Rolls Royce’s aircraft engine division might be hurting the brand

3-Series | November 23rd, 2015 by 4
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Public confusion over the relationship between Rolls Royce Motor Cars and Rolls Royce Plc – maker of aircraft engines – is at its highest levels. …

Public confusion over the relationship between Rolls Royce Motor Cars and Rolls Royce Plc – maker of aircraft engines – is at its highest levels. RR CEO, Torsten Müller-Ötvös, is concerned over the recent turmoil at the jet engine division which is suffering from financial problems.

“We know how famous the brand is, and as much as we have done to make clear that they are separate, for many people it is hard to see the difference,” Müller-Ötvö says. “When people read about turmoil at Rolls-Royce in a newspaper it causes concern.”

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While Rolls Royce Motor Cars is owned by BMW, the jet engine unit is a separate listed company and a member of the FTSE 100. Fears of damage to the car maker’s brand have grown as the engineering giant has churned out a string of negative updates.

The shares have plunged more than 60pc as a result, wiping more than £10bn off the company’s market value.

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At the same time, the car luxury division has been growing year-over-year with over 4,000 cars sold in a calendar year – a record for the British marque. When the aircraft and marine engine-maker first hit problems, Rolls-Royce Motor Cars issued a press release spelling out the difference between the two.

Mr Müller-Ötvös expressed sympathy for the plight of Rolls-Royce Plc, but warned that he was “determined to protect” the car maker after having “spent a great deal of time and money effectively resuscitating our part of the brand”.

He added: “It is not supporting our business in the proper way and we are watching carefully.”

[Source: Telegraph]

4 responses to “Rolls Royce’s aircraft engine division might be hurting the brand”

  1. Vanja Kljaic says:

    The issues with Rolls Royce jet engines division are just one big contract away of being completely negated. I wouldn’t really look at it as an issue, but the public perspective can be a worrying thing from time to time in such situations.

  2. Giom says:

    You’d think that people in the RR buying realm would know about these things – generally they’re business people, right?
    My personal fairy tale scenario would be when BMW buys out RR PLC and in so doing returning BMW to their roots, namely, aircraft engines. Then do for PLC what it did for RR motorcars… ie, profitable. Well, one can dream…

    • Matt Stokes says:

      Sounds like a great idea, but that’d be a high risk and expensive option for BMW, and a situation they only divorced themselves from back in 2000 when BMW Rolls-Royce Aero Engines Gmbh became Rolls-Royce Deutschland. RR PLC has an order book of £70+billion, which will make them expensive to buy, however that only yields a small percentage of BMW Groups current annual revenue, and a fraction of it’s annual profits – and what happens as the current order book runs dry? I don’t know how much it would cost them to take over RR PLC, but I’d imagine the good they could do by investing that in the Automotive sector would be far more profitable, and in the end, better for those that buy and drive the cars.

  3. Michael Christopher Frazier IV says:

    maybe the idiots of the world would tie the two together, usually the ones that couldn’t afford the rr motorcars anyway… so why would the opinions of the idiots matter?

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