Cruising north on the two-lane A5 through the rural Buckinghamshire landscape, it would be easy to whiz past the sleepy rural village of Paulerspury without realizing it contains the DNA of one of the world's most revered automotive marques.
Located in an imposing three-story house at the center of this village an hour north of London is the Rolls-Royce Enthusiasts' Club and The Sir Henry Royce Memorial Foundation. Together, they are keepers of the Rolls-Royce flame.
BMW, which takes over Rolls-Royce in 2003 when it splits from Volkswagen-owned Bentley, knows the route to Paulerspury well. Members of BMW's Project Rolls-Royce team, including leader Karl-Heinz Kalbfell, have spent days in Paulerspury studying archives, artifacts, old engines, engineering drawings and memorabilia. They interviewed the custodians of the rich Rolls-Royce heritage. BMW even asked the club to suggest some representative owners who participated in focus groups to help the team design a new Rolls-Royce - a Rolls-Royce that must maintain traditional values while appealing to modern tastes.
Kalbfell says the Rolls-Royce team must take the best of the past and 'interpret that in a future-oriented way.'
That is key to BMW's plans. It plans to build 800 to 1,200 cars per year, compared with 400 in 1999. It must sell not only to traditional owners but also to younger buyers, some possibly coming from a new generation of Internet millionaires, Kalbfell said. 'We have to take into consideration the new rich society,' he said.
WILL BMW SELL ROLLS?
A firestorm of media criticism accompanied BMW's recent disposal of Rover in late March after losses of up to $8 billion. That debacle included the stunning sale of Land Rover to Ford Motor Co. Land Rover, after all, was the main prize BMW was after when it bought Rover in 1994.
Critics have questioned whether the Munich automaker has the stomach for any more British misadventures. Some critics believe the secretive Quandt family, which controls BMW, could dictate the sale of Rolls-Royce, leaving BMW to concentrate on its own brand without distraction. Others believe BMW itself will be sold to a larger company such as General Motors or Ford as global consolidation continues.
'If I were an adviser to the Quandt family, I would advise them without a second's hesitation to get rid of Rolls-Royce and just concentrate on BMW,' said Peter Schmidt, analyst with Automotive Industry Data in Warwick, England. 'BMW has to get its own house in order. They have to get back on track. They have to concentrate on profitable growth.'
But BMW swears it is determined to hang onto the prize it won two years ago in famously tangled negotiations with Volkswagen and Vickers PLC. That deal resulted in the agreement to split the Rolls-Royce and Bentley brands between the two German automakers.
Under terms of the agreement, Volkswagen has custody of Rolls-Royce until midnight Dec. 31, 2002, when BMW takes over. Bentley stays with VW, which also owns the Rolls-Royce and Bentley factory in Crewe. Between now and then, BMW has to build a factory, find skilled craftspeople, set up a dealer network and finish development of a car that embodies the brand values of Rolls-Royce.
BMW, RIVALS SEE GROWTH
Like several other luxury carmakers, BMW believes it sees growth in the rarified atmosphere at the top luxury segment. Bentley is on a path to increase volumes from 1,000 cars or so annually to 9,000, with a smaller Bentley in the works and other models planned. Mercedes-Benz will produce the V-12-powered Maybach in 2002 at a price of $250,000 or more. Volkswagen is studying the resurrection of Bugatti.
'There's obviously a market for super luxury cars,' says Gilly Filsner, managing associate in Ludvigsen Associates Ltd., a London automotive consultancy. 'We don't know how big it is because it's never been tested. There are more multi-millionaires now than there have ever been. Between the Internet and stock market prices, you have a lot more very rich people.'
These cars will combine historical brand attributes with some modern, albeit unobtrusive, technology, such as electronic body control.
'Investment in the high-end segment makes the automotive world much richer than before,' says Kalbfell, a 50-year-old career BMW marketing executive. 'The future of brands like Rolls-Royce and Bentley can only be guaranteed when a strong car company with modern capabilities is behind them.'
Says Philip Hall, chief executive of the Royce foundation: 'They (BMW) are doing everything right. They realize it's more than just acquiring another brand name. It's a unique institution. Give BMW full marks for trying to steep themselves in Rolls-Royce history. I'm very optimistic about what BMW will do.'
Those words don't come easily to Hall, who confesses he was 'vehemently horrified' by seeing Vickers sell Rolls-Royce to a foreign company in 1998. Many Rolls-Royce purists found it particularly hard to accept the fact that the company would be German.
PLEASING THE PURISTS
The BMW team has learned that purists such as Hall hold very strong opinions about the company they revere and do not hesitate to share them. Says Hall of the car now in the works: 'It has to be British-designed, British-built, and it has to be the best car in the world.'
Hall is likewise adamant about the importance of having the factory in the proper historical setting.
'About once a minute we tell them it should be in Derby,' says Hall. 'Kalbfell said to me, `You can't afford to be too sentimental (about the location of the factory).' I said: `Being Rolls-Royce, you've got to be. Having it in Derby would convert so many more people.' '
Why Derby? Because Rolls-Royces were made there for 31 years before the factory was moved to Crewe in 1938. Rolls-Royce PLC, the aircraft engine company, also is there.
BMW is not saying where the factory will be, although the list has been narrowed to about five locations in England. But Derby has the inside track for one primary reason - heritage.
Likewise, Hall believes BMW is looking in the right direction for design inspiration for the first BMW-built Rolls-Royce.
'The car they've been focusing on is the Silver Cloud series, although they have been going right back to the Silver Ghost,' says Hall. To many true believers, the Silver Cloud, built from 1955 to 1966, is the last of the real Rolls-Royces. BMW is keeping its Rolls-Royce styling plans closely guarded, but the design for the car was finished earlier this year at a studio in London by a small, international team. Members immersed themselves in the atmosphere of Hyde Park, one of London's poshest areas and a place where Rolls-Royces are common.
BMW's small-team approach to designing the next Rolls mirrors that of Mercedes, which created a Maybach 'project house' in the German town of Sindelfingen. As part of the process of creating Maybach, Mercedes also organized events for upmarket clients ... and their chauffeurs.
While the Maybach will be a modern car, it will feature cues from the 1920s Maybach, then a top end Mercedes-Benz model. The car is named after Wilhelm Maybach, Gottlieb Daimler's fellow auto industry pioneer.
Likewise, BMW is aware it must honor the ideals of company founder Henry Royce. At the Geneva auto show, Kalbfell looked every bit the part of reverent custodian of the marque. In front of him on the table was the 'flying lady' Rolls-Royce mascot, sculpted by artist Charles Sykes.
At the end of an interview, Kalbfell looked meaningfully at a reporter and silently slid a piece of paper across the table.
Upon the paper were printed the following words: 'The quality will remain when the price is forgotten.'
The words were coined by Henry Royce, and remain a company mantra. They serve as a reminder of Rolls-Royce's fascinating origins
Like Daimler and Maybach, Henry Royce was a pioneer in his own right, and like a lot of other engineering geniuses in automotive history - Henry Ford would be one - Sir Henry Royce is not remembered for any single achievement. He was a synthesizer of ideas and innovations. Royce began as an electrical engineer in the pioneering days of electricity. A working industrial capstan made by Royce Ltd. sits in the exhibit area of the house at Paulerspury.
One of Royce's most important contributions in the early days of the automobile was to develop an engine that ran much more smoothly than the huffing, puffing, rasping, smoke-spewing machines of the day. He also abhorred heavy and clumsy components and was a master at combining lightness and strength in his designs. His products were handmade and known for being reliable and enduring.
'It is Henry Royce's first triumph that, starting relatively late, he developed by 1906 a machine which combined the lively performance and stamina of a fine petrol car with the effortless running of a good steamer and the silent flexibility of an electric brougham,' wrote Anthony Bird and Ian Hallows in their book, The Rolls-Royce Motor Car.
For all of his engineering brilliance, Royce didn't have much of a flair for marketing. That's where Charles Stewart Rolls entered the picture. A pioneering motorist and auto racer, Rolls had been selling imported cars around the London area in the early part of the century when he met Royce. Rolls did not live to see the success of the company. In 1910, at age 33, he became the first Englishman to die in an airplane crash. (There's a wooden model plane at Paulerspury made from the wreckage of Rolls' Wright biplane.)
Another early motoring enthusiast who joined the company, Claude Johnson, became known as the 'hyphen between Rolls and Royce.' Johnson had a keen sense of promotion.
'Royce would have made any old thing ... motorbikes, whatever,' says Peter Baines, general secretary of the Enthusiasts' Club. 'It was Johnson who said, `At the end of the day, we are making luxury cars for wealthy people.' '
When Royce wanted to modernize the radiator by making it more aerodynamic, Johnson adamantly refused to let him. The Greek-style radiator, Johnson knew, already had become an integral part of the Rolls-Royce identity.
'WHIZZ' VS. 'WHOOSH'
Those wondering why purists object to the idea of a Rolls-Royce powered by a BMW engine need only visit Paulerspury. It becomes clear that engines are part of the 'core competency' of Rolls-Royce. There are engines displayed all around the main exhibition hall, from Royce's early two-cylinder engines to the Merlin engine that powered Spitfire fighters and Lancaster bombers in World War II.
Royce Foundation chief executive Hall likes to quote a critic of the BMW V-12 powered Rolls-Royce Silver Seraph who said of the car: 'It whizzes rather than whooshes.'
Kalbfell won't say what kind of powerplant the new Rolls-Royce will have except to say it will be a Rolls-Royce engine with Rolls-Royce parts, just like the rest of the car. It will not be a retuned BMW.
But whatever that engine is, you can bet it will whoosh. If it does not, Kalbfell, or whoever ends up running Rolls-Royce, can expect a phone call from the old house in Paulerspury.