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Q&A: Rolls-Royce's Kalbfell says 2004 unit-sales target will be met

Goodwood, England. Despite sales of just 358 Phantom sedans by the end of July, new Rolls-Royce boss Karl-Heinz Kalbfell is optimistic that he will reach the original 2004 target of 1,000 cars. He also wants the BMW-owned British luxury brand to make a profit as soon as possible. To achieve this, the model range needs to be extended and Kalbfell already has ideas for that. He talked about the changes at Rolls-Royce with Automobilwoche's Wolfgang Eschment.

The impression is that things are going a bit slowly at Rolls-Royce. By the end of July, 358 Phantoms were sold worldwide. This equates to annual sales of just about 700 units a long way from the target of 1,000 units for this year.

Business in this segment is subject to swings. We just had a holiday period, during which sales are generally lower. I have great hopes for the last two months of the year. Due to our customers' income structure, they are paid dividends or bonuses during that time of the year.

Does that mean you will keep the 2004 target of 1,000 vehicles?

Yes, and we are well on the way to achieving it. We are doing everything we can to reach the target.

Were BMW's expectations for the super-luxury market too high?

No. We examined the potential and based our targets on this. However, I believe that we relied too much on the fact that we already were an established, 100-year-old brand. To just continue from there is not sufficient of course. We are only at the beginning of developing our future business and the necessary resources, specifically within sales and marketing. We have only been in business since autumn 2003. It is all about how much confidence one has in this business, how one builds it up and lays the right foundations for the future. There are also many markets in the world we have not developed yet and we want to find good sales people for those places. The development within the markets has to reach the same level we have already reached within production. Our main focus is on marketing now.

What is the Phantom's sales potential on the world market?

I believe the potential is 2,000 vehicles. There is further potential within this price segment for example for open-top automobiles. Our strongest market is the United States, which represents 40 percent to 50 percent of sales, as planned. Our portfolio suits this market perfectly. After that, Europe, the Middle East and the Far East each represent a third of the sales. China and Japan are already strong individual markets.

Is China also a potentially large market for Rolls-Royce?

Business is going well there but we still have to increase the level of familiarity specifically in China. We need to have a greater presence and have more demonstration cars. The market is hard work. We make 5 percent of our total sales in China, which equals an annual volume of approximately 50 cars.

Which other markets still have potential?

Russia, for example, and Korea, where we started cooperating with a new importer in June.

How intense is the competition from Maybach and Bentley?

Bentley's main product, a sports coupe, is no competition to our range so Maybach is our only real rival and we hold a number of advantages. We have the lead in the US market, for example, with both the quality and exclusivity of our business.

When are you planning to break even?

Rolls-Royce is a long-term investment. Our original business plan covered a period of 10 years. That corresponds with the Phantom's planned life-cycle.

Q: That means Rolls-Royce might not make a profit before 2013?

Every vehicle built brings profit. But the investments are distributed over a longer period of time. But it is up to us to achieve a return on investment earlier than planned through additional models, offers and business areas.

What about the current return on sales?

Our goals are the same as those of the other brands belonging to the BMW group. We did not invest in Rolls-Royce just for prestige reasons. We will make a positive contribution to the overall business.

You mentioned additional models. What are you thinking of exactly?

A long version of the Phantom. The positive response we received in Geneva with the 100EX convertible also tells me that we need to do something within that segment. A lot of customers wanted to put a deposit on such a car. Some even tried to buy the prototype, which is worth millions. Armored versions are also a possibility. The demand for armored vehicles is growing consistently.

Which model is the easiest to realize?

The long version.

Would be possible to launch such a model by 2006?

Yes, it would be.

What are your main targets at Rolls-Royce?

That Rolls-Royce takes a safe and established top position within the automobile industry, both as a brand and corporation and that it will play an important part within the BMW group. To achieve this we definitely need to be the No. 1 within the segment

The Queen doesn't yet have a Phantom in her garage. Will that be changing soon?

We will suggest this to the Royal fleet operators when the occasion arises.

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