Rolls-Royce had its best year ever in 2019. The iconic British motorcar manufacturer announced record sales and profits last year, showing a 25% increase in volume compared to 2018. This windfall comes mostly courtesy of their new SUV, the Cullinan, which has proved to be extremely in-demand despite its controversial looks. Let’s dive deeper into Rolls’ performance and the dilemma they are now facing.
Hot Rolls
By any measure, a quarter-fold increase in sales over a calendar year is a spectacular achievement. Rolls-Royce sold approximately 5100 cars in 2019, and sales of the new Cullinan SUV accounted for 40% of that figure. Rolls and its parent company BMW must be ecstatic at this turn of events, especially after the British automaker’s initial reluctance to consider producing anything other than sedans, coupes and roadsters. However, it didn't take long for parent company BMW to realize that models like Bentley’s Bentayga were eating Rolls' lunch, and mobilized to create an SUV of their own.
Cash Cow
Although Rolls was quite late to the SUV party, when it finally did arrive it did so in style. By all measures, the Cullinan is every bit a Rolls-Royce in a traditional sense. The company ensured that their unwavering standards and no-compromise attitude in creating uber-luxurious and bespoke cars were fully maintained despite venturing into hitherto uncharted SUV waters. What's more, they also happened to stumble upon a well-heeled public that was eagerly awaiting their new offering, and the cash boon that accompanied this happenstance.
Spirit of Profitability
Whether or not Rolls Royce will maintain its tremendous growth spurt is anyone's guess. Since their Cullinan factory is currently running at 100% capacity, one can surmise that they can easily expand their operations and “crank out” more cars. Or they may be tempted to add a second, less expensive Crossover/SUV. Tempting (and likely profitable) as that may be, it would likely come at the cost of tarnishing Rolls’ image or compromising its exclusivity. It takes foresight and steady hands to captain this luxury liner through these waters, laden with treasure and tragedy at every turn. It will certainly be a fascinating decade for the luxury manufacturer from Goodwood.
Sources: Autoweek.com, Forbes.com