Lessons From The Automotive Sector. Tony Harper Head Of Research & Advanced Engineering.

Agenda JLR Overview Current Health Of The Sector (Investments) The Automotive Council & It’s Role In The Sector Conclusions

Jaguar Land Rover Key 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

Jaguar Land Rover UK facilities Design and research Global R&D centre Design & engineering Corporate HQ Powertrain engineering & testing, design Warwick Manufacturing Group Advanced research team Manufacturing XJ, XK, XF Aluminium stamping, body & assembly Railhead Range Rover, Range Rover Sport, Discovery, Defender Stamping, body & assembly Freelander, Evoque Stamping, body & assembly Railhead AJ 200 engine production facility New family of 4 cylinder, advanced technology, low emissions engines

Gaydon Product 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

JLR Growth at a Glance Status at EoY 2010/11 vs 2011/12

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

Bringing it Back to Britain: Recent Announcements. 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 Honda considering opening new Engineering Design Centre in UK

Automotive Council http://www.automotivecouncil.co.uk

Automotive council structure Supply Chain Group 5 Work-streams Technology Group Automotive council structure The Rt Hon Dr Vince Cable MP Co-chairman Professor Richard Parry Jones CBE Co-chairman

Supply Chain Group 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.

Growth Strategies for UK Auto Supply Industry Supply Chain Group Five priority R&D areas have been identified Optimise competitiveness of UK Supply Chain All Interdependent Access to Finance Close sourcing gap Tier 1 to Tier n Growth Strategies for UK Auto Supply Industry Identify/ Advance Common Opportunities Encourage new entrants / re-entrants to UK 12

Close sourcing gap Tier 1 Close Sourcing Gap Tier 1 to Tier N Example Tier 1 Supplier Survey has been developed 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. Close sourcing gap Tier 1 to Tier n Feedback from trial - key influences: OEM aggregate demand HQ awareness of UK attributes Availability of skills and funding 13

URGENT “ONCE IN A LIFETIME” Encourage New Entrants Example 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 Encourage new entrants / re-entrants to UK UK FACES AN URGENT “ONCE IN A LIFETIME” OPPORTUNITY 14

Technology Group 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.

Technology Group Five priority R&D areas have been identified We have previously identified the 5 Strategic Technology areas for the UK

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