Leading Article: Back to the roots of Rolls-Royce

THIS NEWSPAPER is pleased that Rolls-Royce has been bought by a German firm. We are regretful too - Britain has lost ownership of another national institution. But what matters more is that good engineers and good business brains, backed by a really strong company, should save and rebuild a faded glory; that British jobs are saved and created. Today, in the absence of an independent British car manufacturer of any serious scale, that meant a foreign owner. A German one is fine.

The success and failure of Rolls-Royce is a parable of much else in 20th- century British manufacturing history. The company has "crafted" (as they call it) some of the most beautiful cars with some of the most evocative names in motoring history - Silver Ghost, Silver Cloud, Phantom, Wraith. The cars have been owned by heroic figures like John Lennon and Lawrence of Arabia, although Denis Thatcher was perhaps a more typical customer. Good old-fashioned engineering, selling on romance, a liberal splash of snobbery. But then came the rub: to those in the know, Rolls-Royce ceased to make the best cars in the world some time back. It didn't innovate. It stuck with obsolete forms of production. Its marketing strategy was awful.

Luckily for Rolls-Royce enthusiasts, BMW's chairman, Bernd Pischetsrieder is quite a sentimental soul himself. When he bought Rover Group from British Aerospace he seemed to take the same satisfaction in acquiring a range of revered British marques that a little boy might when building his collection of Dinky toys. He was said to be particularly pleased that he would have the opportunity to revive Riley (deceased 1969) and Triumph (deceased 1983). What else could you expect from the distant cousin of Sir Alec Issigonis, inventor of the Austin Mini? More to the point is the substantial investment of pounds 4bn BMW is making in developing a new Mini range, greatly expanding Land-Rover, revamping the middle-range Rovers and other projects. The purchase of Rolls-Royce is built on more than a drive to complete Bernd's collection of British classic car badges. Like the developments at Rover it is about making money, by restoring Rolls-Royce's technical pre-eminence.

Pischetsrieder and BMW have more reason than most to know about Rolls- Royce's more recent failings. BMW, Mercedes-Benz and Japanese luxury makes such as Lexus have been making, or crafting, faster, safer, better-handling, more advanced, more reliable, even quieter and more comfortable cars than the Rolls-Royce. They have been catching up.

It would be a crude but useful simplification to say that Rolls-Royce cars have been living off their past. The new Seraph is the first new design in 18 years. Probably the worst thing that happened to the Rolls was that the likes of Elvis Presley and Bernard Manning decided that they would show off in one. Once the temptation, however slight, came to sell cars effortlessly to the undiscerning affluent, the rot set in. A nice steady market of pools winners, entertainers and embassies is fine. But it does leave the marque open to a slightly vulgar and old-fashioned image and dulls the competitive urge.

Developing new models to conform to ever-stricter legislation and ever more demanding customers is very expensive. It is no longer good enough to build a big car with lots of leather and walnut. The next generation of Rolls-Royces and Bentleys will have to be class leaders in safety as well as performance and be environmentally friendly as well as comfy. BMW know all about this and already supply engines and other components for the newer models. BMW are taking their investment seriously. They are taking Rolls-Royce back to its roots.

When Henry Royce, the engineer, met the Honourable Charles Rolls, the entrepreneur-adventurer, almost a hundred years ago, they found that they had a shared interest in building a car that would be ahead of its time, not simply an imposing piece of conspicuous consumption. It would have been next to impossible for Rolls-Royce's last British parent, Vickers, to make Rolls-Royce ahead of its time now. Both the Rolls-Royce and Bentley badges have enormous scope to be leaders in many segments of a more fragmented car market. There are new niches appearing with every motor show. Why shouldn't there be a new smaller sports model? Or a luxury 4-wheel drive vehicle like the Range-Rover? When Jaguar and Mercedes are planning or building smaller models, what would be wrong with a family saloon Rolls- Royce, the ultimate luxury rep-mobile ?

BMW has spent pounds 380m buying Rolls-Royce and will doubtless be investing much more. But that is the best way of ensuring that, as Henry Royce once famously put it, "the quality remains long after the price is forgotten". Rolls-Royce Motors has a silver future. Vorsprung durch Technik, as they say in Crewe.