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).
Business case for producing a smaller car model versus the existing larger car.
| Identifier | WestWitteringFiles\E\November1920\ Scan20 | |
| Date | 1st November 1920 | |
| To HR. from R.{Sir Henry Royce} -2- R4/G1/11/20 Contd. ignition system, or there might be six cylinders instead of 12, three speeds instead of four, and so forth. It will also be seen that with two models the output is larger, and possibly the standing charges less, and that we might be satisfied with a less percentage of profit on the smaller article as a matter of policy. You will remember that this idea was conceived when the cost of production in England promised to be more nearly the pre-War cost of production. Therefore We should be capable of competing for the very highest class of work with a thoroughly high class article though of smaller dimensions, in a very large market. Owing to the enormous increase in the cost of production in England it appears to me that our possibilities are much less. Also, it should be borne in mind that we should probably have to make some sacrifice as regards percentage of profit etc. if we found that the Derby Works were producing too large a number of the big car. So that personally I do not wish to abandon the idea until all the points are considered, and put before the directors for them to decide. It seems manifest to me that a small output at Derby will not allow the R.R. company to exist. So that supposing there is not sufficient market for the big car, or that we shall be spoiling our markets by flooding the big car markets, the prospects of aero work is limited, our best field appears to be in the smaller car market. Owing to our reputation we ought to be able to sell a high quality small article at a figure above what it costs. It would be dealt with in the same Sales, Design, and Test organisations and so contribute towards the standing charges, which would otherwise on a small output ultimately become too large. (Contd.) | ||