Rolls-Royce hopes vision of the future will take minds off the present

The luxury car maker Rolls-Royce has unveiled what it believes will be the face of high-end motoring in the future – and what it hopes will divert attention from negative associations with its troubled namesake jet and marine engine maker. At London’s Roundhouse this week, the Rolls-Royce Vision Next 100 was presented. Codenamed 103EX, it […]

The luxury car maker Rolls-Royce has unveiled what it believes will be the face of high-end motoring in the future – and what it hopes will divert attention from negative associations with its troubled namesake jet and marine engine maker.

At London’s Roundhouse this week, the Rolls-Royce Vision Next 100 was presented. Codenamed 103EX, it is a radical departure from the usual featureless offerings from other firms looking at personal transport options to come, such as Google’s toy-like driverless module.

The Vision Next 100 “presents an intriguing and aesthetically dynamic vision of the future of luxury mobility – a completely personal, effortless and autonomous Rolls-Royce experience”, the company says.

“Today, Rolls-Royce … has defined the future of luxury mobility. The Rolls-Royce Vision Next 100 boldly points to a bright future for our marque …” said Torsten Müller-Ötvös, the chief executive, Rolls-Royce Motor Cars.

That will come as good news to the company, which has become increasingly concerned about the negative associations with the entirely separate aerospace engineering firm Rolls-Royce.

Mr Müller-Ötvös has complained that the crisis at the jet engine maker is damaging the image of his company’s luxury cars.

Public confusion over the relationship between the two companies – which have been separate businesses since the mid-1970s – is causing “contagion”, Mr Müller-Ötvös has said.

He raised fears that Rolls-Royce car owners, seeking to signal their success, might baulk at the brand being mistakenly associated with problems at Britain’s most famous engineering company.

“We know how famous the brand is, and as much as we have done to make clear that they are separate, for many people it is hard to see the difference. When people read about turmoil at Rolls-Royce in a newspaper it causes concern,” Mr Müller-Ötvös said.

Rolls-Royce Motor Cars is owned by BMW, while Rolls-Royce Plc is a separate listed company and a member of the FTSE 100.

In May, Britain’s Serious Fraud Office (SFO) widened an investigation into the engine maker to examine allegations of suspected bribery in Nigeria. The company has also issued a raft of profit warnings.

In February, the engineer cut its final dividend for the first time in almost a quarter of a century blaming “near-term pressure on cash flow”.

Its final dividend will be halved to just to 7.1 pence per share as underlying profit before tax falls 12 per cent to £1.4bn. That was the first dividend cut since 1992.

Its marine division fared worst, with annual profit plummeting by 94 per cent.

Rolls-Royce, the world’s second-largest maker of aircraft engines, said in 2013 the SFO had launched a formal investigation into concerns about possible bribery and corruption in China and Indonesia.

The Financial Times recently reported this had now spread to examine Rolls-Royce’s former energy operations in Nigeria.

“We are co-operating with the authorities,” a Rolls-Royce spokesman said. “We do not comment on the subject of ongoing investigations nor on the countries in which those investigations are being conducted.

“We have made it clear that Rolls-Royce will not tolerate business misconduct of any kind.”

Still, the two companies are in regular contact, Mr Müller-Ötvös said, adding that Sir Ralph Robins, the former chairman of Rolls-Royce Plc, is now a member of the board of Rolls-Royce Motor Cars.

When the aircraft and marine engine-maker first hit problems, Rolls-Royce Motor Cars issued a press release spelling out the difference between the two. But deepening troubles at the listed company have increased concerns.

The risk to Rolls-Royce Motor Cars is high, according to Robert Haigh, director of Brand Finance, which analyses the value of brands. “Knowing that your car bears the same name as the company that manufactured [Second World War fighter plane] Spitfire engines is undoubtedly appealing,” he told the British newspaper The Telegraph.

“The flipside is that now that company is facing tumbling profits, a plunging price fall and thousands of job losses, the association is not so positive. For Rolls-Royce cars’ status-conscious owners, this matters.”

Rolls-Royce Plc declined to comment.

The car maker, meanwhile, has had a better time of things, although a slump in sales in China last year ended five years of growth for the firm.

In the Middle East, the company put in a much better performance, where sales rose 4 per cent in 2015, with the region continuing to be the brand’s second-largest market worldwide.

Sales in the Middle East represented around a quarter of its worldwide volumes, the car maker said.

Abu Dhabi remained the best-selling dealership for Rolls-Royce Motor Cars for the third consecutive year, with four Middle East dealerships ranking among the top five globally.

Other best performing dealerships for Rolls Royce were Mohamed Yousuf Naghi Motors in Saudi Arabia, AGMC in Dubai and Rolls-Royce Motor Cars Doha in Qatar. Sales in Oman and Kuwait also grew 11 per cent and 6 per cent, respectively in 2015.

The Middle East continued to lead in bespoke commissioning – the ability to personalise almost every aspect of the car. Rolls Royce said that it remained a “principal and growing attraction” for its customers in the region as they commissioned bespoke elements for their vehicles in record numbers last year.

“We are proud to achieve such vibrant success in what has been an uncertain environment at times,” said the regional director of Rolls-Royce Motor Cars in Middle East, Africa, Central Asia and South Americas Brett Soso.

“Our dominance in the ultra-luxury segment is testament both to the resilience of our customers as entrepreneurs and wealth generators in the economy, and to the expertise of our dealer partners in each market who continue to invest in the brand to take it to new levels of success.”

“The Middle East region hosts four of the world’s most successful dealerships, the world’s biggest Rolls-Royce showroom in Abu Dhabi, the brand’s most advanced Aftersales Centre in Dubai, and has the highest bespoke content globally.

“We remain confident in the growth and potential of the region and look forward to adding further benchmarks in the coming year,” Mr Soso said.

Overall, though, the slowing Chinese economy and tough new anti-bribery laws led to a 54 per cent year-on-year drop in sales in the country in 2015.

However, although it suffered a 6.8 per cent fall in the number of cars it delivered worldwide last year, the 3,785 vehicles sold in 2015 was still the second-best performance in the brand’s 112-year history.

Rolls-Royce manufacturers the Wraith, Ghost and Phantom, its top-of-the-range model. It sells more cars worth over £150,000 (Dh813,999) than any other manufacturer, and last year launched the Dawn, a convertible based on the Wraith. It will be available to customers later this year.

Mr Müller-Ötvös will be hoping the unveiling of the Vision Next 100 will go some way to offsetting any unwanted – and unjustified – fallout from the struggles at its namesake.

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Source: Business

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