INVESTING IN GLOBAL GROWTH OPPORTUNITIES AND CHALLENGES FOR UK SUPPLY BASE. Rob Johnson Purchasing Director Jaguar Land Rover June 2013
Topics. Update and overview on Jaguar Land Rover New JLR UK Engine Manufacturing Plant UK Supplier growth opportunities and challenges 2
Jaguar Land Rover: Key Facts. Subsidiary of Tata Motors since 2008 Largest UK automotive employer >25,000 UK employees 80,000 in supply chain and 16,000 in dealerships 190,000 UK jobs supported in total (incl. wider economy) Largest UK manufacturing investor 2.75bn in product creation and capital expenditure (75% of UK auto investment) Largest UK manufacturing investor in R&D over 1.3bn in R&D 40 new product & variants over next five years FY 12/13: Retails: 375,000 (up 22%) Revenue 15.8bn (up 17%); PBT 1.68bn (up 11%); 85% of turnover from exports to 179 countries
Update on Jaguar Land Rover: Current Land Rover Portfolio. Range Rover Sep 12 RR Sport Mar 13 Evoque Jul 11 Discovery 4 Jul 09 Defender - 1990 Freelander 2 Oct 06
Update on Jaguar Land Rover: Current Jaguar Portfolio. F-TYPE Jan 13 XF Nov 08 XK Dec 05 XF Sportbrake Feb 13 XJ Oct 10
JLR growth at a glance: 2010/11 to 2012/13. 2500 2000 1500 1000 500 0 16.0 14.0 12.0 R&D / Capital Investment m m 144% 1,530 900 2010 2011 2012/13 Export Revenue 63% 2.75bn in 2,000 FY13/14 13 10.0 11.2 8.0 8.0 6.0 4.0 2.0 0.0 2010/11 2011/12 2012/13 2000 1500 1000 500 0 30000 25000 20000 15000 10000 5000 0 > 57 Profit before tax 3000% 1,500 1,675 1,675 2010 2011 2012/13 Headcount 44% >25,000 22,000 18,000 2010/11 2011/12 2012/13
Jaguar Land Rover: UK Manufacturing Footprint. Land Rover Freelander 2 and Range Rover Evoque c4,600 employees JD Power European Gold Plant Award 2009 Range Rover, Range Rover Sport, Land Rover Discovery, Land Rover Defender Aluminium body construction facility c6,000 employees F-TYPE from mid 2013 Jaguar XF, XF Sportbrake, XJ and XK Aluminium body construction facility c3,200 employees
Jaguar Land Rover: Design and Engineering UK Footprint. Design and Engineering Centre Commercial and central staff functions Extensive test track and offroad testing c6,000 employees Global Jaguar Land Rover headquarters Design and Engineering Centre Commercial and central staff functions Powertrain and other test facilities c4,000 employees
Collaborative JLR Research: Partnership with Warwick Manufacturing Group. 100m investment 120 research engineers Collaborative research base Chair in Hybrid Systems
Operations and Recruitment: Investing strongly. 3 shift operation at Solihull and Halewood. JLR has established the largest electric/hybrid engineering team in UK c.240. 1,100 new positions created at Castle Bromwich to produce the new Jaguar XF Sportbrake and F-TYPE. Advanced level 100 apprentices to join JLR in 2013. c.300 graduates to join JLR in 2013. JLR promoted STEM agenda and engineering careers to 200,000 young people in 2012. Employs >25,000 people globally - 9,000 employees recruited in past 2 years.
Engine Manufacturing Centre at i54 South Staffordshire: Production facility footprint. Job Creation... c.1400 JLR will recruit this many high skilled people for the project Supporting c.5500 jobs In the supply chain and wider UK economy Total Investment... > 1.1b On Design Engineering new engine and CAPEX investment of the project 100,000 m 2 Facility Sustainability Target: BREEAM Excellent 92 state-of-the-art CNC machining centres Engine completed in clean room environment
Engine Manufacturing Centre: Production Facility Footprint. New generation of technologically advanced 4 cylinder diesel and petrol engines. Lightweight/low emissions. First engine into production from 2015.
Architect Visuals: View from M54.
Status: Well advanced and on schedule
JLR UK Supplier spend: Up 2.5bn (+70%) since 2011/12. This accounts for more than JLR will spend more than 6bn in its UK supply chain in 2013 50% Of JLR s global purchasing spend More than 50% of JLR s UK supply base is in the West Midlands
Billions Growth: Major opportunities for the best suppliers 2013-17. > 6bn UK supply spend planned in 2013/14; Over 50% potential growth in JLR UK supply chain by 2017, based on current UK supplier share proportion. Opportunity to create jobs at JLR and in the UK supply chain over next 4 years. Largest skills and recruitment uplift in a generation; 5 Opportunity for greater UK growth as proximity key factor in OEM sourcing decisions; Communication in long distance supply chains; Environmental considerations; More complex, late sequenced customer options. FY 11/12 FY 12/13 FY 15/16 FY 19/20 JLR Spend with Suppliers
Growth: A once in a generation opportunity and challenge Opportunity UK car manufacturing prospects positive relative to elsewhere. Further potential supplier share growth based on improving competitive level of UK factories. Challenge Significant supply capacity removed from the UK after downturn. Many suppliers maxed-out (Evoque, Qashquai etc). Significant new capacity needed tools, people, skills, facilities. Supplier capability needed management, workforce, financing. Structural gaps in UK supply chain e.g. engines, parts.
This is what our suppliers are saying to us: Challenges to growth. Finance in the automotive manufacturing sector is tight Access to Finance Headcount Tier 2 and beyond Location / Facility Other Shortage of skilled workers and apprentices Lack of suitable 2nd tier suppliers based in UK Capacity on current facilities
Supply Chain Opportunities: Discussion topics. Awareness across supply chain of scale & speed of potential growth Supplier Skills gap Challenge & Opportunity UK suppliers need to address skills gaps now to be match fit and ready for growth Securing Global Supplier Direct Investment Investment decisions needed now to support higher volume base by 2017 and beyond Combination of Supplier /JLR action and government action The lack of an appropriately skilled workforce may limit the UK s ability to maximise its full growth potential
Thank you.