Rolls-Royce sees record sales in 2022, no slowdown in spending by the wealthy

Wealth

Rolls-Royce sold a record number of cars in 2022 as demand for its $500,000 vehicles remained strong, despite recession fears, according to CEO Torsten Muller-Otvos.

“We haven’t seen any slowdown or downturn,” Muller-Otvos told CNBC. “We haven’t seen any negative impact.”

Rolls-Royce delivered 6,021 cars last year, up 8% over 2021 and the first time the company crossed the 6,000 mark. The British carmaker, which is owned by BMW, doesn’t break out its profits and revenue. But the company said the average price of a Rolls-Royce soared to $534,000 last year — thanks largely to its customization program known as Bespoke.

With Bespoke commissions customers can help design and customize their Rolls-Royce cars with everything from unique paint colors to silk-embroidered headliners, one-of-a-kind wood materials and personalized champagne chests.

The company opened an invitation-only Private Office in Dubai to better service VIP and Bespoke clients in the Middle East, the leading region for ultra-customized ‘High Bespoke’ vehicles, and said more Private Offices will open around the world in the coming months.

Still, the U.S. was the largest market overall for Rolls-Royce in 2022, accounting for nearly 35% of its global sales, Muller-Otvos said. China, its second-largest market, saw a slight decline in sales but still claimed 25% of global sales and posted its second-strongest year for the company. Muller-Otvos said China’s reopening and economic recovery could help make China its largest market in the future.

“I foresee that market being quite a stunning business for us,” he said. “Particularly in the luxury segment, it’s in growth mode. I would not be surprised to see one day China being the largest region for us worldwide.”

Rolls-Royce
Steve Christo – Corbis | Corbis News | Getty Images

The company’s SUV, the Cullinan, was its bestseller in 2022, making up about half of global sales, Muller-Otvos said. Its Ghost model accounted for over 30% of sales, while the Phantom accounted for about 10%.

Meanwhile the automaker’s biggest launch of 2022 was the Spectre, Rolls-Royce’s first electric vehicle and the beginning of its plan to become fully electric by 2030.

Spectre, with a starting price of $413,000, saw more than 300 preorders from U.S. customers before it was officially unveiled last October. Muller-Otvos said U.S. orders have continued to climb, though he declined to provide numbers.

“Definitely far more than 300,” he said. “The orderbook has exceeded our expectations — even our highest expectations.”

Rolls-Royce has a big order backlog that will help cushion the company against any potential recession, Muller-Otvos said. The backorders now stretch for nearly a year, meaning anyone purchasing a Rolls-Royce today will most likely have to wait between 10 months and a year, depending on the model and features.

As for 2023, Muller-Otvos said it’s difficult to forecast so early, but signs point to continued strength.

“I’m not saying we’re immune from recessionary tendencies. We have seen years when our business was affected. So let’s cross our fingers that isn’t happening this year. I’m cautiously optimistic about us delivering another strong year in 2023,” he said.

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