LONDON - British Motor Cars, which has sold Rolls-Royces and Bentleys in the Mediterranean playground of Monaco since 1930, may never sell another.
Although it was the top-selling Rolls-Royce/Bentley dealership in Europe in 1998, British Motor Cars had its franchise terminated in November when it was awarded to a Mercedes dealer.
The Monaco dealership is not alone. Rolls-Royce Motor Cars Ltd.'s temporary owner, Volkswagen AG, has so far stripped eight European Rolls-Royce/Bentley dealerships of their franchises and awarded most of them to Volkswagen dealers.
MORE TO COME
More terminations are coming, although not in the United States or Japan, Rolls-Royce said. Three United Kingdom dealers and one in Southeast Asia have been given termination notices.
Most of the dealers are suing.
'I don't understand exactly what is their final objective,' said Francis Griffin, managing director of British Motor Cars, which has been in his wife's family since opening in 1924. The company drew its customers not only from Monaco, long a playground for the world's wealthiest people, but also from all over Europe.
'It was a total surprise. We never had problems before. In the past we knew everybody at the factory. We were friends. We were part of the family.'
Not anymore. Adrian Hallmark, worldwide marketing chief for Rolls-Royce and Bentley, said the franchise terminations were painful and difficult - but necessary.
ALWAYS BAD NEWS
'Fallout over any dealer situation like this is always bad news,' he said. '(Terminating a franchise) is always the last thing we want to do. But it's a business. High performance, market share and high customer satisfaction with specialist products are the determinants for keeping the franchise.'
Most of the franchises were terminated for 'performance-related issues,' he said, while others were dropped because the company is eliminating its independent importers and moving to direct factory-dealer relationships.
'We're taking on the role of importers in the European, U.S. and Asia-Pacific offices,' he said.
The terminations stem directly from Rolls-Royce's tangled ownership.
At midnight on Dec. 31, 2002, control of the Rolls-Royce name transfers from Volkswagen AG to BMW AG. That is because Volks-wagen bought the hard assets of Rolls-Royce/Bentley in 1998 without acquiring the rights to the legendary name, which were purchased by BMW.
Thus, from 2003 on, Volkswagen will still own the Rolls-Royce factory in Crewe, England, the Bentley name and the Rolls-Royce dealership network. But it no longer will have the right to produce or sell Rolls-Royce cars.
BMW will have the name, but not the factory or dealership network.
PREPARING FOR SPLIT
Hallmark said the company is terminating franchises now to prepare for the split and for the growth of Bentley to 9,000 cars a year from about 1,500 now.
Bentley plans to introduce a smaller, 'entry-level' model in three or four years priced just above the Mercedes-Benz S class and BMW 7 series, he said. The expected volume growth means each Bentley dealer will have to sell a lot more cars.
Many Rolls-Royce and Bentley dealers sell only 12 cars - or fewer - per year now. Hallmark said that number should be closer to 90 per year.
Added Hallmark: 'Our challenge is to make sure we expand the scope of our network and the number of people we have serving and supporting our customers.'