Saturday, June 27, 2009

BTO: In the spirit of ecstasy

Business Times - 27 Jun 2009

In the spirit of ecstasy

Through world wars and global recession, Rolls-Royce holds its head high as the standard bearer of ultimate luxury. By Ven Sreenivasan

YOU can get there in any car. But you only truly arrive in a Rolls-Royce.' Tom Purves' passion is obvious. The 60 year-old CEO of Roll-Royce Motor Cars is proud to be the number one salesman of the century-old British carmaker which sets the standards for luxury and style in the industry. And justifiably so.

In the 105 years since Sir Henry Rolls created his masterpiece 10hp, two-seater in 1904, Roll-Royce cars have never failed to hold in awe anyone who loves the internal combustion engine. The car whose hood sports the Spirit of Ecstasy - the statue of a woman leaning forwards with her arms outstretched behind and above her - has survived and thrived through two world wars, dozens of recessions, energy crises, and yet continues to see steady demand from the well-heeled of the world.

'Many manufacturers make good cars,' says Mr Purves. 'But there are not many cars that stand for celebration of occasions. There are not so many cars that stand for arriving and departing in style. That's what separates us from the rest.'

Yet, the maker of the world's most acclaimed luxury car is a very different animal now compared to what it used to be.

Today, Rolls-Royce Motor Cars is owned by Germany's BMW group, after previous owners Vickers decided to sell the carmaker in 1998. Following a two year tussle between Volkwagen and BMW for ownership, Roll-Royce ended up in BMW Group's stable, while sister brand, Bentley went to VW. The Rolls-Royce's Corniche ceased production in 2002, with the new Phantom emerging as the first new model following the restructuring.

Though Roll-Royce Motor Cars Ltd is now a BMW Group subsidiary, Mr Purves insists it remains true to its British traditions, with no dilution in exclusivity and its home in Goodwood Estate, West Sussex.

'We have a team of engineers who work both in the UK and in Germany, exclusively dedicated to Rolls-Royce, tough within the BMW world. They have access to the technology of BMW, their physical assets, the wind tunnels and so forth. But they are not working on anything else other than on Rolls-Royce.'

The soon-to-be launched 200EX - which many dub the 'mini-Rolls' - will epitomise the marriage of BMW technology with the Rolls-Royce spirit.

The car - first unveiled at the Geneva Motor Show in March, and now named the Rolls-Royce Ghost - is sized between the traditional Phantom and the BMW 7 series. It is engineered to be more involving and dynamic for owners who want to drive it themselves. It has 80 per cent of its parts unique to itself, and an engine unique to Rolls-Royce.

He sees technology sharing as a natural progression. 'The industry is building more cars than it did 20 years ago, and parts, components and factories are all over the world. I don't know a car, a West European car, which is made in a single country. They bring the parts from France, Germany, Britain and Italy. The aluminium that goes into Rolls-Royce is extruded in Denmark, welded in Germany and finally assembled here in England. From the 1960s onwards, there has always been an American gearbox in a Rolls-Royce. So there have always been components in our cars which are international. Our customers are looking for the best, and they don't strongly have an opinion on where that should come from, so long as the car retains its distinct Englishness.'

Heritage plays a large part of a brand's impression in the mind of the buyer.

'From our very early days, Rolls-Royce has stood as a symbol of success. It is a celebration, if you will. I notice people smile when they get into a Rolls-Royce, as if they are enjoying their success. When you drive a Rolls-Royce, you stop for the pedestrians at a pedestrian crossing, where maybe you wouldn't have done in another car. One of our customers, and he wouldn't mind us mentioning his name, Rowan Atkinson, you know Mr Bean, has a Rolls-Royce Phantom. He is a car fan. When asked about his Phantom, he said: 'The thing I like most about it is I can take it on long journeys. When I drive it, everything about it seems right. It gives me the pleasure to shut the door. It gives me pleasure to start the engine. It gives me pleasure to start the gears and it was a pleasure to proceed. And I feel like after I've driven a whole day long, I can continue to drive some more...'

'In the Phantom, we have the largest tires on any passenger cars, and that was done deliberately. The quietness is critically important. You shouldn't hear the engine. It should be a whoosh, rather than an exhaust noise. It was once described to me by Rolls-Royce engineers being everything needs to be like a ball of silk, everything needs to work. Even the simple electrical switches on the electrical dashboard, they need to feel like jewellery when you turn them. And that is what we believe in. That is what we have done with the Phantom, that is what we're doing with the 200EX car. I think that iconic appearance, together with advanced technology that we have access to, are two tremendously important pillars of our success. If we were to stray from that, we would have substantial difficulty.'

Uncompromising position

But in an age of rapid technological advancements, how long can a Rolls-Royce car still stand apart and distinct from other great brands?

'There are Ferraris, Lamborghinis, Maseratis, Aston Martins which are sports cars that epitomise performance. A top-end BMW is a very exciting driver's car. Rolls customers come from all ages, backgrounds and businesses. But the one thing they have in common is their desire to have the finest, and the means to acquire it. That is a position which is not really challenged. It is a non-sporting and uncompromising position. It's about a desire and appreciation of refinement and luxury.'

So how is a Rolls-Royce different from a top-end BMW?

'The ride quality of a BMW could be somewhat harsher, the noise level will be somewhat higher. The whole feeling of the BMW will be one of 'where is the next corner?'. In a Rolls-Royce, you will have all that I mentioned before but the whole feeling of the car wouldn't be where is the next corner but that another hundred miles is no problem. The car is absolutely effortless. When you arrive in a BMW, you arrive in a BMW. When you arrive in a Rolls-Royce, you've arrived. And our doors are made deliberately, so you can exit the car with great elegance. The doors on a BMW are designed to be efficient, to do the job of a car door, only better than most other cars.

'There are several small things, that are not very important as far a car is concerned, the mascots on the bonnet - Spirit of Ecstasy - automatically rises and lowers. The Rolls-Royce emblem on the wheels stay vertical when the wheels go round. Every Rolls-Royce has umbrellas fitted into the doors. By the way, you can put them back into their containers soaking wet because they are made from special materials that would dry without even becoming mildew. Things like that, that actually make a difference, people remember it, and people relate to it.'

'So I would say, our approach to building the ultimate car is to produce effortless, silent, silky performance. BMW's is to build a high quality performance car for the family.'

That has not stopped Rolls-Royce from incorporating the latest most exciting motoring technology. 'The Rolls-Royce Phantom uses aluminium spaceframe that are welded together, installed by hand,' Mr Purves reveals. 'It is an interesting point: different materials, same painstaking process. The attention to detail in engine assembly is very similar, but the technology of the engine is hugely different, and the materials used are hugely different. The woodwork interior, for example, is very much the same as it was except that in the old days it would have been built up on a wooden back-frame. Today it would be built up an aluminium back-frame for two reasons - its lightness and safety.

'If we took an engineer from the 1920s into our plant today, there are many things he would recognise in today's Rolls-Royce. A lot has changed but not the process and attention to detail. And we still have the best engine technology in the world, with the Phantom 20 per cent more CO2 efficient than its nearest competitor.'

All things considered, Rolls-Royce had a successful 2008. Sales grew 20 per cent from 2007 to its 5th record year for the Phantom, which was launched in 2003. Mr Purves says every market region around the world contributed strongly to sales.

'We were about 6 per cent ahead of last year at the same time in February, and I expect us to be at level last year at the end of the first quarter. But our forward is not as strong as it was, given the economic situation. If I hit last year's sales numbers in 2009, I would consider that success. Last year we made 1,200 cars. With the new car, we should hit 2,000 or 3,000 cars a year, which would be our best'

Still, sales has been flattening out because of cutbacks in conspicious consumption.

'Certainly, circumstances have changed from a year ago,' Mr Purves explains. 'We have had customers who have asked us to sell their cars to somebody else, while maintaining their deposit for a purchase in a year's time, and this we are more than willing to do because we have long term relationships with our customers. It's quite clear that there is a reticence amongst some of our customers to display great opulence. Our cars are somewhat like a wardrobe. Our customers probably have a number of cars. Nobody only owns a Rolls-Royce. They probably also have a Range Rover, a sports car, and a BMW, of course. They'd bring their Rolls-Royce out on special occasions and holidays.'

He likens his salesmen to private bankers, who build long term relationships with customers, rather than just go for a sale. So despite the current slowdown, potential buyers will one day still come back to purchase their car.

'I wouldn't for one moment suggest that this current atmosphere is the best for our business. When we talk about our customers, we are talking about really, really very wealthy people, who even if they may lose one third of their portfolio - as many of them would have - will still remain extremely rich and extremely well-off. And the desire to own this car remains undiminished.'

Then he adds: 'In 1978, when I was in the office in Kuwait, we took the demonstration Silver Shadow out, and I remember stopping out there in the middle of a desert, at a gas station. A little boy came out, looked at the car and pointed at me, and said 'Lolls-Loyce'. At that moment you realise how strong your brand really is. A Rolls-Royce is more precious than rubies in the desert. And it's known everywhere in the world.'

'There are many luxury car makers, and they all have a role to play. But there is only one Rolls-Royce.'




CEO, Rolls-Royce Motor Cars

Age: 60. Scottish upbringing. Father was director of Rossleigh Ltd, the motor company which sold Truimph, Rover, Jensens Jaguar and Daimler in Edinburgh. Young Tom was surounded by cars from an early age. For his school entry interview, he impressed the teacher by detailing all the 'dinky' model cars on the teacher's desk

Education: Daniel Stewart's College, Edinburgh, Scotland

In 1967, joined RR Ltd, Car Division as a 17-year old apprentice engineer, then moved up the ranks. Worked at RR's famous Conduit Street branch in London selling tax-free cars (where founder CS Rolls started his business). Became sales rep for Scotland, northern England and Northern Ireland.

1985-1989: Sales director of BMW (GB) Ltd. 1989: Appointed managing director of BMW (GB) Ltd

1996-1999: Appointed to Rover Board

1999: Appointed chairman and CEO of BMW (USA) Holding Corp, and president of BMW North America LLC

July 2008: Appointed CEO of Roll-Royce Motor Cars Ltd

Early on, he supported the rising stars of Scottish motor racing, including legends Jim Clark and Jackie Stewart. He later sold RR cars to film stars in Monaco, storied sportsmen in America; kings, presidents, and sheikhs from around the world.

Favourite motoring experience: Driving over the Biggar Road and seeing the road stretching before him to his hometown, Edinburgh. He is married with two grown up children. Plays golf, enjoys music and motorcycling.

Brit motoring tradition alive

THE British motoring industry is still vibrant and alive, albeit a very multinational business. And Britain remains the base for technology used in many global marques of today. Tom Purves does not buy the notion of a 'Wimbledon Syndrome' in British motoring industry.

'We have to judge things on the basis of what is being done where, and with what technology,' he says. 'There are now Honda, Nissan, and Toyota with large volumes of cars, in some cases 250,000 cars each, which is a big plant by any standard. Then you have BMW with its investments and its Mini plant in Oxford with 250,000 cars. An engine plant and cylinder used by the BMW Group are built there in Birmingham - about 450,000 engines. You've got manufacturers like Jaguar, Land Rover, Bentley, all of them very vibrant.'

There is the British contribution to motor racing, he adds. 'There is a tremendously successful motor racing industry, where you have Williams, McClaren, all based in Britain. I think we can honestly say that the (British motoring) industry is in really good shape. Are the shares all held in Britain? No, but that's probably true of many companies today. I understand now that Mercedes-Benz is 13 per cent owned by a property investment group or a Abu Dhabi investment group.'

Meanwhile, a wave of modernisation is sweeping across the industry in Britain.

'Most of the facilities have been built in the last 20 years. If you think about plants in Swindon, even our own in Goodwood, they are all very, very new. If you visit Aston Martin, you'll find very modern facilities with modern technologies.'

Yes, the British motoring tradition is alive and well. 'Yes, we have investors from Tata, Honda, Toyota and Nissan. There are only so many organizations who own car manufacturers today. But a substantial lot of the engineering is still done in Britain.'

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