Sales boom for Rolls-Royce in Saudi Arabia

The Rolls-Royce Phantom VIII 8. The long-standing flagship of the Rolls-Royce range, the Phantom is in high demand in the Middle East region although the star of 2019 was the luxury four-wheel-drive Cullinan. (Shutterstock)
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Updated 09 January 2020

Sales boom for Rolls-Royce in Saudi Arabia

  • The US is the biggest global market for Rolls-Royce with about 30 percent of sales

DUBAI: Saudi Arabian car connoisseurs are buying the new Rolls-Royce Cullinan SUV in their droves, according to record financial figures from the luxury car manufacturer.

Rolls-Royce, announced a 25 percent jump in sales across the world in 2019 to the highest level of sales in its 116 year history. But the increase in the Middle East was significantly higher at 29 percent.

Saudi Arabia is the second largest market in the region after the UAE, and Torsten Muller-Otvos, the global chief executive of Rolls-Royce, said that sales in the Gulf reflected the fact that regional economies were succeeding in their strategy of reducing dependence on the oil price.

“We saw it in the beginning that when oil prices slumped we also saw sales a bit weaker, due to the fact that the oil price fueled the economy of the entire Middle East. But now it is understood that oil cannot be the only driver of economics in these countries, and for that reason it’s normalizing.

“It’s a fact that oil prices are now lower, but people are getting used to it. Businessmen and women are getting accustomed to it. It’s the new normal and the entire luxury goods business is performing pretty well over last year,” he said.

The star of the 2019 performance was the luxury four-wheel-drive Cullinan, which sells for about SR1.8 million ($480,000) in its basic form, through most Rolls-Royce customers spend a lot more on customizing their vehicles through the Rolls-Royce “Bespoke” unit.

Muller-Otvos said that globally about 40 percent of the 2019 sales increase was due to the Cullinan, introduced just over a year ago, but the proportion was bigger in the Arabian Gulf region for the Cullinan.

“The Middle East is very strong on SUVs, and the Cullinan is a recipe for success there. Customers have told me that we have hit the nail on the head with the car,” he said.

The UAE — with high-selling dealerships in Dubai and Abu Dhabi — is the biggest market for Rolls-Royce in the Middle East, followed by Saudi Arabia, while Qatar and Kuwait compete for the third place.

The US remained the biggest global market in 2019, with about 30 percent of sales, followed by China with about 25 percent. 

The Middle East market share was more than 10 percent of the global total.

The long-standing flagship of the Rolls-Royce range, the Phantom, was also in high demand in the region, he said. The ten-year-old Ghost is being replaced by a new version, which will be on the market toward the end of the year.

Muller-Otvos said that Rolls- Royce makes a “meaningful contribution” to BMW finances, and is funding a big investment program at its Goodwood, UK, base, to prepare for the advent of electric Rolls-Royce models in the coming decade as well as to increase its capacity in bespoke engineering and design.

He added that the average age of a Rolls-Royce buyer had fallen significantly over the past decade, down from 56 years to 43 years, as the marque increases its appeal to women and young high-net-worth individuals.


Indonesia hails ‘historic’ $22.9bn mega-investment deal with UAE

Updated 17 January 2020

Indonesia hails ‘historic’ $22.9bn mega-investment deal with UAE

  • Leaders agree initial $6.8bn projects plan, including initiative to build a replica of Abu Dhabi grand mosque in Java

JAKARTA: Indonesia’s business community on Thursday welcomed the UAE’s pledge to pump tens of billions of dollars into a wide range of key sector projects.

President Joko Widodo and his entourage secured an overall $22.9 billion deal during an official two-day visit to Abu Dhabi earlier this week covering the fields of energy, logistics, port construction, mining, and agriculture.

It was also revealed that the delegation brokered a UAE commitment to assist in establishing an Indonesian sovereign wealth fund.

At a bilateral meeting, the Indonesian leader and the Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed Al-Nahyan witnessed the signing of 11 business accords between the two countries. Indonesia’s Minister for Foreign Affairs Retno Marsudi said the UAE had committed to investing $6.8 billion out of the total agreed spending package into the initiatives.

Luhut Pandjaitan, Indonesia’s chief minister for maritime affairs and investment, described the UAE’s pledges as possibly being “the biggest deals in Indonesia’s history, secured with the UAE within only six months,” referring to the crown prince’s visit to Indonesia last July.

While most lauded the deal, some Indonesian business leaders remained cautious over the long-term prospects for the projects.

Fachry Thaib, head of the Middle East Committee and OIC at the Indonesian Chamber of Commerce, said the schemes could trigger a wide-ranging domino effect through job creation and other business ventures.

“The government needs to have a strong lobbying team that can follow up these deals and push them into investment realizations. We have had such commitments from other Gulf countries, but there was no further lobbying and the pledges were hardly realized,” he told Arab News.

Zaini Alawi, a businessman who exports and imports between Indonesia and the Middle East, said: “It would set a good precedent to attract other Gulf countries to invest here if Indonesia shows it could aptly manage these investment deals.”

Director for Middle East affairs at Indonesia’s Foreign Ministry, Achmad Rizal Purnama, told Arab News that the $6.8 billion commitment from the UAE was only the first phase of a long-term program.

Widodo and the crown prince also witnessed the signing of five government cooperation agreements in health, agriculture, Islamic affairs, and counterterrorism.

Indonesian Minister of Religious Affairs Fachrul Razi said one of the main aspects of the cooperation agreement would be the promotion of religious moderation and raising awareness of the dangers of extremism.

FASTFACT

The UAE has pledged to assist in establishing an Indonesian sovereign wealth fund.

Noting that the UAE had pledged to fund the construction of a replica of the Abu Dhabi grand mosque in Solo, the president’s hometown in Java, the minister pointed out that the grant was part of a commitment by the two countries to establish a mosque that welcomed all people and served a pivotal role in promoting the middle path of Islam.

Riza Widyarsa, a Middle East expert at the University of Indonesia, told Arab News that the cooperation deal could help more Indonesians to understand that not all countries in the Middle East observed conservative Islam. “They are also very active in countering religious extremism and radicalism,” he said.

In addition to the multi-billion-dollar projects, Purnama said Indonesia had also secured the UAE’s commitment to assist in establishing an Indonesian sovereign wealth fund into which the UAE, the US International Development Finance Corporation, and Japan’s SoftBank would inject funding.

And according to Pandjaitan, the UAE had pledged to be “the biggest contributor” to the fund.

The fund would be used to finance Indonesia’s ambitious infrastructure development projects and the construction of its proposed new capital in East Kalimantan, a relocation that has been estimated to cost $33 billion and of which Indonesia could only afford 19 percent.

He said all parties involved would meet in Tokyo soon to set up the structure of the fund and to finalize the plan, which the government expected to launch by mid-2020, a year after the crown prince proposed the idea to Widodo.

“This could be the first time that big capitalists work together in a single project,” Pandjaitan added.