Business Interview - ‘Oman market is an important part of Rolls-Royce’s Middle East strategy’

Muscat - 

Torsten Müller-Ötvös, chief executive of Rolls-Royce Motor Cars Ltd was recently in Oman for a vacation along with family. In an exclusive interview with Muscat Daily Müller-Ötvös spoke about the launch of Cullinan, the first SUV from Rolls-Royce portfolio in decades. 

He hopes that the new launch and improvement in economy would help attracting attention of younger generation and might boost recovery in sales in the Middle East region.

Rolls-Royce has global operations and Oman is not a very big market, so what is your purpose of coming to Oman?

I regularly visit Oman and other countries in the Middle East region. The Middle East is, and always has been an important part of our worldwide business. In Oman this time, I am here for vacation purpose, so it is a mix of business and vacation. My wife and I love visiting Oman. We have been coming here every second year since past ten years. It is a beautiful place. We love visiting countryside here, and for this reason we feel great to be back here. The visit also gives us an opportunity to listen to our valuable clients here. We love to listen to our customers and visiting our partners here. Whenever we come here I always combine leisure time with work.

How important is Oman market for you, keeping in mind the small size of the sultanate’s population and economy compared to some of its wealthy and bigger neighbours?

Oman is an important part of our whole Middle Eastern strategy. It is not the biggest market in the region, but certainly it is the important one. Our partner Al Jenaibi International Automobiles, the authorised dealer for Rolls-Royce in Oman, has been doing business with us for quite a while now. Al Jenaibi was appointed local business partner in 2006 and since then they have been able to grow our business year after year quite successfully.

We have lots of customers in Muscat, and also in other parts of the country. For a company like Rolls-Royce, every single market is important because every single customer and every single car counts to us. We are not in the volume driven business. We have to make sure that we listen to our customers, and we must understand their requirements and should be able to meet them. In order to do that, we have to be very attentive to customers in the market we operate irrespective of the size of the market.

The Middle East region was passing through an economic turmoil during past two–three years, how difficult was the situation for Rolls-Royce here?

We also felt the pinch. All of our markets reported growth, but the situation here wasn’t that good and things like this happen with everyone. You can even say that Rolls-Royce is an indicator of consumer sentiments in an economy. Yes, we have also seen some impact of that. But on the other side, it is the testimony of our partners that even in times of declining markets, we gained market share. And despite all the discouraging factors we were able to keep selling cars here in quite substantial numbers.

Though, sales were not on levels that we used to witness in earlier times. But one must remember that this is not a new thing for us. Worldwide, we have seen markets going down and then going up again. Markets go down due to many factors, be it economic turmoil or fall in oil prices.

Sometime, it may be due to some political issues in this part of the world, all these factors don’t make doing business easier. But, we are confident that we will see this region going back to much better time in the next couple of years. We don’t have a competition from other car makers, but we do compare how many units other luxury car makers such as Bentley, Ferrari or others are selling as it gives us an indication how the market is performing.

So, are you hopeful about the recovery in the market sentiments and overall economy in the near future?

Yes, I do think we have very good chances of recovery in sales this year. This is mainly due to the fact that the delivery of new Phantom car would start in all markets in the Middle East region in the second half of this year. And later Cullinan, our SUV projects, would also become a reality towards the end of this year. This in conjunction with a healthier looking economy due to the fact that oil prices are trading at higher levels will bring new life to the market. It will also bring the confidence level back in the market. I wouldn’t be surprised, if our business also touches a much better level this year compared to 2017.

Rolls-Royce over the past few decades has been focusing more on sedans and it is for the first time in many years that you are talking about SUV. What makes you change your course of action?

Yes, it will be our first SUV in many many years. But one must remember probably, we are the only brand who can credibly look back at the history and say, ‘we have done similar kinds of cars many years ago’. Some of the well known examples are Lawrence of Arabia, who went through all of deserts of the Middle East with six Rolls-Royce SUVs.

In history, we have also seen four-wheel driven silver ghosts in India for tiger hunts with Maharajas. But these were things of the past. Now, the reason why we are back into SUV segment is the change in customer behaviour. We have seen that ultra high-net worth individuals and people who are very affluent are getting younger and younger day by day. They are also getting what we call more casual in their approach about what and how they drive. We have seen younger customers approaching us and telling us that they would love to see such type of car from Rolls-Royce.

They said they would love to have such (SUV) type of cars in which they can transport whole family to anywhere be it to higher Swiss mountains to anywhere down to beaches. It is a car for all sorts of different purposes. I think that is very important for a new breed of customers that we haven’t reached out yet.

That is the reason why we think that time is right for ‘Cullinan’. Moreover, this segment of cars in the world automotive market is growing even in the times of economic crisis. Now they (SUVs) account for around 50 per cent of the car population globally. It also gives an indication how popular this segment is becoming now. I am not surprised that all other luxury car makers are also moving into that segment.

Rolls-Royce is targeting younger customers, but these people are mostly from bigger cities who prefer buying sports car such as Ferrari or Lamborghini rather than going for a bulky SUV. How you plan to address this challenge?

You will be surprised to hear that how many Ferrari customers have Rolls-Royce ‘Wraith’ in their garage. All these ultra high-net worth clients would prefer to have multiple cars in their garages. When we launch ‘Wraith’ for the every first time we have seen Ferrari customers were coming to us. And their reaction was something ‘Wow that’s an amazing car, Rolls-Royce has for the first time something interesting for me’.

Moreover, It could be quite stressful to drive daily in Ferrari particularly in city traffic. It becomes very tiring to travel by such cars in city with frequent traffic jams. So, many have put an additional car to commute daily. Many of them would love to have Rolls-Royce.

Globally there is a shift happening from internal combustion to electric power engines. Rolls-Royce is planning to launch electric vehicles but not in near future; what could be the cause of such delay?

We have announced already that in the next decade Rolls-Royce cars would start becoming electric. We will electrify the brand that is for sure. But the shift is not much customer driven, rather it is regulator driven. So, from legal side we might get forced in certain cities where you may not be allowed to enter city centre with combustion engine. You need to have to electric vehicle to go there. But that doesn’t mean that we will end combustion engine suddenly. We will have both electric and combustion engine for sometime in future.

Moreover, we are doing many things and soon there would be many changes. In the next 25 years, things will not remain same and there could be electric drivetrain, autonomous cars, voice controls, Artificial Intelligence, and also voice powered steering of cars. No one can deny that electric cars are gaining but infrastructure is not there at worldwide, even if it is there in some markets, it is not at the level which is needed to be.

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