VI. Paradigm Shift: BMW’s V12 for Rolls-Royce and a Turbo V8 for Bentley
One of the most fascinating dynamics of the E38 era was BMW’s new role as an engine supplier to traditional ultra-luxury brands Rolls-Royce and Bentley, a development that would reshape the luxury car industry. In the early 1990s, Rolls-Royce Motor Cars began Project “SZ/R”—the development of a long-overdue new model to replace the Silver Spirit/Spur range. Lacking internal resources to design a modern engine from scratch, Rolls-Royce turned to outside suppliers. Engineers evaluated using General Motors’ then-new premium V8 and even a Mercedes-Benz V8 (M119), but ultimately by 1994 Rolls-Royce chose BMW as the engine source for its future models. A deal was struck for two BMW engines: the flagship Rolls-Royce would use BMW’s naturally aspirated 5.4 liter M73 V12, and a new Bentley variant would employ a special twin-turbo 4.4 liter V8 derived from BMW’s M62 engine, tuned by Cosworth to about 349 hp. This decision tacitly acknowledged that BMW’s drivetrain technology had eclipsed Rolls-Royce’s. Tellingly, it also marked Rolls-Royce’s return to V12 power for the first time since the pre-war 1939 Phantom III—and the V12 was coming from Munich.
The result was that the 1998 Rolls-Royce Silver Seraph debuted with the BMW M73 5.4L V12 under its long bonnet, and the concurrently developed 1998 Bentley Arnage Green Label used BMW’s 4.4L M62 V8 (twin-turbocharged to ~350 hp by Cosworth). This was a remarkable convergence: the same V12 that powered a $100k BMW 750iL also propelled a $220k Rolls-Royce—something unthinkable a decade prior. Yet the BMW engine was undeniably a boon for Rolls: the Silver Seraph finally offered the kind of modern performance and silence that Rolls-Royce buyers expected, featuring 322 hp and 361 lb·ft in a whisper-quiet package. It was paired with BMW’s 5-speed electronically controlled automatic. Contemporary reviews noted that the Seraph’s character (aside from its bespoke wood-and-leather interior) was markedly influenced by the driveline. BMW’s engine elevated Rolls-Royce into the modern era, just as it had done for its own 7 Series a few years earlier. To the mild embarrassment of the marques known for near-bespoke craftsmanship, it was frequently noted that the latest from Crewe not only had BMW power, but also switchgear, climate control, and infotainment.
The plot thickened in 1998, when Rolls-Royce Motor Cars was put up for sale by its owner Vickers plc. Bernd Pischetsrieder, BMW’s chairman (and a descendant of Sir Henry Royce’s family, by coincidence), envisioned adding the “Most Prestigious Name in Motoring” to BMW’s portfolio. However, in the spring of 1998, Volkswagen AG, led by Ferdinand Piëch (grandson of Ferdinand Porsche), swooped in with a higher bid. BMW’s final offer of £340 million was well below VW’s bid of £430 million (approximately £830 million in 2025, or nearly $1.2 billion USD in 2025). In July 1998, Vickers accepted Volkswagen’s bid, seemingly making VW the new owner of Rolls-Royce and Bentley. In a dramatic turn of events, BMW had a pocket ace: it had secured the rights to the Rolls-Royce name and the supply of engines. BMW had made a deal with Rolls-Royce plc (the aero-engine firm, which owned the “Rolls-Royce” name and iconic double-R logo) to use the name if it won the deal.
When VW won ownership of the factory but found it didn’t have rights to the brand name, a complex compromise was reached. VW’s purchase had included the historic Crewe works and even rights to the “Spirit of Ecstasy” hood mascot and Rolls’s trademark radiator grille shape. But one critical element had been overlooked: the Rolls-Royce brand name and logo were not Vickers’ to sell—they were controlled by Rolls-Royce plc, a separate company that had retained ownership of the Rolls-Royce name after 1971. Rolls-Royce plc had its own ideas about who should get to use the name, and citing its long-standing joint ventures with BMW in aircraft engine development, Rolls-Royce plc chose to license the Rolls-Royce name and “RR” logo to BMW for £40 million, rather than to Volkswagen at any sum.
Overnight, Volkswagen had bought an automaker but failed to gain access to the actual name Rolls-Royce and RR insignia. VW had the factory, the cars, and the physical trademarks like the grille, but it could not call the cars “Rolls-Royce” after 2002. In the final deal, BMW would continue to supply engines to both marques and allow VW to use the Rolls-Royce name until the transition date. This bizarre arrangement meant that from 1998 to 2002, Volkswagen-owned Bentley was dependent on BMW for vital components. Indeed, had BMW withdrawn engine supply, VW’s newly acquired Rolls/Bentley line would have been paralyzed—a fact BMW used as leverage in negotiations.
Thus, from 1998, BMW’s smooth V12 not only powered its flagship 750iL, but became the heart of the 1998–2002 Rolls-Royce Silver Seraph, the first twelve-cylinder Rolls-Royce in nearly six decades (the ill-fated prewar Phantom III). From having no V12 at all before 1987, to being the standard-bearer of V12 refinement such that even Rolls-Royce turned to Munich for power, BMW had unquestionably established itself as the leader in luxury car powerplants. VW decided to end Bentley’s reliance on BMW engines as soon as possible. Engineers at Crewe dusted off the old 6.75 liter Rolls/Bentley V8—which VW now owned as part of the asset purchase—and re-engineered the Bentley Arnage to accept this engine in place of the BMW V8. By late 1999 VW unveiled the Arnage Red Label, powered by the traditional British pushrod V8 (enlarged to 6¾ liters and making 400 hp), in place of the 4.4L BMW unit. This move was partly technical and partly psychological: VW wanted to send the message that Bentley’s future would not depend on BMW.
The hastily modified Arnage Red Label required substantial changes—the heavier old-engine “lump” forced Bentley to stiffen the Arnage’s chassis and upgrade the brakes, and even then braking performance suffered due to the added mass. Fuel economy and emissions also took a step back, as the 1950s-era engine architecture struggled to meet modern standards. But for traditionalists, the return of the classic 6.75 litermotor was a welcome reconnection to Bentley’s roots. The earlier BMW-powered Arnage was quietly rebranded the Arnage Green Label and phased out in 2000–2001, leaving all new Bentleys under VW with in-house (Crewe legacy) powerplants. Bentley purged itself of BMW components by then, offering its nearly 50-year-old 6.75 liter V8 alongside the new and unprecedented W12 shared with the Volkswagen Phaeton and Audi A8 as it entered the 21st century.
For BMW, the Rolls-Royce/Bentley episode validated its engine development prowess and also had long-term repercussions. The experience of working with ultra-luxury requirements refined BMW’s own approach to top-end luxury. Features like the adaptive ride control and extra NVH tuning in the Silver Seraph (which had an even more isolated suspension subframe than the 7 Series) was assimilated back into BMW’s knowledge base. Culturally, BMW’s acquisition of Rolls-Royce in 1998–2003 can be seen as an extension of what had already happened technically: the 750iL’s V12 and refinement had essentially made a BMW a peer of a Rolls. Now, BMW would actually design and build the Rolls-Royces of the future.
On January 1, 2003, BMW formally took over the Rolls-Royce marque, and that very day the first Goodwood-era Rolls-Royce was delivered to a customer. The flagship model—officially the Rolls-Royce Phantom VII—debuted later that month. The 2003 Phantom was a bold statement that Rolls-Royce, under BMW’s stewardship, would combine the best of British tradition with world-class engineering. It had to, in order to silence skeptics who feared Rolls-Royce would become merely a rebadged BMW. BMW was acutely aware of the perception issue; at the Phantom’s unveiling, Rolls-Royce’s new CEO proudly insisted the car was a true Rolls, not a tarted-up BMW. To underline this, the Phantom shared virtually no visible components with any BMW—its design, though created with the help of BMW’s resources, was unique and unmistakably Rolls-Royce.
It retained classic brand hallmarks: the upright Pantheon grille topped by the Spirit of Ecstasy, the long hood with a 6.75 liter V12 under it, a stately upright greenhouse, and rear-hinged “coach” doors that opened from the center in the style of mid-century Rolls-Royces. But underneath that classical skin lay thoroughly modern tech. The Phantom’s body structure was a lightweight aluminum spaceframe—at the time the largest aluminum spaceframe ever put in a production car, involving over 2,000 hand-welds. This advanced chassis gave the 19-foot-long Phantom remarkable rigidity without excessive weight. It was clothed in flush, high-quality panels and paint-finished to mirror smoothness in a new robotic paint facility at Goodwood. Powering the Phantom was a BMW-designed V12 engine enlarged to exactly 6.75 liters just to further salt VW/Bentley’s wounds. This new era of Rolls engine made 453 bhp and 531 lb·ft—enough to move the 2.5-ton leviathan with authoritative ease. Rolls-Royce engineers tuned the V12 for silent, torque-rich wafting, in keeping with the marque’s reputation, but also ensured a 0–60 mph time in the low 5-second range, on par with much smaller sport sedans.
The Phantom’s successful launch in 2003 restored Rolls-Royce to the top echelon of luxury automobiles. Over the following years, Rolls-Royce, under BMW, expanded the lineup: extended-wheelbase Phantoms, a Phantom Coupé and Drophead Coupé, and later the smaller Ghost sedan in 2010 that took the relationship to yet another level—it was built on a platform shared with the F01/F02 BMW 7 Series. Every new Rolls-Royce model continued to utilize BMW’s powertrain expertise—the Ghost and its coupe and cabriolet variants (Wraith and Dawn) employed a 6.6 L twin-turbo V12 derived from BMW’s N74 engine.
The 2018 Phantom VIII and 2019 Cullinan SUV adopted an enlarged twin-turbo V12 on a new BMW co-developed aluminum architecture. Thus, BMW’s V12 program continues to be the beating heart of all modern Rolls-Royce cars, from the 1998 Silver Seraph’s M73 V12 to the latest Phantom’s twin-turbo iterations. In 2020, Rolls-Royce moved the Ghost to a bespoke platform, putting some distance between the sedan and its BMW heritage. The Wraith and Dawn, coupe and cabriolet respectively, remained on the modified BMW 7 Series platform until they were discontinued in 2023.
The seamless integration of BMW engineering with Rolls-Royce luxury has allowed Rolls-Royce Motor Cars to thrive under BMW: sales have grown (reaching a record 5,586 cars in 2021 worldwide), new production techniques have been introduced (like carbon composite wheels and electric drivetrains for the upcoming Rolls-Royce Spectre EV), yet the brand’s image of supreme exclusivity and craftsmanship has been carefully preserved.
The saga of BMW’s V12s and the Rolls-Royce/Bentley split has become a defining case study in automotive history. It highlights how quickly the balance of power can shift—from the days when Rolls-Royce supplied engines to others, to the 1990s when it had to borrow an engine from BMW, to the 21st century when BMW engines not only power Rolls-Royces but also influence industry benchmarks in NVH and refinement. It also illustrates the potency of heritage in the luxury market: a great name like Rolls-Royce can thrive again if placed in the right hands, and a dormant brand like Bentley can be reborn as much more than just a badge-engineered Rolls when its original spirit is rekindled.
In the end, both Rolls-Royce and Bentley emerged stronger and more differentiated from the turmoil of the late 1990s. Each has set new benchmarks—Rolls-Royce for what the utmost luxury car can be in modern times, and Bentley for how traditional craftsmanship and cutting-edge performance can coincide. The conflict and resolution between BMW and Volkswagen over these marques undeniably reshaped the companies involved. But in this new era, the rich legacy of Britain’s two most fabled luxury car brands would continue well into the future, riding on twelve cylinders to this day for Rolls, although Bentley discontinued its W12 in 2024.