INTERVIEW: Rolls-Royce and the Middle East: A love story

INTERVIEW: Rolls-Royce and the  Middle East: A love story
Illustration by Luis Grañena
Updated 08 December 2019

INTERVIEW: Rolls-Royce and the Middle East: A love story

INTERVIEW: Rolls-Royce and the  Middle East: A love story
  • ‘In the Middle East these cars are handed down through generations and will never be sold,’ Rolls-Royce CEO Torsten Muller-Otvos tells Arab News in an exclusive interview

At a recent “swing through” the Middle East, Torsten Muller-Otvos, the chief executive of luxury car maker Rolls-Royce, was asked what he regarded as his “perfect drive.”

The 59-year-old German listed the coast of Cornwall in the UK, the south of France, as well as an urban tour in the shape of a night auto-clubbing in London in the new Black Badge Cullinan — the “King of the Night” in the Rolls branding jargon.

But his aides revealed another drive high up their list of priorities, and under negotiation at the moment. Rolls would like to drive the Black Badge through the spectacular scenery around AlUla in northwest Saudi Arabia.

That would be a dream photo-shoot. Setting the jet black car amid the red canyons and architecture of the ancient Nabatean kingdom would be visually spectacular, and would send a subliminal message about the long association, even the long love-affair, Rolls has enjoyed in the Middle East.

Muller-Otvos explained: “This region is very important for us. It is our third-largest region by sales, after the USA and China, which is quite a statement on its own, and now we have the Cullinan, which is a big attraction here.”

The Cullinan is the company’s first foray into the SUV market, and has been a long time in the planning. It also owes something to the Middle East, because, as Muller-Otvos revealed, one of the inspirations behind the concept was the fleet of Rolls-Royce armored cars deployed by Captain T.E. Lawrence — “Lawrence of Arabia” — during the war against the Ottoman Empire in the First World War.

Not that Lawrence’s deadly killing machines have much in common with the extravagant cars the Middle East loves to buy and drive. The region is the biggest consumer of “bespoke” vehicles in the Rolls-Royce range, and cars are customized to a fine degree. “Everything we ship to the Middle East is highly bespoke. They are colorful, they are embroidered, they are localized, and it is wonderful to see them in the bright sun here,” he said.


Born: Germany, 1960


  • Ludwig-Maximilians Universitat Munich
  • University of Augsburg.


  • Director of “Mini” branding for BMW.
  • Senior vice president, central marketing and brand management BMW.
  • Senior vice president, product management automobiles and after sales.
  • Chief Executive Officer, Rolls-Royce Motor Cars

Muller-Otvos has been with Rolls-Royce for ten years, after a previous executive term at brand management and marketing at BMW, which has owned Rolls-Royce since 1998. He has been credited with rejuvenating Rolls with the introduction of new models and designs, while maintaining its reputation as the number one luxury car maker in the world. In that decade, sales have increased fourfold to about 4,000 per year, with a considerable chunk of that increase heading to the Arabian Gulf.

“I always want to have two windows open — heritage and innovation,” Muller-Otvos said.

The Cullinan was received quite critically in some parts of the media worldwide because of this perceived departure from Rolls-Royce’s illustrious heritage. “We would never neglect our heritage,” he insisted.

The expansion in the Middle East was very much a part of this strategy of extending the brand. A decade ago the product range consisted essentially of variations on the august Phantom, the chauffeur-driven car of choice of royalty and presidents.

Since then, he has introduced newer younger models such as the Dawn, the Wraith and the Ghost, and now the Cullinan aimed at a younger aspirational market of high-net-worth individuals, and — increasingly — at women who like to drive themselves and who want to customize their vehicle to a high degree.

Of the Cullinan, which became available in the region last year with a basic price tag in the region of half a million dollars, depending on the degree of bespoke customization, he said: “It was quite an experiment when it landed, but the reality has been far higher than the expectation.”

The car has done very well in Saudi Arabia, combining luxury with top-of-the-range off-road capabilities that would handle the gorges and wadis of AlUla with ease. But one question that he is frequently asked in the Kingdom is whether Rolls-Royce would ever design a car especially for women.


“I would never do that. The last thing any woman would want to see is a car just for them. The Black Badge, probably the most masculine vehicle Rolls has ever produced, is selling well among the Kingdom’s females without the need for any special features, for example to cater for pregnant women.


“We are always looking at both genders when we design our cars. Features like multi-position steering wheels and auto-adjustable seats are standard. But I would never design one with a hanger for a handbag — that would be highly ridiculous,” he said.

“But our female customers are super-powerful people, they are business leaders, they run their own companies, they are powerful people. In bespoke, our motto is ‘your wish is my command’, so everything is possible,” he added, holding out hope for all those who long for a Rolls-Royce handbag hook.

“I have never said no to any customer’s request — as long as the legal rules allowed it.”

Muller-Otvos points to the time he had to disappoint a Rolls-Royce owner who wanted a cigar humidor installed in the dashboard. “That would have conflicted with the airbags and other safety requirements,” he explained.

One innovation which captures his enthusiasm is the move toward electric vehicles. “I think customers will embrace it. We have lots of clients who already own an electric car, so there will be little resistance, as long as it is an authentic Rolls-Royce. The electric concept already fits well with the brand because it is powerful but quiet. There will soon be a point where we can do it,” he said.

The Cullinan has been tested in the world’s toughest terrain, including Arabian deserts. (Photo courtesy of

The Middle East is unique within the Rolls-Royce global market in another way too. Economic activity is still, despite the various strategies toward diversification away from oil dependency, highly variable according to the price of crude oil on global markets. Is there a direct relationship between the oil price and Rolls-Royce sales?

“We are not immune to recessionary tendencies anywhere in the world. Around 80 percent of our ownership is dependent on industry or (people) running their own business, so when you’re business is under constraint, maybe you can’t afford a new Rolls-Royce. I would say there is an indirect relationship between the oil price, the economy and our sales. There was a blip a couple of years ago that we have recovered from now,” he added.

On the Saudi stop of his Middle East tour, one of the questions that arose with their local partner, Mohamed Yousuf Naghy Motors, was whether the initial public offering (IPO) of Saudi Aramco would drain financial resources from the luxury car market. “Nobody expects it to affect our business. To say it (the IPO) would drain money out of our business is just too black-and-white,” he said.

King Abdulaziz bin Saudi, the founder of Saudi Arabia, famously had a special Rolls-Royce given to him by British prime minister Sir Winston Churchill, and ever since the vehicle has been synonymous with royalty in the region. Some countries even discouraged wealthy non-royals from buying the vehicles, but this has changed now, and Rolls-Royce is ready to sell its product to anybody who can afford it.

But it would never go on a mass-marketing campaign, said Muller-Otvos. “I would never want to compromise the pricing segment. To lower the prices of a Rolls-Royce is not a thing we would do,” he said, in contrast to some other luxury car makers in the region who have aggressively gone for market share at the expense of exclusivity.

As the boss of arguably the ultimate luxury car, Muller-Otvos is acutely conscious of the demands of the global luxury brand market, and of the unique requirements of the Middle East, as well as the Rolls-Royce heritage.

“The ultra-high-net-worth people in this region own many cars. They have garages the way that we have wardrobes, with Lamborghinis and Ferraris there too. That is what the luxury business is all about,” he said.

But whatever vehicle is parked alongside it, the Rolls-Royce will always be special, he believes. It has been estimated that about 75 percent of the cars produced under the famous “spirit of ecstasy” mark since it was founded 115 years ago are still on the road, and the tradition of holding onto them is especially strong in the Arab world.

“In the Middle East these cars are handed down through generations. They carry the family crest and will never be sold,” he said.



Bitcoin drops after report Binance under US probe, Tesla move

Bitcoin drops after report Binance under US probe, Tesla move
Updated 14 May 2021

Bitcoin drops after report Binance under US probe, Tesla move

Bitcoin drops after report Binance under US probe, Tesla move
  • Bitcoin dropped to $45,700, the lowest since March 1, then steadied at $49,312 in Asia morning trade on Friday
  • The world’s largest cryptocurrency fell 17 percent on Wednesday following Elon Musk’s remarks

NEW YORK/LONDON/TOKYO: Bitcoin slid to a 2-1/2-month low on Thursday after a regulatory probe into crypto exchange Binance added to pressure from Tesla Inc. chief Elon Musk’s reversing his stance on accepting the digital currency.
Bloomberg reported on Thursday that as part of the Binance inquiry, the US Justice Department and the Internal Revenue Service have sought information from individuals with insight into its business.
Bitcoin dropped to $45,700, the lowest since March 1, then steadied at $49,312 in Asia morning trade on Friday.
The world’s largest cryptocurrency fell 17 percent on Wednesday following Musk’s remarks that Tesla would stop accepting the digital token as payment for its electric cars for environmental reasons.
“Environmental matters are an incredibly sensitive subject right now, and Tesla’s move might serve as a wake-up call to businesses and consumers using bitcoin, who hadn’t hitherto considered its carbon footprint,” Laith Khalaf, an analyst at AJ Bell, said.
Bitcoin remains about 70 percent higher for the year and is more than 1,000 percent higher than its 2020 low of $3,850.
Binance did not immediately respond to a request for comment. A Binance spokeswoman told Bloomberg that the company doesn’t comment on specific inquiries but takes its legal obligations seriously and engages with regulators in a collaborative fashion.
Ethereum, the second-largest cryptocurrency, dropped to a session low of $3,543.62 and last changed hands at $3,656, down about 4 percent. On Wednesday, ethereum hit a record high of $4,380.64.
Tesla’s announcement on Feb. 8 that it had bought $1.5 billion of bitcoin and would accept it as payment for its electric vehicles has been one factor behind the digital currency’s surge this year.
Musk has faced pressure over bitcoin’s environmental impact. The cryptocurrency relies on computers competing to solve elaborate math problems, which use huge amounts of electricity.
“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk tweeted.
Musk’s comments roiled markets even though he said Tesla would not sell any bitcoin and would resume accepting it as soon as “mining” for it transitioned to more sustainable energy.
In a second tweet on Thursday, Musk denounced the “insane” amount of energy used to produce bitcoin, which pushed bitcoin lower.
Jeffrey Wang, Vancouver-based head of Americas at Amber Group, a cryptocurrency service provider, said broader selling of risk assets in traditional markets was another factor behind Wednesday’s bitcoin plunge.
“I don’t think everything is selling off just because of this news. This was kind of the straw that broke the camel’s back in terms of adding to the risk sell-off,” Wang said.
Bitcoin has struggled since hitting a record $64,895.22 in mid-April, dropping to the cusp of $47,000 just 11 days later before hovering around $58,000 since the start of May.

Environmental concerns
At current rates, bitcoin mining devours about the same amount of energy annually as the Netherlands did in 2019, data from the University of Cambridge and the International Energy Agency showed.
Tesla shares were down 2.4 percent, while the biggest US cryptocurrency exchange, Coinbase, tumbled nearly 9 percent. Smaller cryptocurrencies were less affected by the news.
“The reason given in the tweet is fossil fuel use for the mining of BTC, but most cryptocurrencies have already found more efficient ways to do that and therefore outperformed.”
Cryptocurrency dogecoin lost more than a third of its price on Sunday after Musk, whose tweets had stoked demand for the token earlier this year, called it a “hustle” on the “Saturday Night Live” comedy show.
By Tuesday, however, he was asking his followers on Twitter if they wanted Tesla to accept dogecoin and it jumped on Friday in Asia after Musk tweeted about it again and said he was working on improvements to its transaction systems.
Dogecoin rose 20 percent to 52 cents on Friday according to Binance and last traded at $0.4825.

As Saudi construction sector recovers, price of building materials rises

As Saudi construction sector recovers, price of building materials rises
Updated 14 May 2021

As Saudi construction sector recovers, price of building materials rises

As Saudi construction sector recovers, price of building materials rises
  • While steel made the biggest surge, the growth slowed as the year progressed, going from 40% to 28% in March

RIYADH: The price of building materials, especially steel, rose in the first quarter (Q1) of this year, as construction activity began to recover from the slowdown caused by the coronavirus disease pandemic last year.

According to the latest data from the General Authority for Statistics (GASTAT), the price of steel surged to SR3,514.73 ($937.26) per ton in Q1 of 2021, a 33 percent increase year-on-year and the highest price since 2008.

The cost of ready-mix concrete rose 14 percent year-on-year to SR203.9 per cubic meter during the same timeframe, while cables rose 21 percent year-on-year to SR38.33 per meter.

In addition, wood prices rose 15 percent year-on-year to SR3,067.49 and cement was up 5 percent to SR14.03 per 50kg bag in Q1.

While steel made the biggest surge, the growth slowed as the year progressed, going from 40 percent growth in January to 28 percent growth in March.

The increase in prices for materials comes as construction activity increased in Q1, according to a new report by real estate consultancy firm JLL.

“From a supply perspective, the first quarter recorded an increase in construction activity,” the JLL report said. According to its figures, in the residential sector in Riyadh 7,700 units were handed over in Q1, bringing the total to 1.3 million units in the capital. In Jeddah, around 2,000 units were added, bringing the total to 838,000 units.

The report estimated that 36,000 units in Riyadh and 12,000 units in Jeddah are due to be delivered this year.


The report estimated that 36,000 units in Riyadh and 12,000 units in Jeddah are due to be delivered this year.

In addition to the increased activity in the residential sector, Riyadh is also set to see an additional 386,000 square meters of office space, 240 square meters of retail space and 2,800 new hotels rooms built this year.

In Jeddah, the city is forecast to gain an additional 43,000 square meters of office space, 200,000 square meters of retail space and 2,700 new hotel rooms.

However, JLL said that while it remained “cautious about the timely delivery of future projects” it believed that going forward “the government initiatives that are pushing Riyadh to be the business hub of the region are expected to spur local and international demand.”

Announced in January this year by Crown Prince Mohammed bin Salman, the ambitious Riyadh Strategy 2030 aims to create 35,000 new jobs for Saudi nationals, pump up to SR70 billion into the national economy and double the size of the capital city’s population to as many as 20 million by 2030.

The increased development in the first quarter is a welcome change from 2020, when construction activity declined in the wake of restrictions due to the pandemic.

According to the Contract Awards Index produced by the US-Saudi Business Council (USSBC), the total value of construction contracts awarded in Saudi Arabia during the third quarter of 2020 declined by 84 percent year-on-year.

However, Albara’a Alwazir, an economist at the USSBC, told Arab News that he was confident the sector would rebound, just as it had done after the downturn between 2016 and 2018. “While numerous projects have been delayed because of the pandemic, the government has stated that there will be a continued focus on megaprojects especially those that relate to Vision 2030,” he added.

This was already evident in the USSBC’s Q4 report, which found that the total value of contracts rose 115 percent quarter-on-quarter in the last three months of 2020.

World Bank: Saudi Arabia among biggest sources of remittances in 2020

World Bank: Saudi Arabia among biggest sources of remittances in 2020
Updated 14 May 2021

World Bank: Saudi Arabia among biggest sources of remittances in 2020

World Bank: Saudi Arabia among biggest sources of remittances in 2020
  • Remittances from Saudi Arabia have been slowly declining since 2015 as oil prices have moderated and the government has encouraged the hiring of Saudi nationals

RIYADH: Saudi Arabia was the third largest source of remittances globally in 2020, just behind the UAE and the US, according to the latest report from the World Bank.

The US was the biggest source country, sending $68 billion abroad last year, while foreign workers in the UAE sent home $43 billion and those in Saudi Arabia transferred $35 billion, said the report, published Thursday. Among middle-income countries, immigrants to Russia were the biggest remitters, sending $17 billion.

Remittances from Saudi Arabia have been slowly declining since 2015 as oil prices have moderated and the government has encouraged the hiring of Saudi nationals. For instance, foreign workers sent $1.8 billion to the Philippines in 2020, down 36 percent from 2015.

Despite the large drop in foreign workers in Gulf Cooperation Council states, remittances from Saudi Arabia held up in 2020 thanks in part to the cancelation of travel to Saudi Arabia, which diverted funds set aside for the Hajj pilgrimage to remittances to Bangladesh and Pakistan, according to the report. Both of those countries offered tax incentives last year to boost remittances from migrant workers abroad, while a devastating flood in July 2020 also led to an increase in payments.

Remittances to the Middle East and North Africa rose by 2.3 percent to about $56 billion in 2020, following a 3.4 percent increase in 2019, the report said. The gains came amid unexpectedly strong inflows to Egypt (up 11 percent to a record $30 billion), the fifth-largest recipient of remittances globally, and to Morocco (6.5 percent to $7.4 billion). Tunisia saw a 2.5 percent increase, while other countries, including Lebanon, Iraq, Jordan, and West Bank and Gaza all experienced double-digit declines.

Globally, remittances to low and middle-income countries fell 1.6 percent to $540 billion, a smaller decline than expected, the World Bank said. The figure is forecast to increase to $553 billion this year and to $565 billion in 2022.

In December, analysis by Arab News of the monthly remittance levels in Saudi Arabia during 2020 showed some big fluctuations throughout the year, as the impact of the coronavirus pandemic began to take hold.

Figures from the Saudi Central Bank (SAMA) showed the biggest spike was in June when the monthly amount surged 60 percent compared with June 2019.

July also witnessed a rise of 32 percent, while August, September, and October saw monthly levels increase 24.7 percent, 28.5 percent, and 19.2 percent, respectively, compared with the equivalent months last year.

Mazen Al-Sudairi, head of research at Riyadh-based financial services company Al Rajhi Capital, told Arab News: “Debt to GDP (gross domestic product) ratio in emerging economies has increased up to 70 percent recently, and the unemployment rate led by (the coronavirus disease) COVID-19 has also increased in countries such as India and the Philippines, which are the countries forming the majority of the expat population in the Kingdom. Therefore, we believe that increased remittances are due to rising unemployment and difficult economic conditions back in the home countries of expats.”

He said another reason why expats may have been sending more funds home was because their surplus income had increased as a result of being unable to travel or spend as much as normal due to COVID-19 restrictions. “Once the unemployment risks recede for expats in Saudi Arabia, as well as in home countries, this level should normalize in our view,” Al-Sudairi added.

US stocks rebound following inflation scare

US stocks rebound following inflation scare
Updated 14 May 2021

US stocks rebound following inflation scare

US stocks rebound following inflation scare
  • Rebound comes despite worries that soaring inflation could trigger interest rate rises

LONDON: US stocks rebounded on Thursday, a day after slumping on worries that soaring US inflation could trigger interest rate rises sooner than expected, and in turn harm global economic recovery.

Focus was also on bitcoin, which resumed sharp falls after Tesla’s Elon Musk stopped allowing people to pay for his electric cars with the cryptocurrency.

While US stocks opened higher, with the Dow adding 0.3 percent, their sharp losses on Wednesday pulled Asian and European stocks along with them on Thursday.

Tokyo’s main stocks index closed down 2.5 percent and European stocks also suffered sharp losses but recovered as the opening bell in New York approached.

With little in the way of news to spur the reversal, this invites “the notion that the scope of recent losses has gone far enough to whet the appetite of buy-the-dippers who have successfully feasted over the last year or so on down moves like the one that has recently unfolded,” said analyst Patrick J. O’Hare at

Stock markets were already awash with red this week owing to growing fears that the blockbuster global economic recovery and vast stimulus measures will see cashed-up consumers go on a pent-up spending spree that will strain supplies and push up costs.

And those concerns were given oxygen Wednesday by figures showing US consumer inflation spiked at 4.2 percent in April, far higher than estimates and the highest since 2008 just before the global financial crisis kicked in.

That was followed on Thursday by data showing that producer prices jumped by 6.2 percent in April, the highest pace since 2010.

The advances were driven by a rally in commodity prices such as widely used copper, iron and lumber, which are sitting at record or multi-year highs.

“For stocks this might be an even tougher moment, given that companies may find themselves struggling to pass on price increases to customers, hitting profitability and putting the year-long earnings recovery in jeopardy,” noted Chris Beauchamp, chief market analyst at IG trading group.

Tech firms, which blossomed during lockdowns as people were forced to stay home, have led the share-price losses as they are more susceptible to higher interest rates.

The Fed has repeatedly insisted it expects such sharp price spikes but they will be transitory owing to last year’s low base and policymakers will not make any adjustments until they are happy unemployment is under control and inflation is running hot for some time.

However, investors are not convinced and there is growing unease that the central bank could lose control of the situation if it does not act in time, with analysts warning it could risk people’s confidence in the institution.

Tai Hui, at JP Morgan Asset Management, remained broadly upbeat about the outlook for equities, saying that while the sell-off was heavy, the gain in US Treasury yields — a gauge of future interest rates — was less severe.

“The market’s reaction ... (was) mild, reflecting the belief that this jump in inflation will eventually calm and revert closer to the Fed’s long-term target,” he said.

Regarding Bitcoin meanwhile, after Musk cited the environmental impact caused by the computing-intense mining process of creating new units, the cryptocurrency slumped around 16 percent.

It later recovered before trading down around 10 percent at $50,400 on Thursday.

How big is Bitcoin’s carbon footprint?

How big is Bitcoin’s carbon footprint?
Updated 14 May 2021

How big is Bitcoin’s carbon footprint?

How big is Bitcoin’s carbon footprint?
  • Concerns mount about the way bitcoin is ‘mined’ using fossil fuels

LONDON: Tesla boss Elon Musk’s sudden u-turn over accepting bitcoin to buy his electric vehicles has thrust the cryptocurrency’s energy usage into the headlights.

Some Tesla investors, along with environmentalists, have been increasingly critical about the way bitcoin is “mined” using vast amounts of electricity generated with fossil fuels.

Musk said on Wednesday he backed that concern, especially the use of “coal, which has the worst emissions of any fuel.”

So how dirty is the virtual currency?

Power hungry

Unlike mainstream traditional currencies, bitcoin is virtual and not made from paper or plastic, or even metal. Bitcoin is virtual but power-hungry as it is created using high-powered computers around the globe.

At current rates, such bitcoin “mining” devours about the same amount of energy annually as the Netherlands did in 2019, data from the University of Cambridge and the International Energy Agency shows. Some bitcoin proponents note that the existing financial system with its millions of employees and computers in air-conditioned offices uses large amounts of energy too.

Coal connection

The world’s biggest cryptocurrency, which was once a fringe asset class, has become increasingly mainstream as it is accepted by more major US companies and financial firms. Greater demand, and higher prices, lead to more miners competing to solve puzzles in the fastest time to win coin, using increasingly powerful computers that need more energy.

Bitcoin is created when high-powered computers compete against other machines to solve complex mathematical puzzles, an energy-intensive process that often relies on fossil fuels, particularly coal, the dirtiest of them all.

Green Bitcoin?

Bitcoin production is estimated to generate between 22 and 22.9 million metric tons of carbon dioxide emissions a year, or between the levels produced by Jordan and Sri Lanka, a 2019 study in scientific journal Joule found.

There are growing attempts in the cryptocurrency industry to mitigate the environmental harm of mining and the entrance of big corporations into the crypto market could boost incentives to produce “green bitcoin” using renewable energy. Some sustainability experts say that companies could buy carbon credits to compensate for the impact. And blockchain analysis firms say that it is possible in theory to track the source of bitcoin, raising the possibility that a premium could be charged for green bitcoin. Climate change policies by governments around the world might also help.

Alternative energy

Projects from Canada to Siberia are striving for ways to wean bitcoin mining away from fossil fuels, such as using hydropower, or at least to reduce its carbon footprint, and make the currency more palatable to mainstream investors.

Some are attempting to repurpose the heat generated by the mining to serve agriculture, heating and other needs, while others are using power generated by flare gas — a by-product from oil extraction usually burned off — for crypto mining.

China crisis

The dominance of Chinese miners and lack of motivation to swap cheap fossil fuels for more expensive renewables means there are few quick fixes to bitcoin’s emissions problem, some industry players and academics warn. Chinese miners account for about 70 percent of production, data from the University of Cambridge’s Center for Alternative Finance shows. They tend to use renewable energy — mostly hydropower — during the rainy summer months, but fossil fuels — primarily coal — for the rest of the year.