Venerable luxury carmaker Rolls-Royce is preparing to jump on the SUV bandwagon that other premium marques have already set in motion in the chase for sales growth. The automaker, that for the past 111 years has built a limited number of sumptuous limousines said early on Wednesday that it will develop a sports utility vehicle that can cross “any terrain” in response to client demands.
The change of heart comes after parent company BMW said that it will build an X7 offroader with three rows of seats and rivals Bentley and Jaguar unveiled plans for their own SUVs.
“The SUV is the hottest product in all vehicle segments,” Metzler Bank automotive analyst Juergen Pieper said. “SUV’s sell well in the United States and in all emerging markets, where the road infrastructure may not be the best. For Rolls it is a shift to growth.” Though proud of the exclusivity of its 12-cylinder cars, the company has long hesitated over whether to build an off-roader, worried that it may stretch the brand too far.
It sold only 4,063 vehicles last year, with volumes having grown at a glacial pace since 2003, when it delivered 300 cars. A spokeswoman declined to comment on potential sales of the SUV but said: “What is key to our strategy of carefully managed growth is that Rolls-Royce cars remain rare, precious items and absolutely authentic.”
A recognition of changing trends had already prompted Rolls-Royce to expand its range beyond the like of its massive Phantom limousine, introducing the Wraith Coupe in 2013 and Ghost II last year. The new Rolls-Royce off-roader, which it said will be built at its Goodwood plant in England and will enter the market in about three years’ time, could prove a lucrative addition. The higher ground clearance of SUVs has proven particularly popular in Russia, China, Brazil, Malaysia, India and other emerging markets with bad roads.
Sports car manufacturer Porsche has certainly benefited from its expansion into SUVs, which today make up more than two thirds of the Volkswagen-owned company’s sales. Porsche expects to sell more than 200,000 cars in total this year while sister brand Bentley said it has received about 4,000 advance orders for its SUV, due to hit showrooms in 2016.
As for Rolls-Royce’s potential market, it could also be buoyed by a growing band of the super-rich, if a report by Capgemini and RBC Wealth Management is anything to go by. Wealth accumulated by high net worth individuals, defined as those having investable assets of $1 million or more, is expected to reach a record of $64.3 trillion by 2016, up 22 percent on 2013, the report said.
Though Rolls-Royce has not specified a price for the new SUV, you can be sure it won’t come cheap.