Frankly Speaking: Saudi Arabia can be number one market for Rolls-Royce, says carmaker’s CEO Torsten Muller-Otvos

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Updated 27 December 2021

Frankly Speaking: Saudi Arabia can be number one market for Rolls-Royce, says carmaker’s CEO Torsten Muller-Otvos

  • With more women and young people drawn to the brand, Saudi Arabia is becoming a top Middle East market for Rolls-Royce
  • CEO Torsten Muller-Otvos says Rolls-Royce is a “frontrunner” in the electric car transition among ultra-luxury brands

DUBAI: Big changes under way in Saudi Arabia could turn the Kingdom into the top market in the Middle East for Rolls-Royce cars, Torsten Muller-Otvos, the elite motor company’s chief executive, told Arab News.

“Saudi obviously is a big market. I see even more potential to come from Saudi in the years to come because the market is currently also opening up and is growing,” said Muller-Otvos, citing the royal decree of 2017 that granted Saudi women the right to drive and obtain driving licences for the first time.

“We see now the first female drivers in our cars in Saudi and for that reason I foresee we might in a couple of years talk about this being a massive, great market. It might even one day be the number one market in the entire region. Who knows? Potential-wise, it’s possible, but it depends on some other aspects,” he added.

Muller-Otvos delivered his forecast on Frankly Speaking, the series of video interviews with thought leaders in the Middle East and the world.




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In the interview, the boss of the British-designed but German-owned luxury car manufacturer set out Rolls-Royce’s road map to go completely electric, the effects of the COVID-19 pandemic on global and regional sales, and the effect of rising oil prices on elite car sales.

He also talked about some of the more extravagant custom features regional customers want on their cars.

The Rolls-Royce mark, founded in Britain 115 years ago but owned by BMW of Germany since 2003, is the ultimate status symbol in motoring, from California to Shanghai, but with a particular appeal among Arab buyers.

The transition currently under way in the global transportation market, with the surge in electric vehicle sales, has impacted Rolls-Royce and other petrol-engine manufacturers. Nevertheless, Muller-Otvos says Rolls-Royce is leading the way in electrification among the ultra-luxury market.




A vintage Rolls-Royce is shown during the exhibition in the King Abdullah II car museum in Amman, Jordan  Feb. 18, 2016. (Shutterstock)

“I would even say we are front-runners,” he said. “I mean, we are not comparing ourselves with what I would call the ‘normal’ automotive business. We are high in luxury. And you might also know that we are the very, very first ones in the ‘ultra-high luxury’ segment worldwide.”

The first electric Rolls-Royce, the Specter, will be available in the Middle East from 2023. “I can tell you Spectre will be a stunning, remarkable Rolls-Royce,” Muller-Otvos said. “We also took our time because, first of all, it needs to be a Rolls-Royce, so that means no compromises around luxury experiences for our clients worldwide, and then second comes, obviously, electric.”

The Spectre — which motoring pundits expect will cost around $350,000 for a starter-level vehicle — will play to Rolls-Royce’s traditional strengths. “It is also silent. We are not defining ourselves with loud engine noises or exhaust noises and for that reason I think it’s a perfect fit for the brand,” he said.




Rolls-Royce has announced that its first electric car would be made available by 2023. (Supplied)

But there were also commercial and regulatory imperatives for Rolls to get into the electric market. “We also see, worldwide, certain regulations kicking in that might mean in a couple of years you can’t enter city centers any longer without driving electric. And that, of course, would not be great for the brand.”

Elon Musk’s Tesla has so far been the headline grabber in the move to electric vehicles. Now, many traditional car companies in all the big markets are jumping on the “EV” bandwagon. However, Muller-Otvos is confident Rolls-Royce has traditional strengths in the hotly competitive market.

“Rolls-Royce never defined itself purely by the engine. That is not us. That is for other brands. We defined ourselves as the ultimate in luxury. It is about the finest materials, the best craftsmanship. It takes 1,000 hours at least to build one of these beautiful masterpieces,” he said.

Muller-Otvos also believes the move toward electric vehicles fits the shifting demographic of the Rolls-Royce clientele. “I think we will see a trend, step-by-step. Particularly the younger ones are very much attracted to electric propulsion. What we have also learned is that once you’re in an electric car, you are probably not getting back into a combustion car,” he said.

In the past, Rolls-Royce customers were overwhelmingly male, successful business executives, celebrities, or even royalty. That profile is now changing.

“When I started — and I’ve been in the role now for nearly 12 years — the average age of a Rolls-Royce customer was around 56. We are now down to 43. We have massively refurbished the brand, reinvented the brand, rejuvenated the brand. We now have young clients all over the world,” he said.

In the Middle East in particular, more women want to drive a Rolls-Royce. “When I joined, (the client base) was 1 percent female worldwide. Now we are at around 15 percent worldwide, and I think there are more to come, particularly here in the Middle East. You see quite a lot of female drivers behind the wheel. I think in the Middle East, we are talking probably 20 percent or so, and that’s quite a good share,” he said.

A big earner for Rolls-Royce has long been the trend towards customization — what the manufacturer calls the “bespoke proces” — where wealthy customers pay extra for unique features in their cars.

Sometimes, this results in lurid color schemes and outlandish accessories that would horrify Rolls-Royce traditionalists. But Muller-Otvos does not see himself or Rolls-Royce as an arbiter of individual taste.

“Let’s imagine, for a moment, a bright orange exterior and a yellow interior. It might look a little bit odd in central London, but down here in bright sunshine it looks stunning. I think you always need to keep that in mind. The last thing I want to do is judge — with my European taste — international clients. We are not the taste police in Rolls-Royce,” he said.

There was one request for a luxury accessory, however, that went aa bit too far — a request from a wealthy client for a chilled cigar compartment on the dashboard.

“One that was too crazy and was declined was for a humidor on the top panel, and that, unfortunately, wasn’t possible, technically, because we would have lost homologation (regulatory approval),” he said.




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

Rolls-Royce has long held a special place in the Arab world, dating back to the time when Britain’s then-prime minister Sir Winston Churchill presented King Abdulaziz of Saudi Arabia with a custom Phantom model as a post-war gift.

The early stages of the COVID-19 pandemic saw a sharp drop in Rolls-Royce sales, as the Goodwood plant in the UK was forced to halt its production line for two months and deliveries were disrupted.

But that turned out to be the prelude to a rapid acceleration in sales in the Middle East and the wider world once the recovery got under way, matching a global phenomenon that saw all sales of luxury goods grow after the initial shock of lockdown. Muller-Otvos had an intriguing explanation for this.

“Many clients told me they have realized that it is possible that you could die suddenly, and many of them have even seen that up close. That made them think: You only live once, enjoy your life now, don’t postpone it to later days,” he said




The new Rolls Royce Ghost – re-engineered and relaunched in 2020 – is in high demand in the Middle East (Shutterstock)
 

The Cullinan, Rolls-Royce’s first foray into the luxury SUV market, has been in particularly high demand in the Gulf, as has the Black Badge Ghost.

As ever in the region, the fortunes of the oil market continue to determine the strength of the economy — and Rolls-Royce sales.

“The oil price is quite an indicator here for how healthy the economy is and we are very much dependent on how the economy goes,” Muller-Otvos said. “If the economy flies, we fly.”


Weather forecasters warn of more sandstorms coming as dust shrouds Riyadh again

Updated 25 May 2022

Weather forecasters warn of more sandstorms coming as dust shrouds Riyadh again

  • Back-to-back sandstorms blanket region, sending thousands to hospitals with breathing issues

RIYADH: Weather forecasters warned on Tuesday that more sandstorms were on the way after Riyadh was again shrouded in choking dust.

The National Center for Meteorology issued weather alerts for the Saudi capital, extending to the Madinah region and the governorates of Yanbu, Al-Rais and Yanbu Al-Nakhl. There will also be dust storms in AlUla and Khaybar.

“Dust particles in the north, center, and southern and interior regions will persist,” center spokesman Hussain Al-Qahtani told Arab News.

More than 1,200 people this month have gone to hospitals in the Kingdom suffering from breathing difficulties, but the phenomenon is region wide. Severe sandstorms have blanketed parts of Iran, Iraq, Syria and Kuwait for the past month. The storms have sent thousands to hospitals and resulted in at least one death in Iraq and three in eastern Syria.

Sandstorms are typical in late spring and summer, spurred by seasonal winds, but this year in Iraq they have occurred nearly every week.

The Iraqi Health Ministry stockpiled canisters of oxygen at facilities in hard-hit areas.

In Syria, medical departments were put on alert as the sandstorm hit the eastern province of Deir Ezzor.

Iran shut down schools and government offices in Tehran last week as a sandstorm swept the country.

It hit hardest in the southwest desert region of Khuzestan, where over 800 people sought treatment for breathing difficulties. Dozens of flights out of western Iran were canceled or delayed.

For the second time this month, Kuwait International Airport suspended all flights because of the dust. Video showed largely empty streets with poor visibility.

“It’s a region-wide issue but each country has a different degree of vulnerability and weakness,” said Jaafar Jotheri, a geoarchaeologist at the University of Al-Qadisiyah in Baghdad.


Saudi Arabia finalizing extension of $3 billion deposit to Pakistan — finance minister

Updated 25 May 2022

Saudi Arabia finalizing extension of $3 billion deposit to Pakistan — finance minister

  • Mohammed Al-Jadaan says Pakistan is a key ally and the kingdom will stand behind the South Asian nation
  • On May 1, both countries said they would discuss possibility of supporting deposit by extending its term

DAVOS: Saudi Arabia is finalizing the extension of the kingdom’s $3 billion deposit to Pakistan, Saudi Minister of Finance Mohammed Al-Jadaan told Reuters.

“We are currently finalizing extending the $3 billion deposit to Pakistan,” he said on the sidelines of the World Economic Forum in Davos.

Saudi Minister of Finance Mohammed Al-Jadaan speaks at the World Economic Forum in Davos, Switzerland, on May 23, 2022. (WEF/File)

Last year, Saudi Arabia deposited $3 billion in Pakistan’s central bank to help support its foreign reserves.

Al-Jadaan did not offer further details, but on May 1 the two countries said in a joint statement that they would discuss the possibility of supporting the deposit by extending its term “or through other options.”

Pakistan is in dire need of external finances, hurt by high inflation, reserves declining to as low as less than two months’ of imports, and a fast-weakening currency.

Al-Jadaan said Pakistan was an important ally and the kingdom would stand behind the South Asian nation.

Uncertainty over the revival of an International Monetary Fund program has compounded volatility in the economy and markets amid a political crisis since a new government took over last month from ousted Prime Minister Imran Khan.


Saudi low-cost airline announces first domestic flight in kingdom with all female crew

Updated 22 May 2022

Saudi low-cost airline announces first domestic flight in kingdom with all female crew

  • Saudi women have proved themselves in many careers that men dominated for a long time
  • Flight 117, with crew of seven, was co-piloted by Yara Jan, 23, who is youngest Saudi female pilot

JEDDAH: Saudi low-cost airline flyadeal have announced the first domestic flight in the Kingdom with a fully female crew, most of them Saudis.

The announcement was made on the airline’s official Twitter account @flyadeal on Friday: “For the first time in Saudi aviation history! #flyadeal operated the first flight with an all-female crew, the majority of which are Saudis by the newest A320 aircraft. Flight 117, flew from #Riyadh to #Jeddah”

Saudi women have proved themselves in many careers that men dominated for a long time including aviation-related positions.

Flight 117, with a crew of seven, was co-piloted by Yara Jan, 23, who is also the youngest Saudi female pilot.

Jan told Arab News that she was extremely proud to be taking part in such a historic moment in aviation for Saudi women.

“As a Saudi woman trying to lead my country with a proud step it was a moment of pride and joy.”

Jan graduated from flight school in Florida, US, in 2019, and joined Flyadeal a year ago.

She said that being the co-pilot means assisting the pilot in many key role tasks such as navigation and completing many checklists.

Jan is aware of how important this is for young Saudi women.

“Although being a Saudi woman pilot is new, it is not impossible for our generation, especially with the backing that we are receiving from our beloved country and our respected leaders, who have supported me a lot to become the youngest female pilot in a Saudi airline. I will always be pleased to have the chance to make a positive change.”

The number of Saudi female pilots has grown recently. Three names stand out: Hanadi Zakaria Al-Hindi, the first female pilot to fly with a Saudi commercial pilot license; Rawia Al-Rifi the first to fly an Airbus A320 internationally as a civil aircraft from the UAE; and co-pilot Yasmin Al-Maimani, who was the first woman to co-pilot a commercial plane in the Kingdom.


Saudi deputy defense minister, Blinken discuss common vision to ‘confront Iran’s destabilizing policies’

Updated 22 May 2022

Saudi deputy defense minister, Blinken discuss common vision to ‘confront Iran’s destabilizing policies’

  • Prince Khalid, Blinken talk about the role the UN and the international community can play in moving Yemen to peace and development

WASHINGTON: Saudi Deputy Defense Minister Prince Khalid bin Salman met US Secretary of State Antony Blinken in Washington, the Saudi Press Agency reported on Sunday.

During the meeting, the two sides affirmed their countries’ common vision to confront Iran’s destabilizing policies in the region.

They discussed the latest developments in Yemen, with Prince Khalid reaffirming Saudi Arabia’s aspirations for the Yemenis “to reach a comprehensive political solution that would move Yemen to peace and development.”

Both sides reviewed the strategic and historical relations between the Kingdom and the US and ways to strengthen them.

Prince Khalid noted that while the announced truce between the Arab Coalition to Restore Legitimacy in Yemen and the Iran-backed Houthi militia remained positive to a “to a large extent”, there is an important role for the UN and the international community to play.

He said the UN and world organizations need “to put pressure on Houthi militias to open Taiz roads, deposit the revenues of Hodeidah port and engage seriously in peace efforts to move Yemen to security, stability, construction and prosperity.”

Regarding Iran’s destabilizing activities, Prince Khalid and Blinken talked about security and diplomatic coordination “to confront Iranian threats, including dealing with Iran’s nuclear file and its program to develop ballistic missiles, as well as its sponsorship of terrorism.”

Prince Khalid also met US Deputy Secretary of State Wendy R. Sherman. During the meeting, they discussed various topics of common interest and continuous cooperation on efforts to maintain security, peace and stability in the region and the world.

The two sides further “reviewed developments the Kingdom is witnessing within the framework of its Vision 2030, commending the cooperation and dialogue between the two countries on the basis of mutual respect and non-interference in internal affairs.”

Prince Khalid welcomed US affirmation of the Kingdom’s support in developing its military capabilities and meeting its defense needs.

The Saudi deputy defense minister also met US Special Envoy for Yemen Timothy Lenderking and discussed the latest developments in Yemen.

“I affirmed to him the Saudi-led coalition’s backing of the Yemeni Presidential Leadership Council and its supporting entities, and our aspirations for reaching a comprehensive political resolution to the crisis that will lead Yemen into peace and prosperity,” Prince Khalid said in a tweet.

Prince Khalid and his delegation began a series of meetings with key US officials last Tuesday under the US-Saudi Strategic Joint Planning Committee to review the Saudi-US partnership, and present and future strategic military and defense cooperation between the two countries.

Prince Khalid had earlier met White House National Security Advisor Jake Sullivan, Secretary of Defense Lloyd Austin, and Under Secretary of Defense for Policy Colin Kahl, among others.

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How Saudi Arabia can become the vanguard of sustainable tourism

Updated 22 May 2022

How Saudi Arabia can become the vanguard of sustainable tourism

  • An agreement with Jamaica puts resilient tourism at the heart of the industry’s post-pandemic recovery
  • The pandemic highlighted the vulnerability of tourism not only to pandemics but also extreme weather

LONDON: Saudi Arabia is stepping up its efforts to become the vanguard of a UN pledge to develop a sustainable model of tourism after the sector’s levels of resilience were pushed to breaking point by the pandemic and new dire warnings of tourism’s environmental footprint emerged.

Addressing the UN General Assembly on May 6, Saudi Arabia’s Minister of Tourism Ahmed Al-Khateeb said lessons about tourism’s vulnerability to sudden, unexpected events must be taken from the pandemic — which cost the sector 62 million jobs worldwide — and changes made.

“COVID-19 highlighted the vulnerability of the sector, not only to pandemics but also to the effects of extreme weather, so addressing climate change must be at the heart of building a more resilient tourism, and there is no resilience without sustainability,” he said.

“We must work collaboratively, putting sustainable, resilient tourism at the heart of inclusive recovery. Only by doing these things together will we ensure better and more resilient futures for the millions around the world reliant on tourism.”

A partial view shows an ancient Nabataean carved tomb at the archaeological site of Hegra, near the northwestern Saudi city of AlUla. (Photo by 

The UN’s World Tourism Organization (UNWTO) welcomed the Saudi efforts, noting that the Kingdom’s Vision 2030 has already provided the blueprint for a “transformative and deeply ambitious” economic strategy, and could do the same for tourism.

A spokesperson for the UNWTO told Arab News: “This ambitious plan aims to reshape the social and cultural landscape, accelerating growth through strategic investment, new industries and leadership.

“It is an opportunity to bring Saudi Arabia’s heritage, culture and hospitality to the world; and deliver on climate and sustainability goals. Properly managed, tourism can play a key role in achieving this vision.”

Scientists have said CO2 emissions from tourism will increase by 25 percent by 2030 compared to 2016 levels, which if left unaddressed could be a bullet for the sector as visitors begin to factor in the impact, and morality, of climate change on their destination choices.

Signaling the Kingdom’s intent to become the shepherd to sustainability, Al-Khateeb and his Jamaican counterpart, Edmund Bartlett, signed earlier this month a memorandum of understanding to collaborate on developing sustainable and resilient tourism between the two countries.

Part of the agreement also included determination to not only embrace the UN 2030 Agenda for Sustainable Development but to lay out a blueprint that can be rolled out globally for a sustainable model of tourism.

The Taif rose season draws visitors from Saudi Arabia and beyond. (AN photo by Huda Bashatah)

Although firm details on the blueprint have yet to emerge, the UNWTO spokesperson noted that policymakers are “best placed” to play a central role so long as their policies include aims to reduce environmental impacts of consumption and production patterns.

“National tourism planning is a well-established practice among national authorities with national tourism policies covering on average a time frame of 10 years and addressing the same thematic areas across regions,” the spokesperson added.

“Aspects such as human resource development, investment, marketing and promotion, employment, product development and diversification have been factored into the policies as these are relevant aspects for the sustainable economic development of tourism.”

Jonathon Day, associate professor and Marriott School of Hospitality and Tourism Management graduate program director, applauded the Kingdom’s “ambition and commitment,” believing it could become a leader in sustainable development.

“Tourism developed sustainably has the potential to contribute substantially to sustainability challenges faced by Saudi Arabia and the world, and I’m sure that through tourism Saudi Arabia can join the destinations leading in sustainable development,” Day told Arab News.

“The Kingdom has the resources to invest in infrastructure to support sustainability goals and knows that tourism that doesn’t adopt the principles of sustainability can make sustainability issues worse. It requires commitment to achieve positive outcomes.”

Day is not alone in seeing Saudi Arabia’s financial resources as key in any effort it may make to lead the way in green tourism, with Prof. Willy Legrand of the International University of Applied Sciences believing it “would translate” in attracting talent and developing policy.

AlUla, home to Saudi Arabia’s first UNESCO World Heritage Site, is at the heart of the Kingdom’s tourism ambitions. (Courtesy: Royal Commission of AlUla)

“Not only this, the resources allow the country to develop and implement state of the art (existing) solutions as well as being a pipeline for the testing of new solutions to tackle some of the greater tourism challenges,” Legrand told Arab News.

Architect and sustainable tourism consultant Amine Ahlafi said that while Saudi Arabia had only recently opened for tourism more broadly, it was important to remember it had a rich history of religious tourism, and this was something it could learn from.

Anywhere from 2.5 million to 9 million pilgrims travel to the Kingdom each year, Ahlafi told Arab News that this results in around 15 million plastic cups being used to cater to the water needs of everyone traveling.

“You can of course use technology to recycle all the disposable cups, but sustainable tourism should be about finding ways to raise awareness so that we don’t have to rely on technology,” he said.

“As for developing new tourism, I think they should promote the desert potential of tourism as they can market it as a very interesting place for sustainable tourism — which does not mean they have to reduce the quality.

“We can do luxury combined with sustainability and not in a greenwashing way with the design of luxury desert camps that optimize the natural resources, the sun and the wind for energy.”

Ahlafi said a blueprint would need to be predicated on pushing technology and the habitat you find yourself in. “Technology is the tool, not the solution, the solution is building to suit the environment, not trying to have the environment suit you.”

Legrand said the Kingdom’s capacity to achieve its aims would depend on a “declaration of transparency” in which it not only set out its goals but communicated actions undertaken and results achieved.

Day said it was also important to construct the blueprint not as a series of steps that would work for every country but rather to realize it as a list of questions that all countries could ask of themselves.

“Sustainability and sustainable tourism are ‘wicked problems,’ which means there are many things that need to be done, and it requires many organizations and parts of government to work to achieve common goals,” Day said.

“And while there are a common set of tasks, each destination will have different priorities. So, the questions may be the same — but the answers may be different. For instance, Saudi Arabia probably will focus on water conservation more than some destinations.”

Legrand agreed that the Kingdom’s ability to produce a global blueprint would depend on its ability to recognize that there would be “no one size fits all” approach, but rather a series of questions and inclusion of all stakeholders in the process.

He suggested the questions could include: What are hoteliers’ views on sustainability? Are the restaurateurs capitalizing on local agriculture? Are local communities involved? What are the challenges for these different actors? Are the destination marketers aware?

But he also noted that there were “clear, key topics” that would need to be addressed in a global, universalized manner, not least of which is the elephant in the room: Long-haul air travel.

“Long-haul travel remains a major challenge on the emission front and will remain so for the years to come, although airlines are making progress both in terms of efficiencies and fuel technologies,” he said.

“Transparency at the booking stage is critical to make the right decisions about a trip, here Travalyst and its many members are making progress in providing travelers with that information, such as the carbon footprint of specific airline routes, for example.”

Both Day and Legrand agreed that for Saudi Arabia to meet its ambitions as the vanguard in a push towards sustainable tourism, the country would need to hang its efforts around the UN’s 17 Sustainable Development Goals for industry, not least “collaboration and cooperation.”

They face many challenges, foremost of which is improving citizens’ trust in state institutions.

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