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).
Unexpectedly high costs and lack of profitability of the Phantom III chassis.
| Identifier | ExFiles\Box 148\5\ scan0110 | |
| Date | 25th August 1936 | |
| To Hs.{Lord Ernest Hives - Chair} X300 Hs{Lord Ernest Hives - Chair}/Rm.{William Robotham - Chief Engineer}10/KW.25.8.36. Chassis Costs. It is disconcerting that we are not going to make profits on the Phantom III car, particularly having regard to the fact that we have always previously been told that the Phantom II was the most profitable chassis in production. The most depressing thing is that this information does not become available until we are fully committed in production and have sold three or four hundreds of cars. In a commercial enterprise where the main objective is to make profits, this seems to be basically wrong. It is difficult to believe that with 25 years of experience in manufacturing motor cars we cannot have a more accurate idea of where we are going with regard to cost than we have had on the Ph.III. On the face of it, if we could have put the energy which we spent on the Ph.III into getting costs down on the 20/25 and Bentley, we should have saved a large sum of money. It may be said that in evolving the Ph.III the same methods were used that have been previously employed, and we have always in the past succeeded in creating profits for the shareholders. We believe, as we have previously said, that the reason why we are worse off on the Ph.III than previously is because we have got a completely new motor car. In order to get it into the customers' hands in a satisfactory condition in the time available, cost has been largely discounted. To give an example, for which the Exptl. Dept. are almost entirely responsible - Exhaust System. We are fully aware that the exhaust system on the Ph.III costs far more than it need. However, until the present we have had neither the cars nor the personnel to devote to it to put this matter right simply because we have had 50 other new parts to develop at the same time. We say that the basic fault here is that we should be in such a position that there is no alternative but to produce a completely new car at short notice. This is one aspect of excessive costs. | ||