In 1998, Vickers decided to sell Rolls-Royce Motors. The most likely buyer was BMW,
which already supplied engines and other components for Rolls-Royce and Bentley cars, but BMW's
final offer of £340 million was beaten by Volkswagen's £430 million.
BMW's contract to supply engines and components to Rolls-Royce Motors allowed BMW to cancel the contract with 12 months' notice. Volkswagen was unable to re-engineer the Rolls-Royce and Bentley vehicles or use other engines within that time frame. .
Volkswagen agreed to sell BMW the Spirit of Ecstasy and grill shape trademarks and BMW agreed to continue supplying engines and components until 2003. Volkswagen continued to produce Rolls-Royce branded vehicles between 1998 and 2003, giving BMW time to build a new Rolls-Royce administrative headquarters and production facility on the Goodwood Estate near Chichester, West Sussex, and develop the Phantom, the first Rolls-Royce from the new company.