Q&A: Rolls-Royce CEO on the luxury business, the global economy, and building a $25M car
MONTEREY, Calif. —When you think of Monterey Car Week and the Pebble Beach Concours, Rolls-Royce Motorcars is a name that almost automatically comes to mind. The 120-year-old British automaker is synonymous with ultra luxury and sophistication.
Rolls-Royce (BMWYY) did make its presence felt at Monterey last week, where a massive amount of the company's clientele appear every year to see new cars, meet other car aficionados, and, as the Europeans tend to say, to enjoy life.
It was also a chance for me to catch up with Rolls-Royce's veteran CEO, Torsten Müller-Ötvös, whose vision over the past 13 years has brought Rolls-Royce back to its position of prominence.
Suffice it to say Müller-Ötvös and Rolls-Royce are crushing it at the top of the market, coming off another record-setting year. We caught up with him during the launch of a very special Coachbuild car, the Rolls-Royce La Rose Noire Droptail, in Pebble Beach, California.
Edited excerpts of the interview:
Q: You've been around Rolls-Royce for many years now, and I always tend to ask you these questions whenever I see you because I want get your take on the luxury consumer. Rolls-Royce can kind of be seen as a leading indicator with their spending behavior — what are you seeing these days from them?
A: What we see currently is that the world is slightly different than it used to be a year ago, not a big surprise. And I would also say that these very exuberant demand patterns for luxury goods that we have all seen right after the pandemic is sort of coming to an end and is normalizing.
So I would say that the market a year ago was pretty overheated. It has come back now to a kind of normal swing and we see that worldwide. That is not only true here for the United States, but also for Europe, for Asia. You are seeing that in China; there [are] worries around the economic development of the country, and that is troubling to some of our clients.
From our clients' point of view it's never a matter of, “Oh, I [no] longer have any money for buying myself a brand new Rolls-Royce,” it's more about the sentiment, and I always said that even we at Rolls-Royce Motorcars are not immune against any recessionary tendencies.
So it's all about personal sentiment when you're going to buy Rolls-Royce, and if that is in any way distracted by economic downturn, then we see that. But on the other side, you normally never see the whole world tanking; you see some markets going up, others going down, and due to the fact that we are so well distributed worldwide, we can balance these kinds of developments out.
Q: We're here of course at Monterey Car Week where Rolls-Royce is debuting a special limited edition car, the Rose Noir Droptail, a one-off commission. One of potentially four commissions that Rolls-Royce is making. What is the story behind this car?
We are looking at a "Coachbuild" automobile [Coachbuild is Rolls-Royce's service to select clients where they can build an "entirely original" vehicle]. Coachbuild is what I would describe the absolute pinnacle because it's by invitation only. We are designing exactly what [the customers] wanted to have.
The car is a celebration for a [customer's] anniversary, the clients are married now for 30 years as of this week, and we [are] handing over the finished project here. And for this project it is all in the details, a very romantic story, and you see these details in the rose in itself. The [Black Baccara] rose, for instance, is a rose the lady received as a present from her husband many years ago, and that symbol of love, that rose, is reflected in the car.
Q: Your team says the Rose Noire Droptail contains over 1000 pieces of wood interlocked together like a puzzle in the cabin, custom coachwork in the exterior and interior, a bespoke platform, and a V-12 engine, of course for Rolls-Royce. We're also hearing that this car might cost around $25 million. Are we in the ballpark there?
A: I would say this is quite a good judgment — this is the ballpark.
It took us nearly five years to engineer this car together with the client. The client spends quite a lot of time with us, because the client is signing off every single development phase. They were with us when we shaped the clay for the car, they were even allowed to shape it themselves ... And all that ... led to, I must say, one of the most marvelous customer journeys for us I've ever experienced in my entire time here at Rolls-Royce Motorcars.
Q: Pebble Beach and Monterey Car Week is a big opportunity for Rolls-Royce to talk to clients, and in a lot of ways sell more cars. But I was speaking to one of your biggest dealers, Tom O'Gara of O'Gara Coach, and he was telling me for the luxury consumer, he doesn't care about how many cars he sells. What he sells is experiences, and that's what keeps customers coming back for more.
A: I mean, it's all about experience. I would say even if we didn't cater to that years ago — with Rolls-Royce Bespoke and our investment into Goodwood [Rolls-Royce's factory], investment into our private offices [where clients can order bespoke cars] ... interacting with clients, inviting them to what I would call stunning events and celebrating with them together life and the luxury life — we wouldn't be selling cars anymore because it's not a car, it's a luxury good.
Luxury goods mean that you also need to offer experience. I think what you said is spot-on, that is exactly what we cater for, and nobody is buying "something off the shelf" at Rolls-Royce. If you buy a Rolls Royce, you want to do something truly special.
So our saying is, "We are delivering the canvas, and the client draws his masterpiece together with our designers."
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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