Rolls-Royce is expanding its factories so it can build cars more slowly

Rolls-Royce is expanding its factories so it can build cars more slowly

Rolls-Royce is expanding its factory in Chichester, England. The BMW subsidiary is adding five new buildings with construction planned to begin next year.

Usually, when automakers expand factories, it’s for one simple reason: build more cars. But this is a Rolls-Royce. Making and selling more Rolls-Royces would undermine the brand’s vaunted exclusivity.

So this factory expansion is not about making more cars, but making more expensive cars, which takes more time and requires more space for workshops and storage of exotic materials.

The expansion signals something about Rolls-Royce’s ultra-rich customers. Although they can only buy so many cars, they can certainly spend more on each one.

Since 2020, Rolls-Royce sales have increased by 17%, reaching a record 6,032 cars and SUVs worldwide last year. At the same time, though, the average amount of money customers paid for their cars increased 43%, from $350,000 in 2020 to $500,000 each, on average, last year.

The increase in revenue per vehicle comes largely from more complex and time-consuming customization — “bespoke,” as Rolls-Royce calls it — demand. It also calls its high-end customization program “Bespoke” and, for fully customized models, “Coachbuild.”

“We didn’t necessarily increase the volume that much,” said Martin Fritsches, president of Rolls-Royce Motor Cars Americas. “That’s obviously not our focus point. But clearly, our bespoke area is growing and relevant. And has grown dramatically, especially in the last few years.”

Even more affluent customers
This will be the plant’s first major expansion since it was built in 2003 following BMW’s purchase of the brand in 1998. Before that, Rolls-Royce cars were built alongside Bentleys — Rolls-Royce had acquired Bentley in 1931 — at a plant in Crewe, UK.

Bentley, now owned by Volkswagen, still builds cars in Crewe and has its own customization program as well. Last year, nearly three-quarters of Bentley customers requested custom options over the brand’s long-standing list of options, a 43% increase from the previous year.

Italian supercar manufacturers Lamborghini and Ferrari have also reported increased levels of interest in customization programs.

“We are limited in terms of (market) size and in terms of [market] segments,” Lamborghini chief executive Stephan Winkelmann said in a recent interview with CNN. “So we have to make the most of every car.”

The increase in extreme vehicle customization results, in large part, from an increase in the level of extraordinary wealth around the world. There are more ultra-rich people in the world and they have more money to spend on things like cars with diamond dust in the paint and picnic gear built into the cargo area.

“The customer is rich, but he is not stupid. You have to earn your upside,” said Javier Gonzalez Lastra, investment partner with Tema ETF, which operates a luxury goods investment fund.

Bespoke doesn’t just mean choosing a paint color, although customers can certainly do that. Rolls-Royce buyers also provide nail polish or a tie and ask for their car to match the color. But customers also want custom wood inlay designs, custom fabric patterns and built-in cabinets in their cars. These are the types of requests that have increased in number and complexity, Fritsches said.

Requests like these take time — and space — to fulfill. One car, a Rolls-Royce sedan called the Phantom Syntopia, uses colorful paint made with different amounts of glass particles to create a flowing design on the car’s exterior. The same effect is used on the lacquered tray table in the car. Additionally, the curved fabric design on the inside shimmers with light from thousands of thin fiber optic cables. The car also has a custom scent inside, a first for Rolls-Royce.

The Phantom Syntopia is likely to cost more than $3 million according to sources, although Rolls-Royce would not confirm the exact price. It took 18 months to build after a four-year design and development process, according to Rolls-Royce.

“This is a clear example where you need to dedicate more time to craftsmanship,” says Fritsches, “and this is where you need extra space to store extras.”

While Phantom Syntopia is an extreme example, other projects involve requests for options such as detailed wood inlays and mother-of-pearl.

The large number of highly customized cars means that, in order to get customers their finished cars without making them wait years, more space is needed for assembly and for various specialized workshops, explains Fritsches.

Rolls-Royce has even created a small number of completely custom-built cars that are not just standard models, such as the Phantom or Cullinan, with unique features or colors. These cars, like the Rolls-Royce Boat Tail, of which three were built, are completely unique and can cost tens of millions of dollars.