Rolls-Royce woes spread to car branad

The boss of Rolls-Royce Motor Cars has complained that the crisis at its jet engine maker namesake, Rolls-Royce Plc, is damaging the image of his company's luxury cars. 

Public confusion over the relationship between the two companies -which have been separate businesses since the mid-1970s - is causing "contagion", according to Torsten Müller-Ötvös, chief executive of the car maker.
He raised fears that Rolls-Royce car owners, seeking to signal their success, might balk at the brand being mistakenly associated with financial problems at Britain's most famous engineering company.
Mr Müller-Ötvös said: "We know how famous the brand is, and as much as we have done to make clear that they are separate, for many people it is hard to see the difference. When people read about turmoil at Rolls-Royce in a newspaper it causes concern."
Rolls-Royce Motor Cars is owned by BMW, while Rolls-Royce Plc is a separate listed company and a member of the FTSE 100.
Fears of damage to the car maker's brand have grown as the engineering giant has churned out a string of negative updates.
It shocked the City 18 months ago with its first profit warning in a decade. This has been by followed by a further four warnings and downgrades. The shares have plunged more than 60pc as a result, wiping more than £10bn off the company's market value.
In contrast, Rolls-Royce Motor Cars has enjoyed a renaissance in recent years, and in its last full year sold more than 4,000 cars, a record.
Mr Müller-Ötvös expressed sympathy for the plight of Rolls-Royce Plc, but warned that he was "determined to protect" the car maker after having "spent a great deal of time and money effectively resuscitating our part of the brand".
He added: "It is not supporting our business in the proper way and we are watching carefully."
The two companies are in regular contact, Mr Müller-Ötvös said, adding that Sir Ralph Robins, the former chairman of Rolls-Royce Plc, is now a member of the board of Rolls-Royce Motor Cars.
When the aircraft and marine engine-maker first hit problems, Rolls-Royce Motor Cars issued a press release spelling out the difference between the two. But deepening troubles at the listed company have increased concerns.
The risk to BMW-owned Rolls-Royce Motor Cars is high, according to Robert Haigh, director of Brand Finance, which analyses the value of brands. He said: "Knowing that your car bears the same name as the company that manufactured Spitfire engines is undoubtedly appealing.
"The flipside is that now that company is facing tumbling profits, a plunging price fall and thousands of job losses, the association is not so positive. For Rolls-Royce cars' status-conscious owners, this matters."
Rolls-Royce Plc declined to comment.

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