Rolls-Royce posted its best global sales to date in 2018 with a volume of 4,017 units, and the BMW Group subsidiary is likely to set a new all-time high this year. The Cullinan, the brand's first SUV, gave Rolls-Royce a big boost. CEO Torsten Mueller-Oetvoes also says the company has achieved record levels of profits, without going into detail. Mueller-Oetvoes, who has led Rolls-Royce since 2010, spoke with Automotive News Europe Correspondent Nick Gibbs about the brand's sales surge as well as its shift to electric powertrains.
Do you think that Rolls-Royce will have another record year?
If no major disruptions happen worldwide, we are well positioned to set a new record in 2019. We have a strong order bank into the fourth quarter. The Cullinan has proved to be a stunning success. It is sold out into the fourth quarter.
Bentley's SUV, the Bentayga, started with high sales but they have fallen recently. How will you maintain Cullinan sales?
Our strategy is clear. We are not in any way camouflaging a [BMW] X7 and presenting it as a Rolls-Royce. Our clients are very astute and understand what they get for their money. You can't just offer bling any more, you need to offer very convincing substance. That is what we have delivered.
What are your electrification plans?
We will go electric in the next decade. We won't tell you exactly when but rest assured it will happen, step by step. Not hybrid but full electric. We won't phase out combustion engines overnight, there will be overlap for quite a while. We will sell cars with 12-cylinder engines as long as we are legally allowed to do so.
Are your customers ready to switch?
We determined four to five years ago when we built a mockup of an electric Phantom and put quite a lot of customers behind the wheel that electric is quite fitting to the brand. It's powerful, torquey and silent. The main issue was range, and we can crack that in the next decade with new battery technology. Recharging by cable was also not seen as very Rolls-Royce, therefore, we are investigating different options for charging.
Bentley and Aston Martin say EVs will lure new customers. Do you agree?
Will they unlock additional potential? Yes. How big is that potential? Let's wait and see. Our customers will embrace electric if it fits. Brands such as Ferrari or McLaren are all about exhaust noise. That's not us. For that reason electric is a natural fit, as long as we can fix the range and charging technology issues.
Does an electric Rolls-Royce look like an electric car? Does it need to project modernity?
All our cars project what Rolls-Royce promises and that is presence. It will be unmistakably a Rolls-Royce while also expressing that it's an electric-powered car.
Whatever happens to the UK's future relationship with the EU, life would be easier for you if you could source more parts in the UK. Is that possible?
I would love to but I would need a supplier structure in the UK and that's not in existence. Only 10 percent of our parts are coming from the UK. I need 38,000 parts to build a car and 90 percent are coming from all over the world. Every day 12 trucks deliver parts.
Automakers are facing varied economic headwinds globally. What do you fear most?
In general, economic uncertainly is not good for our business because it leads our potential customers to feel uncertain. Today, 80 percent of our customers are running businesses. If there is an economic downturn and your own company is suffering then you are less likely to buy a new Rolls-Royce.
Did the change to U.S. corporate tax laws help?
Very much. It was an interesting case because a lot of people were holding back on purchases until the tax reform was completed. Once this was done our business kicked off nicely. It gave confidence in the U.S. economy and that fueled hunger for luxury. The U.S. is our biggest market.
How do your sales break down globally?
The U.S. is roughly 30 percent, China 20 percent, 20 percent is Europe, 15 percent is Asia Pacific and 15 percent is the Middle East.