Rolls-Royce drives on in plan to open more outlets

Rolls-Royce has little concern that the global economic crisis will hurt the pockets of its growing ultra-wealthy customer base outside Europe.

The luxury car brand owned by BMW plans to increase outlets by 14 per cent within five years, it said yesterday.

The car maker, based in Britain, targets expanding the number of dealers to 120 from 105 to reach millionaires in markets such as Chile, Thailand and Vietnam.

Unfazed by Europe's debt crisis, Rolls-Royce expects the updated version of its US$380,000 (Dh1.4 million) Phantom saloon will help it reach a second consecutive sales record this year after delivering 3,538 cars last year.

"I am very confident that we'll sell at least one more this year," said Torsten Mueller-Oetvoes, the chief executive of Rolls-Royce Motor Cars.

Rolls-Royce, which also makes the $246,500 Ghost and competes with Volkswagen's Bentley, is counting on growing wealth in Asia and South America to fuel demand as the debt crisis dents sentiment among Europe's rich.

The number of households with more than $5m in assets is set to grow by 3 to 5 per cent annually in the coming years, creating new potential customers for the brand, Mr Mueller-Oetvoes said.

"Of course, we feel that the mood isn't the best in certain markets, but we're able to compensate" with growth in places such as Russia, the Middle East and China, he said. "Our goal is to grow sustainably and not chase volume. Rolls-Royce will remain exceptional."

The brand's deliveries dropped 14 per cent to 726 cars in the third quarter, burdened by the changeover to the Phantom Series II in September. Through the first nine months of this year, sales were down 4.7 per cent to 2,326 vehicles.

After updating the Phantom this year, Rolls-Royce plans to extend its lineup with a new model variant next year to broaden the brand's appeal, Mr Mueller-Oetvoes said, declining to provide details.

"If you look at Rolls-Royce and Bentley, they continue to add variants that will bring in new customers, and China should help support the segment," even if developed markets slump, said George Galliers, an analyst with Credit Suisse in London.

To target the growing numbers of Chinese buyers, Rolls-Royce created a $1.2m Year of the Dragon Phantom model for China this year. The special edition features a gold dragon hand-painted on the side of each wheelbase, the mythical creature embroidered on headrests, and hand-stitched cushions for rear passengers. The version was sold out within two months.

At the other end of the market, Hyundai, South Korea's biggest car maker, plans to increase production in China by 40 per cent in three years and add higher-end models as it seeks to gain market share in the world's largest market.

Beijing Hyundai Motor, its passenger-car venture with Beijing Automotive Group, will boost production to 1.4 million units by 2015 and double the ratio of mid- to high-end products to more than 50 per cent during the period, the company said yesterday.

Passenger-vehicle sales in the nation will expand by an average 8 per cent a year to reach 22 million units in 2020, driven by demand for sport-utility vehicles and rising incomes in smaller cities, according to McKinsey & Co.

The maker of the Elantra saloon and Santa Fe sport-utility vehicle increased China sales 11 per cent to 676,746 units in the first 10 months of this year, according to the China Association of Automobile Manufacturers, putting it on pace to exceed the 739,800 units sold last year.

The car maker, which currently operates three factories in the country with a total capacity of 1 million units, produced its 4-millionth car on Monday, it said.

In Japan, Takanobu Ito, the Honda chief executive, wants to boost the car maker's exports from the United States to counterbalance the effects of the strong yen, he said on Monday.

"Our US plants export just 6 to 7 per cent of production. But they should be able to do more than that," Mr Ito told The Wall Street Journal.

"If there's enough demand from other regions for larger vehicles, then closer to 20 per cent is conceivable," he added.

Last year, Honda exported 55,000 vehicles from North America.

* compiled from Bloomberg News and AFP