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

Rob Johnson Purchasing Director Jaguar June 2013 Topics.

Update and overview on

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 Sportbrake – Feb 13

XF – Nov 08 XK – Dec 05 XJ – Oct 10

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

£m R&D / Capital Investment £m Profit before tax 2500 2000 £2.75bn 3000% 2000 > 144% 1500 2,000in 1500 1,500 1,675 1,530 FY13/14 1000 1,675 1000 900 500 500 57 0 0 2010 2011 2012/13 2010 2011 2012/13 £16.0 Export Revenue Headcount £14.0 30000 £12.0 63% £13 25000 44% £10.0 £11.2 >25,000 20000 22,000 £8.0 £8.0 15000 18,000 £6.0 10000 £4.0 5000 £2.0 £0.0 0 2010/11 2011/12 2012/13 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 • F-TYPE from mid 2013 Defender • Jaguar XF, XF Sportbrake, XJ and XK • Aluminium body • Aluminium body construction facility construction facility • c3,200 employees • c6,000 employees Jaguar Land Rover: Design and Engineering UK Footprint.

• Design and Engineering Centre • Commercial and central staff functions • Extensive test track and off- road 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.

. 100,000 m2 Facility . 92 state-of-the-art CNC machining centres Job Creation... . Sustainability Target: BREEAM Excellent . Engine completed in clean room environment 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 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… 50% Of JLR’s global £6bn purchasing spend More than… in its UK supply chain in 2013 50% of JLR’s UK supply base is in the 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.

5

• Largest skills and recruitment uplift in a generation; £Billions

• Opportunity for greater UK growth as proximity key factor in OEM FY 11/12 FY 12/13 FY 15/16 FY 19/20 sourcing decisions; JLR Spend with Suppliers • Communication in long distance supply chains; • Environmental considerations; • More complex, late sequenced customer options.

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 Shortage of skilled workers and apprentices Headcount Tier 2 and beyond Lack of suitable 2nd tier Location / Facility suppliers based in UK Other

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.