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

CNN
–

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

Usually, when a car manufacturer expands a factory it is for one simple reason: to build more cars. But this is a Rolls-Royce. Making and selling more Rolls-Royces would undermine the brand’s celebrated exclusivity.

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

The expansion signals something about Rolls-Royce’s wealthiest customer. Although they can only buy so many cars, they can definitely 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 consumers paid for their cars increased by 43%, from $350,000 in 2020 to $500,000 each, on average, last year.

That increased revenue per vehicle is due in large part to more complex and time-consuming customization — “potentially,” as Rolls-Royce puts it — applications. It even calls its luxury customization programs “Bespoke” and, for fully customized models, “Coachbuild.”

“We don’t have to increase that much,” said Martin Fritsches, president of Rolls-Royce Motor Cars Americas. “That’s obviously not our focus. But obviously, our proposed location is getting and it’s appropriate. And it’s been expanding a lot, especially in the last few years.

This will be the first major expansion of the factory 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 bought Bentley in 1931 – at the factory there . Crewe, England.

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 a special option over the brand’s long list of options, a 43% increase from the previous year.

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

“We are small in terms of (market) size and in terms of (market) share,” Lamborghini chief executive Stephan Winkelmann said in a recent interview with CNN. “So we have to get the most out of every car.”

The rise of extreme car customization results, in large part, from rising levels of extraordinary wealth around the world. There are wealthier people in the world and they have more money to spend on things like cars with diamond dust in the paint and picnic facilities built into the cargo area.

“The customer is rich, but not stupid. You have to get your price increase,” said Javier Gonzalez Lastra, investment partner with Tema ETFs, which runs a luxury goods investment fund.

Bespoke doesn’t just mean choosing paint colors, although customers can do that. Rolls-Royce buyers even provide nail polish or nets and ask for their car to match the color. But customers also want custom wood insert designs, custom fabric systems and built-in cabinetry for their cars. These are the types of applications that have been increasing in number and complexity, Fritsches said.

These types of requests take time – and space – to fulfill. One car, a Rolls-Royce sedan called the Phantom Syntopia, has a colorless paint made with different levels of glass particles to create flowing designs on the outside of the car. The same effect was used on the lacquered tray tables inside the car. In addition, the curved fabric structure in the interior sparkled with light from thousands of thin fiberoptic cables. The car even had a special fragrance inside, a first for Rolls-Royce.

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

“This is a clear example where you have to devote more time to the craft,” Fritsches said, “and this is where you need additional space to store additional equipment.”

While the Phantom Syntopia was an extreme example, other projects involve the application of options such as deep wood and mother-of-pearl inlays.

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

Rolls-Royce has even created a small number of custom 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 quite unique and can cost tens of millions of dollars.