Rolls-Royce CEO Torsten Müller-Ötvös Strives For The Extraordinary

Photo Credit: Rolls-Royce Motor Cars

Charles Rolls and Sir Henry Royce founded Rolls-Royce Motors in 1906. The duo manufactured the most luxurious automobiles—Rolls-Royce and Bentley—two very similar luxury cars, for nearly 100 years. Fast forward to 1998, when Rolls-Royce Motors was for sale, two German auto giants BMW and Volkswagen (VW) dueled for the ownership of this legendary British brand. When the dust finally settled, Rolls Royce Motors was split in two: BMW licensed the rights to the Rolls-Royce brand name and logo and acquired the rights to the Spirit of Ecstasy and Rolls-Royce grill shape trademarks. VW purchased Bentley and Rolls-Royce Motors.

In 1998, Rolls-Royce Motor Cars Limited was created as a subsidiary of BMW that would operate from purpose-built administrative and production facilities in Goodwood, England. This is the exclusive manufacturer of Rolls-Royce branded motor cars since 2003. After the dramatic split, the new Rolls-Royce entity picked up the pieces striving to regain its status as the world’s most luxurious car-maker. In January 2010, the dynamic CEO Torsten Müller-Ötvös was hired.

He has done an amazing job reinvigorating the brand. Sales have more than doubled from 1,002 cars in 2009 to 2,711 cars in 2010. They tripled the following year to more than 3,500 cars and exceeded 4,000 cars annually for the last two years. Müller-Ötvös also expanded the product line from the 2003 Phantom to four new models: Ghost, the shorter wheelbase four-door sedan; Wraith, the two-door coupe; Dawn, the full-size four-seat convertible; and the new highly-anticipated SUV Cullinan.

Photo Credit: Olivia Hsu Decker

Named after the largest diamond in the world, Cullinan is the most luxurious all-terrain automobile in the world. With a price tag just under half million dollars, it has all options fully loaded. After two years of extensive test driving with a team of National Geographic explorers around the most extreme terrain and climate—from European mountains to Arabian deserts—Cullinan launched earlier this spring.  It’s slogan “Effortless, Everywhere” did not disappoint the auto critics. The accomplishment has been remarkable thanks to the extraordinary leadership. Haute Living sat down with Müller-Ötvös during the Pebble Beach Concours to get a closer look at the Rolls-Royce transformation. Here is our conversation.

Olivia Hsu Decker: Tell us about the split of Rolls-Royce and Bentley and the different paths they have taken.
Torsten Müller-Ötvös: There is a huge difference between the two brands now from the old days when the brands had been very similar, only differentiated by the radiator grill. When the two brands split up between BMW and VW, the brands departed in a very smart way. They are very well positioned in different markets. We are around $150K more than Bentley in every price class. For example, our SUV Cullinan is about $360,000 base price vs. the Bentley’s SUV Bentaga at $200,000. It’s important to notice that we are not competitors to each other. It’s very different from what people think. You hardly see customers of ours buy a Bentley or vice versa. There is a very different segment and target group.  We are not stealing each other’s customers because we are in a very different league.

OHD: I attended your unveiling of the bespoke Sweptail in Lake Como last year and was at today’s unveiling of the bespoke Dawn to Google’s Ben Sloss. Tell me about the bespoke cars.
TMO: Bespoke is the heart of our business now, nearly 100% of our cars leave the plant bespoke. It’s quite understandable because when you are spending such an amount of money for one of our products you want this product to be exceptional and truly unique. This is exactly what we did for Ben Sloss’ Dawn. We see nearly 30% of customers worldwide first visit our plant in Goodwood and meet with our designers before they finalize their specifications. You sit down with our designers and engineers to create a masterpiece. It’s quite a remarkable experience for the client. Then, when you receive the special bespoke car of your choice, it’s an inspiring event.

Photo Credit: Rolls-Royce Motor Cars

OHD: What is the average time to build a bespoke Rolls Royce?
TMO: It’s indeed a project of collaboration. Sloss’ car was less than four years, but it takes at least a year. What we did with Sloss is we proposed some ideas, but he was fully involved in all the details, such as the very important color for him, the Sunburst Yellow and Pikes Peak Blue in both interior and exterior. If you saw his face today, you saw his reaction and how delighted he was. The same experience happened to Michael Fux yesterday at The Quail. For me, it’s always one of the most exciting moments when we deliver the bespoke car to the customer. Fux’s Fuxia and Intense Pearl color is very unusual. The unique colors carry the owner’s name, and we are not allowed to sell them to another customer. Fux has a collection of 10 bespoke Rolls-Royces each with a different color uniquely his own.

OHD: I own the largest Sotheby’s International Realty company in Northern California. We have mutual clients who buy cars from you and buy homes from me. What’s your idea for a bespoke car for a $25-million home on 285 acres of the Mayacamas Mountain overlooking Napa Valley?
TMO: I would sell the option to specify your color, perhaps a Burgundy red wine color Cullinan to explore the Napa Valley countryside and mountains. Perhaps with a specially-designed wine cooler in the back seat? There is always room for fantasy in Rolls-Royce!

OHD: You’ve appealed to younger buyers with the Black Badge car that relishes the unfamiliar and celebrates risk takers, rule-breakers, and the fearless—“those who dare to be different.” Was this your idea and did you know it was going to be embraced by customers?   
TMO: I like to mention the tremendous success of Black Badge in the US. The Black Badge has helped to convert the brand to a younger brand. It’s remarkable to see how the average age of our worldwide customer went down over the past eight years and very much on the back of a modernized product like Wraith, a faster coupe. In particular, Black Badge, which we launched two years ago,  has proven to be a stunning success story worldwide. It gives a glimpse of the alter ego of Rolls-Royce. The darker side, the more menacing side of the brand. It is a different proposition for Rolls-Royce. It starts with optical changes including the black chrome Spirit of Ecstasy, but it’s massively more into technical details, a completely modified drivetrain, modified trans-cylinder, more horsepower, and more torque. It’s a different way to drive and feel the car. The whole aura of Black Badge has attracted quite a lot of new, younger, edgier buyers with fascinating personalities all over the globe.

Photo Credit: Rolls-Royce Motor Cars

OHD: I could not have imagined a top-Google engineer and race car-collector like Sloss would be a fan of Rolls-Royce. Tell me how your collaboration with Sloss to create a custom Black Badge came to be. 
TMO: Sloss is an excellent testimony of Black Badge’s success. He is a big fan, he can’t imagine driving any other Rolls-Royce anymore, and he created a bespoke Black Badge with our team. He is in the heart of Silicon Valley where we have some customers who are not open to being publicly known for owning Rolls-Royce. But we have turned this around now! There is also the old idea that Rolls-Royce is only a chauffeured car and that’s completely wrong. Markets like the U.S. are purely self-driven cars. Can you imagine being chauffeured in a Dawn or a Black Badge? These cars are drivers’ cars. It’s also a wrong conception to think that for instance in Asia, everybody is using our cars with chauffeurs. In our Chinese market, many of our clients who have chauffeurs are also enjoying driving themselves. The younger customers are getting more enjoyment from driving the Rolls-Royce because the technology is making it much more fun to drive.

OHD: What’s your customer’s average age now?
TMO: Our average age is 44 which is remarkable. Imagine what 44 means—for everyone who is 60 you need to have somebody who is 30 to bring the average age down. Age doesn’t indicate a lot of things, but we brought it from the average age of 56 down to 44, and that is quite a remarkable journey. It used to be an old lady’s car, and that has changed so massively.

OHD: Who is responsible for the change?
TMO: My team changed the marketing, product strategy, design, corporate culture—basically all functions within Rolls-Royce helped to make the transition.

Photo Credit: Rollys-Royce Motor Cars

OHD: How does this change translate to sales?TMO: When I joined the company, we were selling around 1,000 cars a year, we are now selling over 4,000 cars a year. The new products attract more buyers, but our intention is not for volume. The reason why I mention this indicates quite a tremendous success, particularly due to complete new and younger target groups worldwide. This is not only true for the US but is true for Asia, the Middle East, and Europe, too. This is a very remarkable transition.

OHD: Although it has a V12 engine with over 560 horsepower and over 650 pounds-feet of torque, I noticed the SUV Cullinan is not a huge car. Did you intend it to be a practical everyday family car?
TMO: I think it’s the right size. It’s big enough that you can use it for the whole family. It’s a very practical car for everyday use. I will say for the very first time you have a rational argument why you should buy a Rolls-Royce SUV because you can load the whole family and go off-road for vacation in the mountains. Plus, it’s super safe, luxurious, and hi-tech.

OHD: Is China still the biggest market?
TMO: China is our second biggest market after the US. China is resurgent for us at the moment with new products we’re bringing in. The Chinese market has recognized the value of craftsmanship and bespoke cars. We’ve seen a lot more engagement on the bespoke side of the market among Chinese customers.