Rolls Royce (LSE:RR.) car sales keep on rolling along as the car making arm of the company reported its third consecutive year of record unit sales.
The company sold 3,575 cars in 2012, up from 3,538 in 20122. That may not seem like much as far as the total unit sales for an automobile manufacturer, but when you do the math and realize that the least expensive, stripped down model (if you can say that about a Rolls Royce) starts at about £170,000, you understand that the company can afford to sell a few less cars than the more pedestrian auto makes.
Each successive year since 2009, when Rolls sold 1,002 units, sales have increased with 2,711 units in 2010, 3,537 in 2011, and the 3,575 sold in 2012. In fact, 2009 was the only year in the last ten when demand slowed. But then, we all remember 2009, don’t we? To more fully understand the magnitude of the growth of the car manufacturer, consider this: This year Rolls sold more than three times the number of vehicles it sold three years ago. One a broader plain, The company sold more than ten times what it sold in 2003 when the total sold was an even 300.
Whilst most of us are keeping pretty tight budgets when it comes to consumer goods, “Their is a disconnect between the mega-rich and the rest of us.” Rolls customers are worried about the price of their car as much as they are about their grocery bill. They probably don’t know what their grocery bill is and they really don’t care what the price of their Rolls is. Rolls customers are the elite of the elite. They just want to have the most impressive and luxurious vehicle available. On the other hand, Rolls CEO Torsten Muller-Otvos attributes a large part of the growth to “Our buyers are coming from across the globe and we are attracting new customers by adding different models. For example, our Ghost brand . . . brought in a new breed of self-drive customers, while across our range we have 10% women customers, self-driven and chauffeured.”
Having said that, Rolls is not project as smooth a ride in 2013 as the rate of growth from 2011 to 2012 was minimal. However, as the company has expanded into more than 40 different countries, there seems to be an anticipated growth, regardless of how conservatively the company has expressed its expectations.
But there is still a fox in the hen house that needs to be dealt with before it wreaks havoc with the hens and their golden eggs. Allegations of bribery and corruption, primarily in the companies operations in China and Indonesia, have prompted management to enlist the aid of renowned lawyer and Conservative peer, Lord Gold, to undertake a review of its corporate compliance procedures.
The internal investigation comes after allegations of bribery of a Chinese airline executive to close a deal on the sales of £1.2 billion in aircraft engines for two different airlines. The charges involve separate deals five years apart during which the same executive had moved from one airline to the other. The Indonesian incident involved a case in the 1990’s where, allegedly, the son of a high-ranking official was given a blue Rolls Royce and £12.5 billion in return for him convincing an Indonesian airline to buy Rolls engines.
It remains to be seen how things will pan out. There could be a few bumps along the way, but, most likely, Rolls will keep on rolling.
RR share price was off slightly today at 887.50, down only 3.5 pence to 887.50 and still holding close to its five-year high of 918.00 which it reached just a few days ago on 04 January 2013.