During the height of the pandemic, the luxury automotive market seemed immune to Covid’s impact on the economy in general, at least as far as demand. After all, the client base for the world’s most exclusive marques had ample time at home to configure their dream cars and then order them. The question, though, was how sustainable this new sales paradigm would prove to be once people were no longer sheltering in place? For Rolls-Royce, the answer has been resoundingly affirmative.
The 118-year-old automaker has just announced a record year of business, selling 6,021 examples from across its model line, which represents an increase of eight percent from 2021. And the North American market was pivotal to that success. Martin Fritsches, president and CEO of Rolls-Royce Motor Cars Americas, recently spoke to Robb Report about the banner year, why the Bespoke division is booming and how the new all-electric Spectre promises to deliver another beneficial jolt to Rolls-Royce’s revenue stream.
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What propelled Rolls-Royce’s record sales performance, especially in North America, this past year?
You have a couple of factors here. First of all, this market, and this country [United States] has been open from day one [during the pandemic] compared to other regions. Secondly, it’s a result from our trend of continuing to attract new and younger customers with products like Cullinan and Black Badge that are maturing and becoming more popular. And then an additional spike comes from the fact that we’re going electric, and in the US, that trend is already ongoing.
How important is the US market to Rolls-Royce, and have you seen a change in its relevance?
Currently, North America is one-third of our global business in terms of commissions, deliveries and even future demand when we look into our pipeline. And it looks to be getting stronger in that perspective. The US continues to be the relevant market for Rolls-Royce when it comes to brand-shaping and trendsetting variables. In the last two years, when I talk to the board, I always say that we should never stop believing in the US or underestimate the American market. Historically, during pandemics, during crises, we have seen that this market is always the first one to not only keep a relatively consistent and predictable level of performance, but when it recovers, it recovers proportionally stronger than other markets.
How do you explain the growth in your Bespoke commissions for 2022, the most in the marque’s history?
Our customers are becoming more and more sophisticated and our brand is becoming increasingly focused on offering them unique experiences. Part of this is creating a culture of education for this customer profile. Also, there was scarcity in the market and customers had to wait, so while waiting we asked why they really wanted a Rolls-Royce. Is it just because they’re successful or do they want to express certain things, and we have spent more time with them to create the most exciting and valuable Bespoke commissions ever.
Why do you consider such ultra-custom commissions a strong investment in today’s economic climate?
Because of scarcity, people are understanding that the one-offs are way more valuable than having just one more of a similar car, and the market sees it like that. We see it on all levels, not just ultra-luxury but in general—it’s all about differentiating yourself.
How has the all-electric Spectre model been received so far, and what’s the wait time for one?
I must say that it’s really over-performing, by far. We’re going to have the first one at the end of this year, but we’re already filling slots for the fourth quarter of 2024. It’s becoming a bit of a challenge to manage that long a lead time.
Are you approaching Spectre’s potential customer base differently than the clientele for other models?
In a sense, because historically we have never had such a long waiting period. And particularly here [the US], we have a high number of new customers that are joining the brand with a new product that they will only get in over a year’s timeframe. So there are some factors that are pretty unique.
Can we expect any changes to Rolls-Royce’s US dealer network in 2023?
When it comes to our partners and our presentation in the US, we will keep our current dealer structure and won’t add any new point of sales. We cannot produce more cars and are basically sold out for the coming quarters, so why should we add players if we already have good existing ones. What we are really focused on is the implementation of a new corporate identity with new showrooms. Because we have a clear, loyal strategy when it comes to dealer development, our dealers are willing to invest the money we need to continue having a young, dynamic and attractive brand, and a consistent approach across North America.
Click here for more photos from Rolls-Royce’s Record Year.
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