From the Rolls-Royce experimental archive: a quarter of a million communications from Rolls-Royce, 1906 to 1960's. Documents from the Sir Henry Royce Memorial Foundation (SHRMF).
Sales strategy, pricing, and manufacturing costs for the U.S.A. market.
| Identifier | ExFiles\Box 19\4\ Scan242 | |
| Date | 1st January 1931 | |
| -3- the U.S.A. market. The whole sales organisation is there waiting to handle this car. I consider it is very possible that if we can sell the 25 HP. car at a reasonable price, say just under £2000, in U.S.A. it would help even the sale of the big car. The fact that a R.R. car could be obtained at a reasonable price would remove the ridicule of the high price from R.R. cars in U.S.A. The question of reduction in price of the cars was discussed several times and there was unanimous conclusion that the quality must not be sacrificed for cost. They pointed out that they considered in some parts our design was extravagant and that the same result could be obtained with much less cost. In this connection they pointed out that the method we had adopted of left-handing the Phantom ll might be considered extravagant. They pointed out that all U.S.A. makers made right-hand and left-hand cars with very little change in parts, whereas in our case we made practically a new car even down to the battery which was special for the left-hand. I pointed out that on the question of reduction in price the whole car must be considered and it would be no use us struggling to get down our manufacturing costs on the chassis if the effort was wasted on body costs and selling costs. At the New York Show we proved that the Brewster costs of bodies were very high compared with some of the other makers who are producing bodies in batches of twenty. Springfield's reply to this was that when they established the coachwork at Springfield they would affect considerable economies but if they still found that it was more economical they would not hesitate to buy bodies from outside. Another point which stands out in costs is the £540 which is paid in duty on Phantom ll cars. This is a dead loss to both companies and the customers. Springfield have had an expert to go over the question of importing parts and a copy of his report is attached. The nicest way is undoubtedly to export the complete chassis, but if it is proved that the customer will not pay the price then we must be ready with an alternative scheme, because even if R.A. Inc. did not exist and we were selling cars in U.S.A. ourselves we should have to explore all avenues to get the price of the complete car down so as to increase the volume of business. There are certain parts like wire wheels, for instance, which if we take into account the duty paid on the Dunlop wheels they could be obtained at less than half the price in U.S.A. and I consider | ||