 - and was largely responsible for Vickers' slumping to a group loss of pounds 26m.

Since 1990, Rolls has cut the workforce at Crewe to 2,100 and closed its coach-building works in north London, reducing the break- even sales target by more than a half from 2,800.

(Photograph omitted)