Lessons From The Automotive Sector

Lessons From The Automotive Sector.

Tony Harper

Head Of Research & Advanced Engineering.

2CONFIDENTIAL

Agenda

• JLR Overview

• Current Health Of The Sector (Investments)

• The Automotive Council & It’s Role In The Sector

• Conclusions

3

Jaguar Land RoverKey Facts

• Subsidiary of Tata Motors

• Largest UK automotive employer> 23,000 UK employees> 80,000 in supply chain, 10,000 in dealerships> 170,000 UK jobs supported in total (incl. wider economy)

• Largest UK manufacturing investor> Over £2bn in product creation (75% of UK auto investment)> Including over £1bn in R&D – largest manufacturing investor> 40 new product & variants over next five years

• FY 11/12: Revenue = £13.5bn; Profit (before tax) = £1.5bn• Retail Volume: FY 11/12 : Up 27%, 1st Qtr. 12/13 : Up 36%• Sell products in 177 countries, with 85% of turnover from exports

4

Jaguar Land Rover UK facilities

Manufacturing

Design and research

Global R&D centreDesign & engineering

Corporate HQPowertrain engineering &

testing, design

Warwick Manufacturing Group

Advanced research team

XJ, XK, XF Aluminium stamping, body & assemblyRailhead

Range Rover, Range Rover Sport, Discovery, DefenderStamping, body & assembly

Freelander, EvoqueStamping, body & assemblyRailhead

AJ 200 engine production facilityNew family of 4 cylinder, advanced

technology, low emissions engines

5

GaydonProduct Design and Engineering

• Design studios, chassis and body engineering> CAD workstations, Virtual Reality suite> UK’s largest hybrid engineering team

• Test facilities> Climatic wind tunnels, rig-test and engine test beds, electro-

magnetic chamber, materials laboratories • 4,000 engineers, 60km test tracks • Converted from V bomber base in 1977

6

JLR Growth at a GlanceStatus at EoY 2010/11 vs 2011/12

18,00022,000

5000

10000

15000

20000

25000

2010/11 2011/12

Direct Headcount

22%

£2.1b

£1.6b

1

1.5

2

2.5

2010/11 2011/12

Planned R&D / Capital Investment

40%

£1.5b

£1.1b

0.5

1

1.5

2010/11 2011/12

Profit Before Tax

36%

£8.1b£11.3b

0

5

10

15

2010/11 2011/12

Export Revenue

40%

7

Bringing it Back to Britain:Examples of repatriation to the UK.

June 2011: Nissan confirm Qashqai will be designed,

engineered and built in Britain.

The £192m investment will safeguard 6,000 jobs, both direct and indirect through

the UK supply chain.

March 2011: Jaguar Land Rover awarded more than

£2bn-worth of supply contracts to over 40 UK companies for its new

Evoque mode June 2011: BMW unveil £500m investment plans for Hams Hall

July 2010: Dunton is one of four sites that will benefit

from Fords £1.5bn investment over 5 years in

engine and vehicle technologies.

This will safeguard around 2,800 skilled jobs.

8

Bringing it Back to Britain:Recent Announcements.

Honda considering opening new Engineering Design Centre in UK

Toyota to add 1500 new jobs and invest £100m from 2012

Nissan to build to build LEAF in Sunderland from 2013

JLR to create 1000 new jobs at Solihull

JLR new engine plant at i54 Staffordshire £355 Mils investment

Automotive technologies: the UK’s current capability

9http://www.automotivecouncil.co.uk

Automotive Council


10

Automotive council structure

Automotive Council

Supply Chain Group

5Work-streams

Technology Group

5Work-streams

The Rt Hon Dr Vince Cable MPCo-chairman

Professor Richard Parry Jones CBECo-chairman


The Supply Chain Group aims to:– Build consensus on the challenges in the UK Supply Chain.– Enhance the dialogue between manufacturers, Tier 1 suppliers and

the supply chain on present and future business priorities.– Review the Technology Roadmap and develop a high level UK supply

chain technology vision.– Engage with those responsible for existing training and support

budgets to seek to reflect these priorities.– In addition the Supply Chain Group will address any matters agreed

by the Automotive Council and the Technology Group.– The Supply Chain Group is chaired by Dave Allen (Acting

Chair), Purchasing Director, JLR.

11

Supply Chain Group


12

Access to Finance

Close sourcing gap

Tier 1 to Tier n

Optimise competitiveness

of UK Supply Chain

Encourage new entrants / re-entrants

to UK

Identify/ Advance Common

Opportunities

Growth Strategies for

UK Auto Supply

Industry

All Interdependent

Supply Chain Group Five priority R&D areas have been identified


13

Close Sourcing Gap Tier 1 to Tier N

Tier 1 Supplier Survey has been developed

Close sourcing gap

Tier 1 to

Tier n

Critique attractiveness• Why suppliers left the UK?• Understand the conditions required to invest in the UK (including R&D).• Identify improvement proposals.• Raise awareness of the Automotive Council’s Activities Work in progress – Survey has been trialled

• OEM aggregated demand survey issued• £3bn pa opportunity identified• Engagement strategy under development for UKTI to approach prospective

inwards investors.

Feedback from trial - key influences:• OEM aggregate demand• HQ awareness of UK attributes• Availability of skills and funding

Example


14

Encourage new entrants / re-entrants

to UK

Engagement Plan for Inwards Investors urgently needed

• BIS Automotive Unit and UKTI to take lead• Approaches to be made at “The Top of the House”• August/September likely window – timetable to be developed

• Most Capacity lost from UK has been to mainland Europe• European Mass Market fall reduces suppliers’ willingness to expand in UK• Encouragement from UK Government is critical

UK FACES AN URGENT “ONCE IN A LIFETIME”

OPPORTUNITY

Example

Encourage New Entrants


The Technology Group aims to:– Identify opportunities to provide a more compelling investment proposition for

automotive R&D in the UK versus other countries.– Develop further the technology roadmaps for low carbon vehicles and fuels,

and exploit opportunities to promote the UK as a strong candidate to develop these and other technologies.

– Develop a stronger supply base through joint research on focused areas driven by a common agenda and by facilitating collaboration opportunities.

– In addition the Technology Group will address any matters agreed by the Automotive Council and Supply Chain Group.

– The Technology Group is chaired by Jerry Hardcastle, Vice President Vehicle Development and Design, Nissan Technical Centre Europe.

15

Technology Group


16

Five priority R&D areas have been identifiedTechnology Group


17

18

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Conclusions

• There are many factors influencing the current success of the UK Automotive Sector.

• The New Automotive Innovation & Growth Team (NAIGT) in 2007 and subsequent establishment of the Automotive Council has clearly had a positive effect.

• It is not about “Picking Winners” , it is about taking a joined up approach to achieving a common goal – Growth.

• Thank You

Documents

Lessons From The Automotive Sector