Rolls-Royce chief: ‘Our targets are always based on profitability, not volumes’

The National's Frank Kane talks to Torsten Muller-Otvos of Rolls-Royce about the British luxury car maker's turnaround after the BMW takeover in 1998.

Torsten Muller-Otvos, the chief executive of Rolls-Royce, is confident of the car maker finishing the year strong. Courtesy Rolls-Royce
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Torsten Muller-Otvos was a lifer with BMW until he got the top job at Rolls-Royce in 2010. The British luxury car maker had been given a new lease of life when it was taken over by the German motor giant in 1998, and has since cem­ented its reputation as the leading motor marque in the world. On a recent trip to its booming UAE business, he talked about where the brand goes from here.

What is the outlook for Rolls-Royce’s global sales this year, given the difficult economic and financial conditions?

We do not publish sales forecasts, but what we can say is that we continue to plan for long-term sustainable growth, and we are confident that 2016 will be a strong year. We have just announced the best ever third-quarter sales performance in the history of the company. Traditionally, for the ultra-luxury sector, the fourth quarter is the strongest and we are only midway through this quarter, so we will wait and see.

What is the regional outlook? Some markets have been difficult, given the low oil price. How do you see this going forward?

We always expected this year to be a little more challenging in the Middle East because of the oil prices and stock markets. These fluctuations do not significantly affect our customers’ wealth, but they can affect their sentiment. This is not unusual and it is normal for markets to go up and down sometimes. I have to make it very clear here that it is a very different situation for Rolls-Royce than for other car manufacturers. We are not mass luxury, we never chase volume, and our customers do not want to see many Rolls-Royces on the road because our brand needs to remain rare and exclusive. Our targets are always based on profitability, not volumes. We have sold some exceptional bespoke cars in the region in the past couple of years, and our customers are willing to pay more in order to have unique, personally commissioned vehicles.

Demand in the UAE has remained strong, especially Abu Dhabi. Why do you think the UAE is so attracted to Rolls?

Rolls-Royce Motor Cars is a brand that represents the absolute pinnacle of luxury. The UAE is a country that understands and appreciates luxury, with a large number of ultra-high net worth residents. That is why the appeal is so strong – the country and the brand are perfectly matched. The UAE is the second-largest country for us in terms of sales, after the USA. Abu Dhabi Motors is our best-selling dealership globally and AGMC (Dubai) is also posi­tioned in the top five, so the UAE is indeed a very important market for us. Bespoke is a huge factor, as no other brand can offer the same unique commissioning service, and our customers in the UAE really appreciate it. Every Rolls-Royce sold in the UAE is bespoke.

What is the best-selling model globally, and in the region?

Sales are driven by the enduring success of the Wraith and Ghost family motor cars in all regions, while Phantom remains the company’s pinnacle product globally, reaffirming its status as the world’s most desirable super-luxury good. Dawn has been received fantastically well.

Tell me more about Dawn. There might be problems with a convertible car during some seasons in the Gulf.

We have had record pre-orders for Dawn regionally and internationally this year, and started delivering cars to customers in March. As expected, the biggest market for Dawn has been North America, but we have a well-balanced sales portfolio so other regions are also performing well with this car. We consider the Rolls-Royce Dawn to be two cars in one. It is its own car, designed from the ground up, resulting in a beautiful silhouette whether the hood is up or down. It is the start of a new age of open-top, super-luxury motoring. It’s a true four-seater and we believe it is quite simply the sexiest Rolls-Royce ever made. Our customers usually own more than one car, so the hot seasons in the Gulf aren’t an issue for them, as proven by the popularity of Dawn in this region.

What is the schedule for the Cullinan? How do you think it will be received in the Gulf?

We announced Project Cullinan to build a new Rolls-Royce model that will cross all terrain with the motto “Effortless … Everywhere”. I would expect us to announce the availability date in 2018. It will be a seminal mom­ent in Rolls’ 113-year history. This car will embody all the values and capabilities that drove Mr Rolls and Mr Royce to secure the car’s reputation, early last century, by taking top honours in rigorous overland adventures such as the Scottish Reliability Trials, the London to Edinburgh event and the Alpine Trials. Rolls-Royces have conveyed pioneers and adventurers, like Lawrence of Arabia, across the vastness of unexplored deserts and in other parts of the world. Rolls-Royces carried their owners over challenging terrain with absolute reliability and comfort. Cullinan will continue that tradition.

Are there any other new models/initiatives you can discuss?

We are delighted that a new Phantom is on the way – a contemporary and beautiful Phantom enhanced with cutting-edge technologies and design innovations. Any new Phantom is a historic and important moment and we are working hard on perfecting the Phantom 8. Rolls reset the benchmark for luxury motor cars in 2003 when it launched Phantom 7, a motor that has remained the pinnacle of pure luxury for the past 13 years.

Who are the natural rivals of Rolls-Royce? Is Bentley still the main enemy?

Our timeless, ultra-luxury vehicles combine technological and engineering excellence with the finest British craftsmanship; combined with our tailored bespoke offering available to our customers, we believe there is no direct competition from any other automotive manufacturer. Instead, our competition comes from such customer purchases as a private jet, a yacht, fine art or property. We operate in the above €200,000-plus (Dh793,351) net price point. As such we do not directly compete with Bentley. Bentley has only one offering in our segment, the Mulsanne. Ghost currently outsells this model by about three to one globally. Our cars are an exceptional sight on the world’s roads and our customers like it that way. We have no desire to become a mass luxury brand with five-figure annual sales volumes. Our customers, likewise, have no interest in seeing Rolls-Royces on every street corner and in every supermarket car park.

What brings you to Dubai this time?

We are very proud that Dubai, through our fantastic partners AGMC, is the location for the world’s first Rolls-Royce Boutique, a highly progressive new concept in luxury. True luxury houses like Rolls-Royce must constantly strive to innovate and inspire, so we believe that this extraordinary space will become a social hot spot that perfectly encapsulates the spirit of Rolls-Royce’s Centre of Excellence in Goodwood, England.

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