On Thursday, Rolls-Royce Motor Cars, a subsidiary of BMW, introduced the latest version of its Phantom model. And at a starting price of $500,000, CEO Torsten Muller-Otvos called it the “most sought out luxury item in the world.”
Muller-Otvos told Yahoo Finance that demand from ultra high net worth individuals remains high.
“I would consider us not in the automotive business. We are in the luxury goods business,” he said. “Our customers in many cases have carriages like we would have wardrobes…. For every occasion the right car. For that reason, it is different. Nobody buys a Phantom for the pure means of transportation.”
In 2016, the company sold 4,011 cars, up 6% from the prior year.
Despite continued data that consumers are looking to flaunt wealth less after the recession, Muller-Otvos said that owning a Rolls is not about “bling.”
“It is about substance,” he said. “What attracts people are the quality levels.”
Vehicle growth
While the US is the company’s most important market, growth for the company has come from around the world, including China.
And while the corruption crackdown in China that limited luxury spending put some pressure on sales, Muller-Otvos said demand in the region is coming back.
“Two years ago it hit everybody in a way,” he said. “But the Chinese market is very much back on track.”
In fact, in 2016, Rolls-Royce completed the largest single commission ever undertaken by the company: a fleet of 30 Phantom Extended Wheelbase units exclusively designed and handcrafted for the THE 13 hotel in Macau.
Aided by BMW’s access to technology, Muller-Otvos said the company is focused on attracting more consumers who want to drive its vehicles in addition to being driven. This speaks to the traditional chauffeur image of the company.
“It’s becoming more popular particularly with the models we’ve introduced over that past couple of years that driving yourself is the name of the game.”
And, keep an eye out for the development of an SUV under the code named Project Cullinan, expected to be the company’s next project to debut.
Nicole Sinclair is markets correspondent for Yahoo Finance
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