Rolls-Royce sees record China sales

Even in the world's biggest auto market's worst slowdown, the luxury car brand is seeing strong demand from wealthy clients

The new Rolls-Royce Cullinan sport utility vehicle is expected to drive sales in China.
The new Rolls-Royce Cullinan sport utility vehicle is expected to drive sales in China.PHOTO: BLOOMBERG

SHANGHAI • The road to conquering the China market is proving bumpy for many carmakers, but ultra-luxury marque Rolls-Royce is on a roll.

It is predicting record sales in China for this year, confident it can navigate the world's biggest auto market's worst slowdown in a generation.

The unit of BMW is seeing strong demand from wealthy clients such as entrepreneurs and celebrities who are not as affected by a slowing economy as the broader consumer base, Rolls-Royce chief executive officer Torsten Mueller-Oetvoes said in an interview with Bloomberg TV in Shanghai.

He also expects the company's new Cullinan sport utility vehicle to help drive sales.

"We are to a certain extent decoupled from what happens in the ordinary car market," he noted.

"I am very confident that we should see again this year a record year in the Chinese market."

Luxury cars have been a bright spot in China's auto market, with sales continuing to rise even as vehicle demand slumps amid a slowing economy and trade tensions with the United States.

Volume for luxury vehicles rose 8 per cent to 2.82 million units last year as more motorists opted for high-end models when replacing cars, according to the China Passenger Car Association.

Rolls-Royce boosted sales in China by 43 per cent last year, outpacing other European luxury brands.

Porsche's volume gained 12 per cent while Ferrari's sales rose 13 per cent.

While Rolls-Royce is not necessarily affected by the trends of the broader car industry, it is not shielded from a slowing economy, Mr Mueller-Oetvoes said.

About 80 per cent of the carmaker's customers are entrepreneurs, and what happens in the economy also affects their purchasing power, he added.

In a sign of the headwinds the Chinese market is facing, Nissan is cutting a future target for car sales in the country by about 8 per cent, people familiar with the matter said, suggesting that the slowdown may be an extended one.

Nissan and Dongfeng Motor Corp now forecast their joint venture will sell 2.39 million vehicles in 2022, the end of the current mid-term plan.

That is a reduction of more than 200,000 units from the previous target.

Mr Mueller-Oetvoes said Rolls-Royce is "strictly against" a so-called hard Brexit, citing concern that it could disrupt the company's supply chain.

The British company has a plant in southern England.

The carmaker has been preparing by training suppliers in new import procedures and it has also arranged for some parts to be flown in if ports become snarled by Customs disruptions.

He said delays in car deliveries are possible should Britain divorce from the European Union without a structured agreement.

"We are to a certain extent worried," he said. "My biggest concern is our logistics chain."


A version of this article appeared in the print edition of The Straits Times on March 23, 2019, with the headline 'Rolls-Royce sees record China sales'. Subscribe