INVESTING IN GLOBAL GROWTH OPPORTUNITIES AND CHALLENGES FOR UK SUPPLY BASE.

Rob Johnson Purchasing Director Jaguar Land Rover June 2013

2

Topics.

Update and overview on Jaguar Land Rover

New JLR UK Engine Manufacturing Plant

UK Supplier growth opportunities and challenges

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.

Evoque – Jul 11 Range Rover – Sep 12 RR Sport – Mar 13

Discovery 4 – Jul 09 Freelander 2 – Oct 06 Defender - 1990

Update on Jaguar Land Rover: Current Jaguar Portfolio.

XK – Dec 05

XF Sportbrake – Feb 13 F-TYPE – Jan 13

XJ – Oct 10 XF – Nov 08

£8.0

£11.2

£13

£0.0

£2.0

£4.0

£6.0

£8.0

£10.0

£12.0

£14.0

£16.0

2010/11 2011/12 2012/13

Export Revenue

>

£m £m

57

1,500

1,675

0

500

1000

1500

2000

2010 2011 2012/13

Profit before tax

1,675

900

1,530

2,000

0

500

1000

1500

2000

2500

2010 2011 2012/13

R&D / Capital Investment

JLR growth at a glance: 2010/11 to 2012/13.

18,000

22,000

>25,000

0

5000

10000

15000

20000

25000

30000

2010/11 2011/12 2012/13

Headcount

144% 3000%

63% 44%

£2.75bn in

FY13/14

• F-TYPE from mid 2013

• Jaguar XF, XF Sportbrake, XJ and XK

• Aluminium body construction facility

• c3,200 employees

• Land Rover Freelander 2 and Range Rover Evoque

• c4,600 employees

• JD Power European Gold Plant Award 2009

Jaguar Land Rover: UK Manufacturing Footprint.

• Range Rover, Range Rover Sport, Land Rover Discovery, Land Rover Defender

• Aluminium body construction facility

• 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

• Design and Engineering Centre

• Commercial and central staff functions

• Extensive test track and off-road testing

• c6,000 employees

Jaguar Land Rover: Design and Engineering UK Footprint.

£100m investment 120 research engineers Collaborative research base Chair in Hybrid Systems

Collaborative JLR Research: Partnership with Warwick Manufacturing Group.

Operations and Recruitment: Investing strongly.

3 shift operation at Solihull and Halewood.

JLR promoted STEM agenda and engineering careers to

200,000 young people in 2012.

JLR has established the largest electric/hybrid engineering team in UK – c.240.

Advanced level 100 apprentices to join JLR in 2013.

1,100 new positions created at Castle Bromwich to produce the new Jaguar XF Sportbrake and F-TYPE.

c.300 graduates to join JLR in 2013.

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 m2 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.

JLR will spend more than…

£6bn in its UK supply chain in 2013

This accounts for more than…

50% Of JLR’s global purchasing spend

More than…

50% of JLR’s UK supply base is in the West Midlands

FY 11/12 FY 12/13 FY 15/16 FY 19/20

£ B

illi

on

s

JLR Spend with Suppliers

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; • 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.

5

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.

Growth: A ‘once in a generation’ opportunity and challenge

This is what our suppliers are saying to us: Challenges to growth.

Finance in the automotive manufacturing sector is

tight

Shortage of skilled workers and apprentices

Lack of suitable 2nd tier suppliers based in UK

Capacity on current facilities

Access to Finance

Headcount

Tier 2 and beyond

Location / Facility

Other

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.