Rolls-Royce’s Leon Li on Becoming ‘Younger and Cooler’ for Chinese Millennials

Perhaps more than any other brand in the world, Rolls-Royce is the very definition of luxury, craftsmanship, and heritage—iconic in every sense of the word, a synonym for exclusivity and lavish comfort, as well as the paragon of British bespoke saloons and coupés. And as China luxury sales stabilize from a 2015 downturn, so too do the sales of the most legendary automotive marquee, which, like most, hit some sizable bumps in the road. In fact, more than stabilizing, Rolls-Royce Motor Cars, China is rebounding.

Leon Li, director of Rolls-Royce Motor Cars, China, is the man responsible for the aforementioned and rather consequential heritage in mainland China. However, his job consists of far more than simply safeguarding a luxury legend. He is also charged with the automaker’s sales and steering both solidly into the future.

Li was appointed director of Rolls-Royce Motor Cars, China in the fall of 2014, which is not an enviable start date. However, Li, who joined BMW Group in 2007, was well primed to take command of one of the most influential luxury brands of the past century. Upon joining BMW, Li took charge of sales management in multiple regions and led the Taiwan office of the Import Business Unit. He was later appointed Vice President of Sales, BMW North China. Prior to joining BMW, Li worked for Lexus China and two other market research companies, respectively.

In this interview with Jing Daily columnist Aaron Sigmond, conducted over email, Li discusses Rolls-Royce’s outlook for China, upcoming releases, luxury pop-ups, and why young Chinese clients are obsessed with personalizing their cars.

In 2014, China passed the United States to become Rolls-Royce’s biggest market, but sales then plunged 54 percent the next year, boosting the United States back to the top spot. Given that sales are good overall—in 2016, Rolls logged the second-most sales in its then 113-year history—does the Chinese market concern you?

In 2014, the China market cooled off not only for us, but for most of the international luxury consumer brands. What we currently see is that the market is coming back and stabilizing. Of course, Rolls-Royce has full confidence in the China market and firmly believes that it has a bright future. Even in the most difficult year, our market share remained number one in the super luxury segment of cars over RMB 4 million.

However, Rolls-Royce is not a volume brand—sales volume is not our priority. The value of a Rolls-Royce lies in its rarity—neither us nor our car owners would like to encounter a Rolls-Royce car on every street corner. This is a signature of our brand.

That said, China sales in 2016 were 23 percent higher than the year before. Is that trend continuing thus far in 2017? Are you confident you can recapture the heady numbers of 2014?

Yes, we achieved 23 percent growth in China in 2016. And in the first quarter of 2017, Rolls-Royce maintained its strong growth momentum in both China and the global market. We continue to plan for long-term sustainable growth and believe that 2017 will be a strong year for Rolls-Royce.

[In part, this growth is due to] the Rolls-Royce product line-up becoming younger and cooler, by introducing exciting products, such as the Dawn convertible and the more assertive and darker Rolls-Royce, Black Badge—which perfectly meet the demands of current Chinese customers, who we actively talk to via social media—and experiences including pop-up stores. Rolls-Royce is the first and only super luxury auto brand to offer a pop-up store in China.

Dawn by Rolls-Royce (Courtesy Photo)

Dawn by Rolls-Royce (Courtesy Photo)

What’s the most popular Rolls model on the mainland? Was the Dawn convertible, the most recent model release, well-received?

Sales are driven by the enduring success of the Wraith and Ghost family, while the Phantom remains the company’s pinnacle product globally, reaffirming its status as the world’s most desirable super-luxury good.

Yes. Dawn is popular among young Chinese customers. Almost 100 percent of the Dawns sold in China are bespoke. Many of our customers have an overseas education background and some of them are players in international business. Their tastes and views are very international which makes them willing to try challenging bespoke designs. We have seen many inspiring bespoke colors on Dawn. We specifically chose Auto Shanghai 2017 for the Asian premiere of “Dawn – Inspired by Fashion”.

Dawn's premiere at Auto Shanghai 2017 (Courtesy Photo)

Dawn’s premiere at Auto Shanghai 2017 (Courtesy Photo)

Unquestionably, the 2018 model year looms large for Rolls-Royce globally, with the release of the eighth-generation Phantom, followed by the ultra-luxury Cullinan SUV. What do you expect of the Phantom in particular, both on the mainland and in Hong Kong?

We will launch the brand-new eighth-generation Phantom this year. It is based on an all-new aluminum architecture, which will be applied to all new Rolls-Royce models in future. The eighth-generation Phantom keeps the most classic elements of a Rolls-Royce, yet elevates our cars to a new peak. To some extent, the Phantom is the personification of Rolls-Royce, especially in China. Whether it is in mainland China or Hong Kong, or the global market, we have full confidence the brand-new Phantom will excel.

As for the Cullinan, we plan to officially introduce it to the market next year. For the time being, we are describing it as an all-terrain, high-chassis Rolls-Royce car.

Likewise, what are your expectations for the Cullinan, which will compete directly with the Bentley Bentayga?

Some people say Rolls-Royce entered the SUV market late. It is important that Rolls-Royce never rushes into the market. We make sure everything is ready, and that preparation process is time-consuming. So we work on our own time at our own pace, and do not rush to respond to other manufacturers.

Cullinan was designed for two reasons: The first is to meet customer demand, and the second is to promote our brand genes of self-discovery, challenging tradition, and adventure. Charles Rolls, our co-founder, and many early Rolls-Royce owners, crossed deserts and mountains, conquering dangerous terrain off the beaten track. We hope the Cullinan can release the full potential of these inherent Rolls-Royce genes that have not yet been fully tapped.

How many showrooms does Rolls-Royce maintain on the mainland and in Hong Kong? Do you have plans to expand geographically in the near future, or is your coverage of the country ideal for the time being?

Currently, we have 22 dealers on the mainland. For a super-luxury brand, the operation of our dealer network is the best in the industry. Our inventory in China is very low and most sales are made by commission. We only produce a car when a patron commissions one, and seek to guarantee our dealer partners’ profitability. As for future sales network expansion, we will take account of the overall development of the super-luxury car market in China and future product plan.

At the 2017 Shanghai International Automobile Industry Exposition, Rolls-Royce showcased its increasingly “bespoke” capabilities, through which buyers can customize their vehicles to an unprecedented degree. Is this feature more important in China than in the rest of the world?

Bespoke is Rolls-Royce.

And as such, is very important around the globe, including in China. Demand for our premium bespoke cars is now growing rapidly across the world. However, the main reason for the increasing demand for bespoke from Chinese customers is that more and more Chinese customers come to have a strong perception that every Rolls-Royce car is a rare, precious work of art. To this end, the Rolls-Royce brand has introduced new models that are appealing to the emotional resonance and lifestyle of our Chinese patrons. And the craftsmen in our Goodwood headquarters build every Rolls-Royce with the intent to ensure ultimate comfort and the distinctive, “magic carpet” driving and riding experience unique to a Rolls-Royce.

Final thoughts?

Today, Rolls-Royce cars are not just a conveyance, but an extension of the owner’s lifestyle. A Rolls-Royce is a work of art on wheels. For many Chinese, a Rolls-Royce is more than just a car, but represents a higher realm and spirit.

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CEO Corner, Consumer, Market Trends