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.


BIO

Born: Germany, 1960

Education:

  • Ludwig-Maximilians Universitat Munich
  • University of Augsburg.

Career

  • 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 rolls-roycemotorcars.com)

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.

 

 


OPEC+ has a role in containing inflation, says Saudi oil minister

OPEC+ has a role in containing inflation, says Saudi oil minister
Updated 59 min 36 sec ago

OPEC+ has a role in containing inflation, says Saudi oil minister

OPEC+ has a role in containing inflation, says Saudi oil minister
  • The minister also warned that the increase in oil prices was not clear and could be due to “real supply and demand” or due to “expectations and trajectories that are excessively optimistic”

RIYADH: Saudi Arabia’s Energy Minister, Prince Abdul Aziz bin Salman said the OPEC+ alliance will play a role in “taming and containing” inflationary pressures, just hours after Brent crude surged back above $75 a barrel, Bloomberg reported.
“We also have a role in taming and containing inflation, by making sure that this market doesn’t get out of hand,” he said Wednesday at a conference organized by Bank of America Corp., according to a recording of his remarks obtained by Bloomberg News.
The minister also warned that the increase in oil prices was not clear and could be due to “real supply and demand” or due to “expectations and trajectories that are excessively optimistic,” he said.
He said the group should remain cautious because the oil market wasn’t out of the “doldrums” created by the coronavirus pandemic. He also warned traders against conflating caution with inaction, Bloomberg said.
“We have to be cautious. But caution doesn’t mean we don’t have to do something,” he told the conference. “It means we have to ensure that we don’t make


Bitcoin Fund breaks new ground in Middle East with debut on Nasdaq Dubai

Bitcoin Fund breaks new ground in Middle East with debut on Nasdaq Dubai
Updated 24 June 2021

Bitcoin Fund breaks new ground in Middle East with debut on Nasdaq Dubai

Bitcoin Fund breaks new ground in Middle East with debut on Nasdaq Dubai
  • The fund has roughly $1.5 billion in assets under management and plans to double that next year

DUBAI: The Bitcoin Fund debuted on the Nasdaq Dubai on Wednesday, becoming the Middle East’s first listed cryptocurrency fund.
The fund, which was listed by Canadian digital asset management firm 3iQ on the Toronto Stock Exchange last year, has roughly $1.5 billion in assets under management and plans to double that next year.
“With the listing of the Bitcoin Fund, it’s going to give people access in the region to this fund on the Dubai exchange in the hours that the Dubai exchange trades at,” Frederick Pye, the chief executive officer of 3iQ, told Reuters.
“If the volumes are significant, we’ll be looking to raise capital to increase the size of the Bitcoin Fund here in Dubai and we will continue to issue shares based on the demand that comes from the region,” Pye said in an interview.
The listing will help satisfy demand for investment diversification in the region, as well as environmental, social and governance (ESG) needs, such as for pension funds and family offices, Pye said.
Dalma Capital, a Dubai-based alternative investment firm, was lead arranger for the Nasdaq Dubai listing. Corporate finance adviser 01 Capital and investment firm Razlin Capital, both based in London, advised on the listing and Pinsent Masons was legal counsel for the listing process.
“Today’s secondary listing of existing units from Canada was met with very strong demand, which has validated the need for an additional offering to satisfy the demand from regional investors,” said Zachary Cefaratti, CEO of Dalma Capital, declining to say when that could be.
Pye acknowledged that China’s recent crackdown on mining cryptocurrencies has hit digital currency prices, but he said the timing of that move would help those who bought into the Dubai listing.
“We’re very excited because when we hit an all-time high, our investors and our clients and our friends will have doubled their money,” Pye added.


Backing grows for new IMF COVID and climate fund

Backing grows for new IMF COVID and climate fund
Updated 24 June 2021

Backing grows for new IMF COVID and climate fund

Backing grows for new IMF COVID and climate fund
  • The COVID crisis is expected to leave 47 of the 82 vulnerable countries with gross debt already above levels deemed sustainable.

PARIS: Plans for a new IMF “Resilience and Sustainability” fund that would expand its support to dozens more vulnerable countries gained key international backing on Thursday ahead of crucial meetings.
IMF chief Kristalina Georgieva this month proposed the new trust to allow rich countries to channel some of their new IMF reserves to poor and middle-income counterparts ravaged by COVID or climate change.
“This is something we certainly support” said Lars Jensen, a senior economist on the United Nations Development Programme (UNDP) and the author of a new report on how the IMF’s new funding should be directed.
The UNDP estimates the IMF’s Poverty Reduction and Growth Trust (PRGT), which is also expected to play a key role in a voluntary redistribution of new ‘Special Drawing Rights’ (SDRs) money, is only open to 55 of the world’s 82 most debt-vulnerable developing economies.
The Group of Seven (G7) wealthy nations alone will receive $283 billion of the overall $650 billion SDR allocation. All “high-income” countries will get $438 billion, whereas 75 of the poorest countries will get $62 billion among them.
The COVID crisis is expected to leave 47 of the 82 vulnerable countries with gross debt already above levels deemed sustainable.
Additionally, nine of the 10 most climate-change vulnerable countries are also highly debt-vulnerable developing economies.
“As a possible development objective of an SDR channelling to vulnerable countries, it would be natural to target climate due to its global implications,” Jensen said, adding that the fund could even bulked up by leveraging it in borrowing markets.
G7 leaders have already signaled their backing to redistribute $100 billion of the new SDR money. Georgieva has said that China has expressed interest in participating and that she expected other major emerging economies to do the same.
The IMF’s executive board will meet on Friday on the next steps and finance officials from the Group of 20 major economies will discuss the SDR reallocation issue when they meet in Venice in July.
Scott Morris of the Center for Global Development said funding for the proposed new IMF trust was already earmarked in the US Treasury’s recent budget request to Congress, underscoring Washington’s support.
The US Treasury is working closely with the IMF to explore options and design mechanisms for channelling SDRs to vulnerable countries, one US Treasury official told Reuters on condition of anonymity because of the sensitivity of the matter.
“The IMF’s proposed Resilience and Sustainability Trust is one of the options under discussion,” the official said, without elaborating on other options.
Jensen said he hoped the new fund would also give debt-strained countries who have so far resisted restructuring their debt for fear of losing access to borrowing markets, a safety net to take that step.


Arab share of India’s oil imports hits 25-month low

Arab share of India’s oil imports hits 25-month low
Updated 24 June 2021

Arab share of India’s oil imports hits 25-month low

Arab share of India’s oil imports hits 25-month low
  • To replace Middle Eastern oil, refiners hiked imports from Latin America, the United States and the Mediterranean

NEW DELHI: The share of Middle Eastern crude in India’s oil imports fell to a 25-month low in May, tanker data provided by trade sources showed, as refiners tapped alternatives in response to the government’s call to diversify supplies.
India, the world’s third biggest oil importer, in March directed refiners to diversify crude sources after the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by top exporter Saudi Arabia, ignored New Delhi’s call to ease supply curbs.
Asia’s third-largest economy imported about 4.2 million barrels per day (bpd) of oil in May, just below the previous month but about 31.5 percent higher than a year earlier, the data showed.
The Middle East’s share dropped to 52.7 percent, the lowest since April 2019 and down from 67.9 percent in April, the data showed.
Imports from Saudi Arabia, India’s second-largest supplier after Iraq, slipped by about a quarter from a year earlier, while supplies from the United Arab Emirates, which dropped to No. 7 position from No. 3 in April, fell by 39 percent, the data showed.
This comes after Indian state refiners nominated to lift less oil from Saudi Arabia in May.
Lower purchases of oil from the Middle East dragged OPEC’s share of Indian oil imports to a record low.
To replace Middle Eastern oil, refiners hiked imports from Latin America, the United States and the Mediterranean.
Indian refiners bought higher volumes of gasoline-rich US oil in March, expecting a recovery in local gasoline demand to continue in the months ahead, said Ehsan Ul-Haq, lead analyst for Oil Research and Forecasts at Refinitiv.
Strong demand for light crude saw Nigeria improving its ranking by two notches to become the No. 3 supplier to India in May.
Private Indian refiners Reliance Industries and Nayara Energy, however, boosted purchases of Canadian heavy oil to a record 244,000 bpd, equivalent to about 6 percent of India’s overall imports.
“Indians bought Kazakhstan’s CPC blend and Canadian oil due to attractive discounts in comparison to dated Brent and WTI, respectively,” Ul-Haq said.
Tanker arrival data showed higher imports in contrast to preliminary government data, as cyclones along India’s coast line last month delayed discharge of cargoes.


Dubai jet ski tour named world’s top activity by Tripadvisor

Dubai jet ski tour named world’s top activity by Tripadvisor
Updated 24 June 2021

Dubai jet ski tour named world’s top activity by Tripadvisor

Dubai jet ski tour named world’s top activity by Tripadvisor

DUBAI: A jet ski tour of Dubai has emerged as the world’s top tourism experience according to Tripadvisor.
The company announced its annual list of Travelers’ Choice “Best of the Best Things To Do Awards,” which is based on data from January to April this year.
The jet ski tour which gives travelers panoramic views of Dubai’s iconic buildings and beaches beat competition from a long list of rival activities from around the globe, from white water rafting in New Zealand to paragliding in Turkey.
Tripadvisor noted this year’s list was largely dominated by outdoor and water-based activities, as travelers became more excited about going outside after months of lockdown.
The UAE has been investing heavily in activity-based tourism with Dubai seeing greater competition from other emirates including Abu Dhabi and Ras Al Khaimah which recently revealed 20 new outdoor attractions.