Yes, thankfully the likes of Rolls~Royce and Bentley are not (yet!) going down this route. (Despite them both being owned now by two German giants sadly) Is that proving to be detrimental to these luxury car brands?? On the contrary ~ both Rolls~Royce and Bentley Motors have both reported huge increases in their order books in the last week alone - up 31% and 37% respectively in 2011 compared to 2010!
The ironic thing about that is that an increasing percentage of these premium brand cars are being ordered by the new, super-rich of China's society, (those that own the manufacturing plants!!) who want to order a bespoke vehicle to their own specifications, and built by british craftsmen, then shipped to China and the like, for their own private use! Do they want to buy one of their own chinese made, low priced products to drive around in...? NO, they want the best in the world, they want to order Extended Wheel Based RR Phantoms costing £325,000 a piece, handcrafted in Goodwood, England or £220,000 bespoke Bentleys hand built in Crewe, Cheshire.
Rolls~Royce Trent engines are by far the most expensive jet engine on the market, and again still hand~built in UK but Boeing, Airbus etc still want them despite the very high (premium) price of them, all down to the quality of the parts/components and the aftersales service package (which is truly unbelievable) - all things you dont necessarily get to the same degree with rival aero engine manufacturers. General Electric are RR's closest rivals.
This suggests to me that luxury brands that do not go down the outsourcing route and find that they can still survive, even prosper, even in these hard times of global economic downturn, proves that outsourcing is definately not necessarily the route for premium brand survival. In fact there is a strong case to suggest it is exactly the wrong route to take. Who would have thought that car makers such as Royce & Bentley producing very small numbers of very highly priced products would actually be significantly increasing orders during this world recession? Those prestige companies that see no other option for survival than to outsource to china etc. I believe are in grave danger of their own fears becoming a reality for them, by the corresponding reduction in the level of prestige associated with their brand in the all consuming race to bring lower priced products to the consumer, ultimately could be a self-fulfilling phrophecy. Does B&O want to stay a genuine ultra-premium brand? Or do they want to be competitive with Bose and Sony and others? Maybe B&O should instead be seeking to protect it's 'ultra-luxury' and 'ultra-high price' image by designing and manufacturing in Denmark and keep aiming at 'money dont matter' customers who just want the absolute best...?
If B&O still make world class products that are the best (or among the very best) in the world, they should not be seeking to cut costs massively (by outsourcing) in order to survive. There is plenty of money out there that want to buy the best ~ and to those wealthy individuals price is not the issue - quality and exclusivity is. In other words, they dont really care how much it costs, their only concern is whether it is the best that money can buy......If B&O really does make the best, people will still pay for it. As china prospers massively from all its manufacturing, the wealthy chinese business owners over there may become a significant and growing export market for £20K, £30k, £100k televisions and £100k sound systems from B&O made in Denmark - providing that is, B&O can produce the 'best in the world'..... otherwise B&O may as well outsource and focus their efforts on reducing manufacturing costs in order to deliver the next generation of B&O customers with 'competitively priced' products competing on roughly the same platuea as Bose etc...
Regards,
