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Trump’s tax cut led to record sales of Rolls-Royce cars

Quartz logo Quartz 1/11/2019 Adam Rasmi
a car with a mountain in the background: Rolls-Royce car driving on snow with helicopter in background© Provided by Atlantic Media, Inc. Rolls-Royce car driving on snow with helicopter in background

Luxury British car-maker Rolls-Royce had a stellar 2018. It sold 4,107 cars, up 22% from the year before. It was the company’s best annual result in its 115-year history.

The sales were revved up by the US, its largest market, which account for around a third of worldwide purchases.

“The tax reform helped a lot to fuel our business,” CEO Torsten Müller-Ötvös told the Financial Times (paywall). The reform in question is the tax cut pushed through by Donald Trump in 2017, perhaps the president’s signature legislative achievement.

a drawing of a face© Provided by Atlantic Media, Inc.

The benefits of the tax cuts flowed mainly to corporations and the wealthy. That gave the sort of people who buy Rolls-Royces—which start around $250,000, but can easily reach seven figures with bespoke options—more money to spend on things like the new Phantom.

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When Trump first pushed for the tax cuts, they were largely framed as a way to boost the US economy. And although the bill certainly gave economic growth a boost in the short term, it is also expected to add $2.7 trillion to US borrowing over the next decade.

The tax changes certainly gave the Rolls-Royce economy a boost, which is good news for German parent company BMW. It is also somewhat surprising, perhaps, given that an extra dollar in a wealthy person’s pocket is more likely to be saved than spent. By contrast, more money for someone living paycheck-to-paycheck is likely to go straight back into the economy. (Trump floated the idea for a middle-income tax cut ahead of last year’s midterm elections, but nothing came of it.)

“It is never that our buyers are short of the money,” Rolls-Royce’s Müller-Ötvös told The Telegraph, “but the question is ‘am I in the mood to buy a new Rolls-Royce?’”

Last year, at least, the answer was yes.

Research Rolls-Royce vehicles on MSN Autos >>

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