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
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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.
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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
Automotive technologies: the UK’s current capability
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
Automotive technologies: the UK’s current capability
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
Automotive technologies: the UK’s current capability
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
Automotive technologies: the UK’s current capability
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
Automotive technologies: the UK’s current capability
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
Automotive technologies: the UK’s current capability
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
Automotive technologies: the UK’s current capability
16
Five priority R&D areas have been identifiedTechnology Group
Automotive technologies: the UK’s current capability
17
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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