April 26, 2004. Copyright, 2004, Graphic News. All rights reserved

Rolls-Royce marks 100 years of luxury cars
By Neil Winton

LONDON, April 26, Graphic News: One hundred years ago this May car dealer Charles Rolls met engineer Henry Royce and agreed a deal that saw the birth of the world's most famous luxury car marque.

A century later, Rolls-Royce Phantoms, with a price tag of more than US$440,000, (£250,000, 374,800 euros) are being assembled by a BMW subsidiary on England's south coast, whilst its sibling Bentleys -- at $300,000-plus, (£170,000, 254,000 euros) a symbol of success for the likes of David Beckham, Rio Ferdinand and hip-hop's Jay-Z -- are built by Volkswagen at Rolls-Royce's original factory at Crewe, in north west England. 

Rolls-Royce was twinned with Bentley for a majority of its 100 years, but this relationship was torn asunder in 1998 in a takeover battle with BMW which humiliated Volkswagen, EuropeÕs biggest car manufacturer.

Most of us might find it difficult to notice much difference between the biggest Bentleys and Rolls-Royces. They are both luxury barges which are bought by the rich who are anxious to flaunt their wealth in public.

The discreet well-off who want to own the best car in the world simply buy a Mercedes S class, and save themselves about $265,000 (£150,000, 220,000 euros).

But there are subtle differences between Bentleys and Rolls-Royces, according to the cognoscenti.

ÒBentley (is) a maker of rather louche high performance luxury cars and Rolls-Royce (is) a producer of supremely dignified limousines suitable for the most presidential posterior,Ó said Richard Feast in his recent book, ÒKidnap of the Flying LadyÓ (Motorbooks International). The ÒFlying LadyÓ refers to the traditional mascot which sits on Rolls-Royce bonnets.

Rolls-Royce merged with Bentley in 1931, but the companies were separated in 1998 when a takeover bid by Volkswagen came to an unexpected end.

Volkswagen offered $570 million (£480 million, 715 million euros) for Rolls-Royce-Bentley to its owners, Vickers Plc. The offer was accepted, but a rude shock awaited Ferdinand Piech, chairman of Volkswagen. German luxury car maker BMW had already bought the rights to the Rolls-Royce brand name from Rolls-Royce Plc, the aero engine manufacturer with no other links to Rolls-Royce cars. Rolls-Royce Plc originally owned Rolls-Royce cars, but when it was forced into bankruptcy in 1971 after the disastrous RB-211 jet engine venture, it sold off Rolls-Royce cars, but retained the rights to the brand name.

So Volkswagen owned the physical assets of Rolls-Royce cars, but not the crucial right to use the name.

VolkswagenÕs Piech was forced to do a deal with BMW, then led by Bernd Pischetsrieder, which paid $53 million (£40 million, 60 million euros) for the right to make and sell Rolls-Royces. Volkswagen ended up with a few factory buildings in Crewe, in the north west of England, and the rights to Bentley.

BMW has since built a new factory at Goodwood, on BritainÕs south coast, to make Rolls-Royces. Last year it made 481 of its new model, the 6.75 litre, V-12 Phantom, and hopes to make about 1,000 cars a year. This is somewhat less than the original target of between 1,500 and 2,000 cars a year, but reflects increased competition, notably from the Mercedes Benz Maybach.

Perhaps the final irony of this strange affair is the fact that Pischetsrieder, who was later fired by BMW when the alliance with BritainÕs MG Rover came unstuck, was eventually hired by VolkswagenÕs Piech, and has now taken over as the number one man at VW.

Piech had always been described in the media as a tough, cold-hearted, egocentric Austrian, but his willingness to shrug off his humiliation at the hands of Pischetsrieder was ample evidence to the contrary.
/ENDS