Rolls-Royce Counting on Wraith Model to Lift Russia Sales

Rolls-Royce Motor Cars Ltd., the ultra-luxury carmaker owned by Bayerische Motoren Werke AG (BMW), is counting on its sporty Wraith model to boost sales in Russia, even as lawmakers debate raising the high-end car tax.

The British maker of the $400,000 Phantom sedan, which sells 100 cars a year in Russia, is looking to raise sales again after doubling the number of cars sold in 2009 with the introduction of the Ghost, Chief Executive Officer Torsten Mueller-Oetvoes said in a June 7 interview in St. Petersburg.

Rolls-Royce is trying to gain a deeper foothold in the former communist country with a dealership in Russia’s second-largest city after opening two in Moscow. Demand should outweigh an effort by lawmakers to raise the tax for cars costing more than 5 million rubles ($154,700), Mueller-Oetvoes said. Rolls-Royces in the country start at 13.9 million rubles.

“Russia is very attractive because you see here a lot of individuals that have money,” Mueller-Oetvoes said. “A lot of entrepreneurs are in Russia building their own businesses. People are perfectly prepared to spend money for luxury goods.”

Russian lawmakers gave preliminary approval to a tax increase for luxury cars on May 21 in the first of three readings. The tax rate should be at least doubled after Jan. 1.

Car Sales

Sales of new cars in Russia dropped 8 percent in April to 245,334, compared with the same month a year earlier, while demand for luxury brands is growing, according to a survey by Association of European Business.

Sales of Volkswagen AG (VOW)’s Porsche grew 24 percent, while sister brand Audi sales climbed 11 percent. Daimler AG (DAI) sold 18 percent more Mercedes-Benz cars than in April of 2012.

Rolls-Royce’s management is not satisfied with sales on the European markets except the U.K., Germany and Switzerland, Mueller-Oetvoes said. The company quit its business in France, while Spain is no longer a big market for Rolls Royce due to the recession, he said.

“We haven’t many markets worldwide with three-digit annual sales,” Mueller-Oetvoes said. “Just U.S., China and U.K. and Russia as the fourth. We sell 20-60 cars per year on other markets.”

To contact the reporter on this story: Anatoly Temkin in St. Petersburg at atemkin@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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