Spirit of Ecstasy?

June 16, 2014

Driving down to the coast last week for a spot of thoroughly undeserved R&R, I was struck by the economic progress that Cambodia has made over the couple of years that I’ve been here. Where once Russian Confederation Boulevard was lined with grubby old buildings and vacant dusty weed-infested lots, recently it has taken on a new lease of life. Russian Boulevard is the main road from the centre of town to the airport, and practically every car manufacturer who sells here has opened a showroom on it.

Toyota, Hyundai, Nissan, Dacia, Honda, Mazda: all of them now have gleaming showrooms, which all seem to be relentlessly empty of buyers. Even BMW has a showroom, and Porsche is in the process of building one. Yes, Porsche. The Cayenne 4X4 seems to be the most popular model, built as it is for nominally tough road conditions, which describes most of Cambodia’s roads.

But I was completely astonished to hear that the latest manufacturer to announce the opening of a sales office here is Rolls Royce. “Nobody would believe that such a luxury car would come to Cambodia,” said Minister for Industry and Handcrafts Cham Prasidh, who was present for the announcement of the new showroom. Well, count me among those who are somewhat surprised by the news.

At the announcement of the opening of the new Rolls Royce showroom in Phnom Penh

At the announcement of the opening of the new Rolls Royce showroom in Phnom Penh. (Courtesy AP)

According to the World Bank, Cambodia’s average per capita annual income is just over $1,000. Looking at the prices of the Rolls Royces they plan to sell here, it seems difficult to square their ambitions with the reality of the country. Your average Cambodian, if they wanted a Roller, and could save, let’s say, half their annual income, would be able to drive one off the lot in the year 2914. Actually, you’d have to factor in another 47 days just to fill the tank up. Because a Rolls Royce Silver Wraith will cost you $450,000 in Phnom Penh.

The story made newspapers around the world: “Luxury Cars for One of World’s Poorest Countries” was the gist of the story (actually, absolutely everyone ran the AP story) but no one really looked at it particularly hard. But I think it’s worth repeating: these cars cost 450 times the average annual income here. Just to put that in context, if Rollers had the same relationship to GDP in the UK as they will do here, they would cost $16.785 million. Or a shade under £10 million.

A spokesman for the company said five Rolls-Royces have been sold in Cambodia since 2005. I don’t know where he got those figures from, but it is actually quite easy to buy a Roller here: I’ve just priced a clean second-hand one at $90,000 from a dealer on Norodom Boulevard, and although they’re not exactly common, you do see them around.

I guess you can see the logic of Rolls Royce’s move: BMW, which owns the company, are looking to keep shareholders happy by announcing expansion plans: on paper it probably looks quite good, opening a showroom in a country with 8 percent per annum economic growth might seem like shrewd business. And of course, there’s no denying the cachet and prestige that accrues to those locals who can afford to buy a Roller. But with grey market ones available for a third of the cost, you’d have to be pretty thick to part with all that cash. I had to interview the official Range Rover dealer a while ago, who told me with a straight face that a new car from him started at $168,000. I had priced a second-hand one for $35,000 while on the way to see him. I asked him how many he sold a year, and he quickly changed the subject.

So, Rolls Royce is opening a showroom in Phnom Penh; it’s sure to become a favourite of lazy photojournalists, who can shoot ragged kids playing in the dirt with a backdrop of 160-mile-per-hour teak-and-walnut encrusted overlord carriers to accompany the usual “Phnom Penh – City of Contrasts” drivel. But it will be interesting to see how the business goes. I’ll keep you posted.

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