Rolls-Royce sales bust speed limits with 49% jump

ROLLS-Royce Motor Cars had such an incredible 2021 that chief executive Torsten Muller-Otvos can hardly believe it. Sales skyrocketed 49 per cent to hit a record 5,586 cars around the world, with deliveries of the venerable luxury cars rising in every market.

"I knew in the beginning of last year that we would see a very good year for us, but I was quite surprised to see it this good. And to see it developing in all markets on similar levels, it's fantastic," he tells The Business Times over Zoom. "I mean, growth in terms of plus 49 per cent is unbelievable."

While global sales boomed, they boomed even harder for the brand in Singapore. Figures from the Land Transport Authority showed that registrations hit an all-time high of 90 cars last year, 67 per cent higher than in 2020.

"I was amazed to see what happened in Singapore last year. Our business went really stellar. Karsono Kwee and his team did a fantastic job for us," he says, referring to the entrepreneur behind the brand's authorised dealer here.

Other luxury marques also saw their sales hit all-time highs. Bentley delivered 14,659 cars (an increase of 31 per cent), Lamborghini pushed 8,405 cars out the door (up 13 per cent) and Porsche sold 301,915 cars (up 11 per cent).

Rolls-Royce's parent BMW Group saw its main BMW brand sell 2,213,795 units, 9.1 per cent more than in 2021 and a record number.

"I think this is something you see in the entire luxury goods industry currently," Muller-Otvos says. "It's not just about cars, it's watches, it's private jets, it's yachts, it's luxury real estate. Everything is booming."

Muller-Otvos credits some of that to the changing nature of wealth creation and how it's creating a rapidly growing class of newly-minted tycoons. "We have seen quite a remarkable new trend in what kind of businesses our people are in. The way to get affluent today is far different from how it used to be 10 or 15 years ago, when you needed to invest into assets, machinery, real estate or whatever," he muses. "Now you're in a position to also generate money out of your brain."

Evolving with its customers

Muller-Otvos says new product offerings have helped Rolls-Royce evolve with its customers who, at 43-years-old on average, are now typically much younger than when he took over the corner office more than 12 years ago.

The Cullinan, a plush Sport Utility Vehicle, appeals to the more adventurous and family-minded buyer, and the brand's Black Badge label gives its cars the sort of darker, edgier looks that cater to the desire for a more sporty, less ostentatious expression of bling. Muller-Otvos says the Bespoke business, which lets clients tailor their cars extensively, is also at record levels.

While Rolls' current business model is going like gangbusters, Muller-Otvos is driving the 117 year-old brand into unchartered but frothy waters. Last year, he announced that Rolls-Royce will start production of its first pure electric car, the Spectre, in 2023. Customers have already been invited to view early examples at the brand's home in Goodwood, just outside of Sussex, and interest in electric cars is so strong overall that Muller-Otvos is expecting it to be a hit.

"Our clients very often own more than one Rolls-Royce, and for that reason, it is kind of a must-have. I mean, Spectre is the first electrified super luxury car on Earth," he tells BT. "I'm pretty sure that many of our clients are saying, 'I want one!'"

He also points out that Rolls customers tend to own several cars, and probably already have an electric car in their garage. The silence and smooth, effortless acceleration that comes with electric motors gel well with what the brand traditionally offers.

"Nearly all of our clients worldwide agree that electrification fits perfectly with the brand," Muller-Otvos says.

Rolls-Royce started work on the Spectre half a decade ago, long before the ongoing boom in battery-powered cars began.

Muller-Otvos says the company moved quickly because it is comfortable disrupting itself. "Nothing is a given in the luxury goods sector. You need to be inventive and you need to think about what might attract clients in the future," he says.

Another banner year

Meanwhile, 2022 is shaping up to be another banner year. Rolls-Royce's order books are already full up to October, which is roughly where Muller-Otvos wants the demand and supply balance to be. He says the waiting time for a Rolls-Royce should not exceed one year.

Muller-Otvos says his only worry is that larger forces could bring the party to an end. "What I'm watching closely is the world economy. We have learnt from the past that we are not immune from recession," he says.

"That's the luxury goods business and we are used to it."

He says having a flexible production system that would allow the company to scale down accordingly is the best way to prepare for an economic slowdown.

On the flipside, the company is still only running at near-maximum capacity, the implication of which is that its sales could hit another all-time high. As far as Rolls-Royce is concerned, there's still room for more to join its corner of the luxury car party.