Sales of High-Flying `Rollers' Sink to New Lows
WORLD-FAMOUS British luxury cars are fighting to survive amid signs that recession will continue well into next year.
Jaguar, purchased by Ford in 1989, suffered a 25 percent sales drop in the first half of 1992 and has only limited hopes that sales in the United States will pick up. In October, Ford said that it was investing $10.6 million to modernize the Jaguar assembly line. A month earlier the company launched an upgraded range of models and increased prices by an average of 5 percent.
Rolls-Royce, a subsidiary of Vickers PLC, is in serious trouble. This year it expects to sell around 1,350 cars compared with 3,300 in 1990. Vickers wants to sell Rolls-Royce and has tried to interest Toyota and BMW, but without success. As a stop-gap measure, the company, faced with a pre-tax loss of $18.2 million, decided in September to shed 950 workers at Crewe in Cheshire and drop plans for a new model.
Peter Ward, chairman of the company, says sales of Rolls-Royce and its sister marque Bentley are unlikely to recover until mid-1993, and then only modestly. The cost of a "Roller" (the cheapest model, the Silver Spirit, costs $140,709 without extras, and a Corniche sets a purchaser back about $226,950) is just too high for most luxury car buyers in a time of recession.
"We will continue product development on an evolutionary basis," says Sir Colin Chandler, Vickers's chief executive. "There is an awful lot of customer loyalty."
GAREL RHYS, professor of motor industry economics at the University of Wales, says selling off Rolls-Royce Motor Cars would be controversial, raising questions about the future of the country's car industry as a whole. "Rolls-Royce is the only major car manufacturer in this country that is still British-owned," he says. Rolls-Royce is having to compete with European luxury carmakers whose prices are lower. BMW's top model sells in Britain for about $105,910, and Mercedes' best for $151,300. For such pric es, Mr. Rhys says, buyers get vehicles with high-level technology. Rolls-Royce cars, despite their luxury, are not as "state-of-the-art" as their competitors.
Industry experts suggest that to put its cars on a technical par with its rivals, Rolls-Royce Motors needs an injection of at least $300 million.