Since taking over Rolls-Royce in March of 2010, CEO Torsten Mueller-Oetvoes has tried to focus the brand around innovation and growth.
Rolls-Royce, owned by BMW, expects to break last year's global sales record of 2,711 cars; and China may soon overtake the United States as its top market.
Mueller-Oetvoes, 50, told Harald Hamprecht, Automotive News Europe's editor-in-chief, that he is "optimistic" about the prospects for the superluxury segment. He said so far his company has not been affected by the slowdown.
The ultrapremium segment is likely to weather this downturn better than it did the previous crisis, Mueller-Oetvoes said. Along with factory expansion, Rolls-Royce may boost its global dealerships to 100 from the current 85 and add a coupe version of its best-selling Ghost model.
The interview was conducted in German and translated into English.
Q: What has been your greatest challenge since you took over as CEO of Rolls-Royce 18 months ago?
A: The brand has been well-run, so I didn't feel the need for radical change. Last year, we boosted sales by 170 percent, and a trend like that doesn't happen automatically. But we have been in the market for more than 100 years, so perhaps my biggest challenge has been in presenting Rolls-Royce in a contemporary way. Marketing initiatives, such as iPad apps and collaborations with contemporary icons, have helped. So has the launch of Ghost, which is reaching a whole new target group of younger, modern customers.
Do you hope to find new customers with social media?
Not necessarily. But our presence in social media ensures we talk to a wider audience through a contemporary communications platform.
What does Rolls-Royce stand for?
Like no other brand, Rolls-Royce stands for exclusivity, quality and individual style. In essence it stands for the best automobiles in the world and the pinnacle of automotive aspiration.
Is Bentley a growing competitor for you?
Bentley largely occupies another price segment. The Mulsanne is the only overlap with our portfolio. But our customers don't see our cars as competition. They buy models of both brands. Their garages are like clothes closets, equipped for all of life's occasions. Rolls-Royce competes with other luxury goods such as real estate, yachts, fine art and jewelry.
Do you plan to expand your portfolio?
We recently presented the extended-wheelbase version of the Ghost at the Frankfurt auto show to European audiences for the first time. I think Ghost is a model that lends itself to further derivatives in time.
Such as a Ghost coupe?
We have many ideas but are in no hurry. It might be a coupe; it might be a convertible or something else entirely. In general, however, I would say we have no plans to sell a car positioned below the Ghost's current price. And I don't think the sale of cars for more than 1 million euros [about $1.4 million] will come under consideration.
How will your sales develop?
The brand will grow continually but sustainably. Last year, we sold 2,711 vehicles. We expect 2011 to be another record year. But profitability is key, and we are a profitable company.
What kind of sales do you envision long term?
We will continue to grow steadily, but ours is not a volume strategy. For example, we have no long-term plans for sales in five figures.
How do you assess the condition of your factory?
Our home in Goodwood, England, is 10 years old, but it is very much an exemplar of modernity and sustainability. We have expanded manufacturing with the Ghost's introduction but continue to improve efficiency and cut waste. We recently announced a $15 million investment to accommodate increased worldwide demand.
What do you see as the full potential for the Rolls-Royce customer base?
Currently, I see the potential for around 3,500 automobiles above 200,000 euros [about $280,000] in the superluxury segment worldwide. I think it is proving to be more robust than other segments in the auto industry.
We're dealing with people who are unusually prosperous and never need to ask, "Can I still afford this or not?" The number of superrich in the world is growing. There are currently about 90,000 ultrahigh-net-worth individuals, but in 10 years we expect this to grow to 125,000. That fact alone makes me optimistic about our prospects.
You don't see any indication of a downturn?
No, our order books are full, and we are running a three-shift operation. The Rolls-Royce brand holds its value. We represent a valuable long-term asset, particularly in times of uncertain investment opportunities. It's a fact that 70 percent of the Rolls-Royces ever built are still on the road.
How is your dealer network positioned?
We work with 84 partners worldwide and opened five new locations in 2011. Now we are carefully exploring further opportunities such as in America where we still need to make inroads in population hubs such as San Francisco. We're planning other facilities for China and Southeast Asia, and Berlin and Hamburg are potential locations for new dealers in Europe.
How much must the dealer be prepared to spend on a new Rolls-Royce operation?
The investment in a showroom is up to $350,000 -- without the real estate, naturally.
Why aren't you offering diesels?
Partly because, from a global standpoint, diesels are only successful in Europe. Most importantly though, our customers are very clear: However refined, a diesel could never deliver a true Rolls-Royce experience: effortless performance and, of course, silence.
How many people work for Rolls-Royce?
Rolls-Royce employs about 1,000 people worldwide -- including 850 highly skilled employees in Goodwood and 150 in our regional offices. 150 people in our staff in Goodwood are temporary workers.
What are your largest markets?
The U.S. is our largest market, followed by China, England, Germany, the Middle East and Russia.
Don't you fear that your 12-cylinder vehicles will soon be ostracized from a societal and ecological standpoint?
I don't think so. Our engines are highly efficient and our 102EX electric Phantom project is the first step in exploring the potential for alternative powertrains in the long-term. But at this point there is no demand from the customer. Few clients who have driven 102EX are prepared to charge a battery for eight hours for a range of just 200km.