Automotive Investment Organisation UK Trade & Investment Automotive Investment Organisation The UK offers investors a great business case underpinned by growing global demand, a world leading research and development ecosystem and the most supportive business environment in Europe for automotive companies.

AIO and UKTI The AIO is a team based in UK Trade & Investment exclusively focused on supporting the UK’s automotive sector, both by supporting further investments, and also by helping companies to export. The AIO takes strategic direction from the Automotive Council. This means it can: Help investors by making use of all the advantages of being embedded into a highly effective and functioning civil service framework Use UKTI’s international network to support companies overseas …while remaining led by the industry, for the industry.

The UKTI Global Footprint UKTI:160 locations in some 100 markets (98% of world GDP) Investment capability in 72 Posts, with 240 employees, Working with UK team to connect: Clients WHQs, UK branches, supply chains With Government UKTI, OGDs, partners universities, sector bodies, funding opportunities

AIO Objectives and Targets Leverage inward investment to deliver long-term and sustainable growth in the UK Automotive Sector. By taking direction from the Automotive Council... Increasing the amount of inward investment into the automotive supply chain; Building and strengthening the Government’s relationships with global headquarters of vehicle makers; Increasing the amount of foreign investment in automotive sector R&D - particularly in strategic areas; Assisting UK based automotive supply chain companies with their exports to the new markets Promoting the image of the UK automotive sector among key decision makers in overseas markets, and promote the investment and trade opportunity Our key target is 15,000 jobs created or secured by Foreign Direct Investment in the automotive supply chain over the next three years (this is double the number created or secured between 2010 and 2013).

What the AIO Can Bring To Your Organisation Export assistance for all UK-based companies Point of contact in Government and facilitation of Government support Automotive Investment Organisation Highlight your successes and raise the profile of UK automotive Support with developing investment propositions for overseas HQ Specialist advice and connections for customers, partners and suppliers Assist with Funding Initiatives Provide Export Assistance to Domestic and Foreign Companies in the UK Act as a key Point of contact to simplify work with HM Government Provide specializes advice and identify new opportunities Support foreign companies interested in entering the UK

Over the past seven years the UK has emerged as one of the most globally attractive locations for Automotive investment. The foundations for this success have been based on these key areas: 1 - Growing Supply Chain Opportunity: The UK is experiencing an unprecedented period of growth In production volumes driven by global demand for UK- manufactured vehicles as well as a domestic market that is the fastest growing in Europe resulting in a unique supply-chain opportunity. Increasingly UK-based OEMs are looking for supply chain proximity to reduce logistic costs, minimise risk and to cater for R&D cycles that are growing ever quicker. 2- Strong Domestic and Export Market: UK vehicle production volumes reached 1.6m in 2013, overtaking France in passenger vehicle volumes, and the domestic market was the strongest in Western Europe with year on year growth of nearly 11%. Over 80% of UK- built cars were exported with a value of almost £25bn. 3 - Transformational Research & Development: The UK provides an ecosystem which brings together leading-edge firms, universities, motorsports and funded projects to develop, commercialise and deliver technological innovations in the Automotive sector. 4 - Supportive Business Environment: The UK boasts one of the most progressive and flexible business environments which has made us number one in Europe for foreign direct investment. 6 6 6

Domestic Car Market 1. Growing Supply Chain Opportunity UK Spain EU Germany Sweden France Italy Source: ACEA 2014

Vehicle Plant Locations & Output 2013 1. Growing Supply Chain Opportunity Vehicle Plant Locations & Output 2013 Land Rover Halewood Freelander 57,618 Evoque 127,302 Leyland Trucks Leyland Leyland Trucks 15,400 Bentley Crewe Continental 9,408 Mulsanne 1,088 Alexander Dennis Larbert Trucks 1,980 Nissan Sunderland Leaf 8,424 Note 24,348 New Note 34,553 Juke 147,954 Qashqai 227,110 New Qashqai 9,367 Optare Sherburn Buses 444 Lotus Hethel 1,369 General Motors Ellesmere Port Astra 73,466 Geely (LondonTaxi Co) Coventry SAIC MG Motors Birmingham Toyota Burnaston Auris 142,751 Avensis 36,482 Jaguar Castle Bromwich F Type 9,466 XJ 18,917 XF 47,341 XK 2,842 BMW Mini Oxford Mini – 174,997 Land Rover Solihull Defender 8,362 Discovery 42,907 Range Rover 104,120 Honda Swindon Jazz 25,000 Civic 41,840 CRV 71,972 McLaren Woking 1,406 Dennis Eagle Warwick Trucks 1,024 Others Morgan – 542 Caterham – 374 Aston Martin Gaydon 3,828 General Motors Luton Vivaro 43,183 Rolls Royce Goodwood 3,265 Source: SMMT 2014

Engine Production Volumes 1. Growing Supply Chain Opportunity Engine Production Volumes Nissan Sunderland 266,130 Bentley Crewe 10,496 Ford Dagenham 787,398 Toyota Deeside 200,418 BMW Hams Hall 408,060 Bentley W12 Ford Bridgend 741,073 Honda Swindon 139,741 Jaguar Land Rover i54 Source: SMMT 2014

Projected Production Growth 1. Growing Supply Chain Opportunity Projected Production Growth 2018 Projection 2.24m Source: SMMT 2014

The £3bn Supply Chain Opportunity 1. Growing Supply Chain Opportunity The £3bn Supply Chain Opportunity Component Opportunity value (£m) Engine castings 370 Steering systems 220 Trim 170 Harnesses 160 Seating 150 Tyres 140 Alloy wheels Lighting 130 Electronics (ECU, ESP, ABS, PDC) 110 Engine forgings External plastics (bumpers, trim) 100 Entertainment/Navigation 90 Bearings 80 Instrument clusters Glass 70 Hinges Hot Stampings Welded assemblies Component Opportunity value (£m) 12V lead/acid battery 60 Cast aluminium sub-frames Brake callipers 50 Drive shafts & CVJs Engine accessories (alternator, starter, aircon) Fuel tanks HVAC assembly Chassis Suspension Module 40 Misc assemblies (pedals, mirrors, roof rails, grilles etc) Shock absorbers Heat shields 30 Oil pans Small pressings Transmission components Large/medium pressings Steel wheels 20 Carpets Suspension springs 10 Switchgear

Over £10bn invested since 2012 1. Growing Supply Chain Opportunity Over £10bn invested since 2012 Source: SMMT 2014

2 - Transformational Research & Development Global Centre of R&D Capability & Motorsport: The UK is home to 4 of the global top 10 Universities, many of which working in collaboration with the Automotive sector to develop and deliver the technologies of the future. The UK is also home to 8 out of the 11 Formula 1 teams. Leading Automotive R&D Facilities: The UK is home to world class facilities and is the ideal location for automotive R&D supported by investment From OEMs, innovative suppliers and funded Government programmes. World Leader in Low Carbon Technologies: With world leaders in engine technology including, Ford, Nissan and Jaguar Land Rover working in collaboration with suppliers and supported by large-scale Government funding, the UK has emerged as a leader in the development and commercialisation of low-carbon technologies.

UK Capabilities 2. Transformational Research & Development Advanced Engine Technologies and Systems The UK is home to leading global engine manufacturers using the country’s technical capabilities to design advanced engines across a diverse range of sectors and engine technologies. Advanced Manufacturing Transformational breakthroughs are being made across a number of manufacturing fields, underpinned by the UK’s dominance in areas such as composites, rapid production techniques and advanced joining. Aerodynamics Connect with the UK’s extensive aerodynamic expertise from its world-leading aerospace and motorsports industries to dramatically reduce fuel consumption in mass-market applications. Design Creativity A design-led automotive sector, serviced by globally renowned centres of excellence and the world’s leading car designers.

UK Capabilities (continued) 2. Transformational Research & Development UK Capabilities (continued) Electric Machines and Power Electronics Global vehicle makers are developing exciting future electric-vehicle technologies in the UK, supported by expertise across automotive, rail and power-generation engineering. Energy Recovery and Storage Collaborate with the UK’s global pioneers in vehicle energy recovery. Intelligent Mobility / Intelligent Transport systems Companies are recognising that the UK’s strengths in communications, electronics, big data and test infrastructure to develop Intelligent Mobility solutions. Lightweight Design, Materials and Components The light-weighting expertise grounded in the world’s largest Formula 1 industry and second-largest aerospace sector is key to delivering the transformational weight reduction required for mass-market vehicles of the future. Systems Integration and Homologation The UK has world-class expertise and experience in the homologation of vehicles for European markets.

2. Transformational Research & Development Motorsports The UK is the global centre of the Formula 1 industry. The technological innovations found in Formula 1 underpin the nine areas of R&D capability identified as the major strengths of the United Kingdom The UK is home to eight of the 11 Formula 1 teams. Overall there are 4,500 firms in the UK motorsport sector. Technological innovations generated though F1 have a trickle down effect into the wider automotive sectors as well as innovative applications in other sectors such as aerospace or pharmaceuticals

Motorsport Valley 2. Transformational Research & Development Source: MIA 2014

Motorsport Suppliers 2. Transformational Research & Development Source: MIA 2014

Examples of technology transfer from F1 to commercial road usage

2. Transformational Research & Development R&D Ecosystem The combination of UK expertise and its forward-thinking approach gives the country a unique strength in the development of key automotive technologies. The UK’s strong manufacturing and supply chain ecosystem consists of a broad range of innovators that covers the whole development life cycle from initial concept through to commercial launch.

World Class Facilities 2. Transformational Research & Development World Class Facilities

Centres of Excellence – High Value Manufacturing Catapults 2. Transformational Research & Development Centres of Excellence – High Value Manufacturing Catapults Advanced Forming Research Centre, Glasgow Centre for Process Innovation, Wilton Advanced Manufacturing Research Centre, Sheffield The Nuclear Advanced Manufacturing Research Centre, Sheffield The Manufacturing Technology Centre, Coventry The National Composite Centre, Bristol The Warwick Manufacturing Group, Coventry

Low Carbon Technologies 2. Transformational Research & Development Low Carbon Technologies The UK Government and automotive industry are investing heavily to make the UK a world leader in research and development for electric and hybrid vehicles. They have committed £1bn to the new Advanced Propulsion Centre to support the development of next-generation propulsion technologies from research through to mass-manufacture. Ambitious EU & UK emissions targets are increasing the demand for ultra low emission vehicles , including hybrids and electric vehicles Regulatory CO2 targets are in place around the world, with the EU targeting a fleet average for new cars of 95g of CO2 per kilometre by 2021. The UK has a long-term, stable and comprehensive policy framework to support the transition to ULEVs, backed by significant funding commitment of £400m to 2015 and a further £500m from 2015-2020: The UK Government’s vision is that by 2050 almost every car and van in the UK will be an ultra low emission vehicle (ULEV), with the UK automotive industry at the forefront of their design, development, and adoption. Funding to stimulate demand for ultra low emission cars and vans Support for ultra low emission taxis and buses Support for the development of infrastructure Funding for research & development Similarly, The Proving Factory is helping companies in hybrid power to commercialise their technologies.

3 - Supportive Business Environment Funding & Support at National Regional and Local level: With innovative programmes at national level including the Advanced Propulsion Centre and the Regional Growth Fund as well as local funding though Local Enterprise Partnerships, there is very strong public support for UK-development initiatives Strong Relationship Between Government And Industry : Through the SMMT, Automotive Council and the Automotive Investment Organisation, the government and industry are proactively working together to attract investment, boost trade and implement policies that support the continued growth of the UK Automotive sector. Competitive incentives For businesses: The UK has one of the most competitive corporation tax rates in the EU, low labour costs, flexible legislation, a stable currency and developed infrastructure.

A Great Place to do Business 3. Supportive Business Environment A Great Place to do Business Excellent labour and Industrial relations The most competitive tax regime Source: KPMG 2014

Competitive Incentives & Key Initiatives 3. Supportive Business Environment Competitive Incentives & Key Initiatives Advanced Propulsion Centre (APC): As part of the Automotive Strategy, Government and industry are jointly investing over £1bn over the next 10 years in the APC Regional Growth Fund (RGF): Over £230m has been allocated to Automotive companies to date. Innovate UK: A competitive fund supporting investments in technologically driven transport projects – Over £310m has been allocated to Automotive companies to date. Advanced Manufacturing and Supply Chain Initiative (AMSCI): Funding of £120m for R&D, skills training, and capital investment for supply chain companies. Ultra Low Emission Vehicles (ULEV): The Government has committed £500m to support the development and uptake of ULEVs all the way out to 2020. Employer Ownership Funding: Up to 50% contribution to training costs for transferrable skills up to a value of £2m. R&D Tax credits: R&D Tax Credits is a scheme allowing companies to reclaim a significant percentage of their development costs back in cash whether you are profitable or pre-revenue. High Value Manufacturing Catapult (HVM): A £200m scheme providing UK business with a gateway to access the best manufacturing talent and facilities in the country. The Patent Box: provides an effective corporation tax rate of 10% on profits from patents registered in the UK or European patent offices.