Tuesday, October 09, 2012

How the Rolls Royce Competes

In using Us presidential campaign parlance, I care for the 47% but also admire the 1% for their justly earned income. Seth Stevenson puts out a very detailed article in Slate Magazine in which he describes the super-luxury vehicle with the name Rolls Royce. In that piece, he describes the features of the vehicle but more impressive is the workmanship that distinguishes it from other equally good vehicles that cost nearly 15% of its price.

Among the amazing features is that while the average car is produced in 30 hours tops, the Rolls Royce is produced in the range of 400-450 hours. One sees why this is so because the machine is largely assembled by hand unlike other vehicles that are made with very hi-tech robots. A good indicator is that the Rolls Royce reverses the 90-10 rule and has humans undertake an overwhelming portion of the work that is required to put it into the show room.

Understandably, the vehicle that is mostly made from high quality craftsmanship is expensive because the labor component is high but I also think that the luxury signal contributes substantially to the price of this vehicle. Nobody who purchases a Rolls Royce for upwards of US$ 300,000 cares much that its fuel efficiency is at 14 miles per gallon and would embarrass an environmental conservation advocate. Its a delightful thing that the manufacturers are able to produce a limited number of a fine machine and keep the firm profitable. That's as it should be.      

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