How have your used car prices changed?
They are up by 20 percent to 50 percent depending on the model and market. Prices are reaching their peak point. Customers who don't want to wait, as they seek instant gratification, are turning to our Provenance Rolls-Royce [the company's certified used car program]. This is a great business condition for a luxury brand president.
Is it true that Rolls-Royce has the youngest average age of owners within the BMW Group, and this is mainly due to Asia?
No, that's true globally. Overall, the average age of a Rolls-Royce owner is about 43 years old. Mini is the closest in the BMW Group at about 47. This is really incredible. The reason for that is ultra-high net worth individuals are getting younger and younger each year. We foresaw this trend 10 years ago after talking with private banks about those individuals. That forecast proved right.
What was the average age of owners when you took over as Rolls-Royce CEO in April 2010?
It was 56. Since then, it had decreased every year. To put this into perspective, to have an average of 43 means that for every 60-year-old buyer we get we need somebody who is 20. We have met many of them. They are often young people with great business ideas who have made a lot of money and buy a Rolls-Royce.
With so many younger buyers, will you add a less expensive model to lower the entry point into the brand?
As long as I'm in this position, that will not happen. There is no reason to go into lower segments. We start now at 250,000 euros [excluding sales tax]. That is perfect for us. Also, our customers would hate us if we went downmarket. That's the last thing they want to see. That's why you don't hear me talking about sales numbers or making projections on where we might be in a couple of years. I never do that. Have you ever heard how many Birkin bags that Hermes sells? Probably not. That's exactly how you need to operate in the luxury segment. We are in a rare biosphere. Nobody needs us to go from A to B. Nobody!
How much do your customers typically spend to personalize their cars?
On average it's about 70,000 to 80,000 euros. When it comes to the bespoke commissioning of ideas, we see cars easily doubling their initial price. That is quite substantial because it's not driven marketing. The customer's imagination is our limit not the other way around. So, the aim is to fulfill every customer's dream as long as it is safe and technically viable. We are selling several Phantoms at prices that exceed 1 million euros.
Potentially taking those prices one step further is the re-establishment of your so-called Coachbuild department for special projects such as the Boat Tail. Could you share its starting price?
We haven't revealed the price, but there has been some speculation that it could be the most expensive car on earth. We will make just three units. Each will be very different from the other. We handpicked the three customers from Luminaries [a select group of Rolls-Royce's top clients worldwide]. This is a four-year journey, therefore we as an automaker and our customer want to know with whom you are in bed with for such a long project.
How much involvement will these customers have?
You need to invest time. You are with us from the first sketch because the end product stems from the customer's ideas. The three customers already knew each other before we started. They had the idea to bring back the Boat Tail design because one of them owns an old Phantom Boat Tail. That was how this all started. The idea for a picnic area also came from one of the customers. And we made it happen. This is marvelous because it's an experience that money can't buy. It's by invitation only.
How will the Coachbuild program evolve?
We will do something every other year. The numbers will be very limited, ranging from a one-off to a maximum of four to make sure they are rare.
Although you don't like to discuss sales figures, will Rolls-Royce once again exceed 5,000 units this year?
It's fair to say that you will see a number over 5,000. I'm pretty sure that we are going to set a new record year. [The current high is 5,152 in 2019]. Obviously, last year our sales dropped substantially because we had to shut down the plant for quite a while and then we operated on one shift only. We ramped up to two shifts in September 2020. Since then, we have been flying. And it's not only us. Banks will tell you how much money currently is available for consumption because it was saved when people could not travel. This helps the luxury goods industry as demand is also booming for boats, jets, watches and jewelry.
Can you meet this rising demand with just two shifts a day?
We have an 11th shift every other Saturday. On weekdays the plant operates from 6 a.m. until 11:00 p.m.
Are people also spending more to personalize their cars than they did before the pandemic?
Definitely. Customers are investing even more money now because they are coming with even more flamboyant ideas. There has been a significant increase. One example is customized colors.
Does this mean that your profit margin per unit will also exceed what you achieved in 2019?
Contribution per unit is far higher than it was in 2019.
With all this positive momentum, will Rolls-Royce branch out into other business areas by offering a branded perfume or lending its name to six-star hotels?
No, our business is Rolls-Royce cars. I don't want us to offer aftershave or get involved in hotels. That's not right for us because it would dilute the brand. We don't need to boost our brand awareness because it is already at a very high level. Every kid in the world knows what it stands for: the best. Secondly, I don't want to distract the very small Rolls-Royce organization from really concentrating on doing what we do: build the best cars in the world. Third, we are in complete control of our design, engineering, manufacturing and aftersales. If we are involved in a hotel project and the quality of the hotel goes down, we have no control over that. Ultimately, we want to prevent any bad experience because even one can immediately spread globally and tarnish your brand. I won't allow that to happen.