Rolls Royce “BRITAIN’S ECONOMY MAY be heading for a triple dip, but for posh British cars the recession has long been over. Sales of Jaguar Land Rover (JLR) last year were 30% up on the previous year. Over the past two years JLR has taken on 9,000 people, and has just decided to near-double the size of the engine factory it is building in the West Midlands.Rolls-Royce, which sold a record 3,575 of its ultra-luxury cars last year, is on a roll too. At the Geneva motor show it unveiled the new Wraith, a coupé for playboys with at least €245,000 ($320,000) to spare who want to leave the chauffeur at home and do the driving themselves. Bentley, which launched a new Flying Spur limousine at the Geneva motor show, enjoyed sales growth of 24% last year.
These days JLR is owned by India’s Tata Group, Rolls-Royce by BMW and Bentley by Volkswagen, but the cars’ appeal still relies on their quintessential Britishness. Similarly, the success of BMW, Mercedes and Audi cars rests on their German styling and precision engineering, both in rich countries and among the new wealthy of the emerging world.The contrast between the luxury end and the mass-market part of the
European car business is striking. BMW has recently been making operating profits of about €4,000 ($5,200) on each car it sells whereas Opel-Vauxhall, the European arm of GM, has been losing about €1,500 per car. And the global boom in premium-priced cars looks likely to continue. “One thing is for sure,” says Rolls-Royce’s boss, Torsten Müller-Ötvös. “You will see more rich people in the world.” The group of “ultra-high net worth individuals” from which his customers are drawn is expected to grow by 3-5% a year in the years ahead. And in East Asia, where sales are growing fastest, it is more acceptable—expected, even—to
underline your success in life by conspicuous consumption.In a recent study of motor-industry executives from around the world by KPMG, those from rich countries said customers were scaling down to smaller, more efficient and greener models, whereas those from the BRIC countries reported that buyers wanted upmarket models. Even those who could not currently afford these seemed to be looking forward to the day when they would. Tata’s super-cheap Nano has not sold well because India’s first-time car buyers would rather wait than drive what they see as a poor man’s car.”