Rolls-Royce Motor Cars Americas is seeing the benefit of adding a new nameplate and segment to the storied brand in the Cullinan SUV.
Globally through the first quarter, Rolls-Royce sold 1,206 vehicles, an increase of 49 percent from the year-earlier period, according to parent BMW Group. Rolls-Royce sold 4,107 vehicles globally in 2018 and is targeting another sales record this year.
The U.S. is Rolls-Royce's largest market, with sales accounting for roughly 30 percent of the global total.
Since September, Martin Fritsches has been CEO of the region that includes the U.S., Canada, Mexico, Brazil and Chile. The region has 44 dealerships, of which 37 are in the U.S.
The German-Argentine executive joined Rolls-Royce in 2018 as vice president of sales for the Americas region. Fritsches has been with BMW Group since 1999 and has held several positions in sales, marketing and dealer development across the group's other brands.
Fritsches, 42, spoke with Staff Reporter Jack Walsworth. Here are edited excerpts.
Q: How was the first quarter for Rolls-Royce in North America? What's the outlook for the rest of the year?
A: Overall the first quarter was really good. Our business is not necessarily purely about volumes and figures. We sell more than just four wheels.
We sell experiences and lifestyles, but nevertheless, if it comes to volume, clearly our business has been growing consistently year on year, more than 50 percent. That's also highly impacted due to what we call the Cullinan Effect. But nevertheless, I would say overall our business is stronger than ever before. We see it not only in terms of figures, but in terms of brand image and the engagement of our dealers.
How do Rolls-Royce dealers feel this year, especially with adding an SUV?
I've been working for the BMW Group for almost 20 years. I've gone to several product launches for all the brands — for BMW, Mini, even for motorcycles — and I have to say that we've done a great job over the last year with the launching phase of Cullinan, which of course is the key product for the American market.
The engagement with the dealer network has been very strong, and with that, we've also seen a higher commitment. It also has helped us attract a new customer and widen our business.
What challenges are facing Rolls-Royce in North America?
The issue of the brand itself. I'm still very much convinced that the potential here to further increase our business is huge. And not only now that we've added the fifth member into the family, the Cullinan, to finally have an SUV and the first all-wheel-drive car. But for a brand, you see the number of ultra-high-net-worth individuals really increasing dramatically, particularly in the U.S. They are clearly our potential customers. Where we really have a challenge, but clearly a unique opportunity, is to somehow work more on brand image, brand awareness and attract those potential customers.
Does adding an SUV open new markets in the U.S. for Rolls-Royce?
That's very true. That was actually one of the reasons why the group decided to come up with the product. But yes, it does. I would say the Midwestern region, and states more in the North which experience more winter, and of course the Canadian market.
That has been a radical change. It's the equation of one plus one equals more than two. Not only do we have an additional product, and an additional sale, but our brand awareness is totally different. The dealers often see it with a totally different perspective and business opportunity.
How does Rolls-Royce plan to develop more presence in those new regions? Does that mean adding dealers?
When it comes to image, you can start exploring new regions through events. I would say that the best example is in Aspen, Colo. We had a large presence there this year. With the product, with awd, all of a sudden we can explore those new marketing opportunities, raise the attention and place the brand in a totally different part of society.
When it comes to new dealers, the group always first understands the market. If the market is growing, then we follow the demand. But even though our sales are increasing, there hasn't been a need to increase our dealer network.
But, speaking of our presence in Aspen, we haven't had a dealer in Denver for the past year. That would be one of maybe two or three locations where we're going to have a new dealer in the coming months.
But besides that, I would say that we're pretty much covered for our market and customer needs.
Is the Cullinan taking away from the rest of the lineup?
That's natural, even from a dealer perspective. But the focus is different. It's human to say, "I want the new things. I'll concentrate on the new product."
From a purely sales perspective, it's easier to sell. But overall our performance has been pretty much stable. And because of the production side being on full capacity, there is not much opportunity to get more products from the other model ranges.
The other products are also continuing to develop — particularly Dawn. We're still the largest market for Dawn by far. And with the demand, we're basically already sold out for the next five to six months. Dealers are now ordering Dawns for October. So the demand for that product is great.
There's also a shift to making the brand younger and slightly more American through our Black Badge [performance and engineering subbrand] product.
Before the Cullinan went on sale, the key new product was the redesigned Phantom. How has that rollout gone?
Phantom is doing very well. Even in the Rolls-Royce world, when you talk about the pinnacle of everything, Phantom is still on top. It requires a very one-to-one sales approach.
As sales grow, how does Rolls-Royce maintain the exclusivity?
You're talking, after all, about 1,800 to 2,000 cars a year at the most. Compared to other brands, we are a very boutique car manufacturer. We're fully located in Goodwood in the U.K., and we sell experiences and craftsmanship.
Even if we now have a new product and the volumes increase, our dealer network will stay stable.
We have a clear, strong marketing strategy established with a heavy focus on experiential marketing. There is potential to still attract customers without jeopardizing any minor thing to exclusivity.
The level of bespoke and uniqueness of our cars is so high that even if we would sell 20 to 30 percent more, it will still be a Rolls-Royce, a very exclusive product and lifestyle in the American market. I don't see that as a risk at all.
This year, you said the Cullinan order bank went into July. Has that trend continued?
That continues. I actually just came back from Goodwood and it's still the same. It actually won't change till the year ends. It's a good place to be, honestly. As I said before, it would be great to have more, but still it's also a good position to be overall.
Are customers OK with waiting?
Nobody likes to wait, and you can imagine for the profile of our customers, potentially less so. But it is what it is.
On the other hand, it's a very unique product. It's almost a piece of art. Many of them are highly bespoke, so it's a different purchase as well.
Now that Rolls-Royce has an SUV, what other product you would like to have?
We are really very much covered. The product that had been missing in the past few years was the SUV. Eventually in the future, there can be some evolutions of one or the other chassis.
But basically, when it comes to the model lineup, it is what we have now.