The Automotive Council… Continuing the Acceleration

The Automotive Council… continuing the acceleration

Dr. George Gillespie HORIBA MIRA Ltd

www.automotivecouncil.co.uk Automotive Council UK

The Automotive Council was formed in 2009 :

To strengthen and promote sustainable growth of the automotive sector in the UK through enhanced dialogue and co-operation between UK government and automotive industry

Industry Chair : Nigel Stein CEO - GKN PLC Automotive Council UK

Approach: Structure:

Business Environment & Skills

Supply Technology Chain

Workstreams

A continuous value creation cycle involving all facets of the Automotive Council Business Environment & Skills Group Group Chair: Tony Walker, Toyota UK

Main Aims

• Optimise business environment for the UK automotive sector

• Address skills challenges facing the sector

The group has the following work streams:

UK International Business Competitiveness Environment Skills Europe Labour cost Labour Flexibility R&D Tax Relief R&D Tax Relief Governance & Political Stability KPI: Hourly Labour Cost (all sectors) - Eurostat KPI: Survey - Global Competitiveness Report Auto Council / PwC Research KPI: Ave. of 6 indicators, Worldwide Governance Indicators EUCU Global EUCU Global EUCU Global EUCU Global UK scheme design EUCU Global Key competitive advantage for the UK. This is highly competitive. UK strength in institutions and rule of law is a UK labour cost is competitive in Western Europe and - recognised by business leaders. Flexibility allows rapid However split "Large" / key asset. Future stability in EU a concern; auto 6 6 while relatively high globally - is compensated by strong 1 1 5 15 2 4 2 4 hire of high-value add workers at speed. Other countries "SME" reduces industry and government should work together productivity and flexibility. Case for high productivity are noting UK strength - need to monitor and take competitiveness for towards positive renegotiation and make clear in Automotive should be made consistently. 10 10 10 25 action to maintain advantage long-term 8 21 8 21 supply chain. 11 25 message to global corporate leaders Perception Perception SMEs Perception Perception Strong Strong Large Companies SMEs Strong Strong UK Canada Bulgaria US Australia Canada India India Germany Romania Nigeria Thailand Thailand UK Japan France France Japan Poland Bulgaria Italy UK US Russia Spain Canada France India Czech… South Korea Czech Republic Romania Czech Republic China Brazil Italy Poland Labour costPoland LabourSouth Africa Flexibility Spain R&D TaxSpain Relief R&D Tax Relief Governance & Political Stability Slovak Republic Czech Republic US Czech… South Korea KPI: Hourly MexicoLabour Cost (all sectors) - Eurostat KPI: SurveyChina - Global Competitiveness BrazilReport AutoSlovak Council Republic / PwC Research KPI: Ave. of 6 indicators, Worldwide Governance Indicators Spain 2.9 Germany 4.1 Canada Australia 3.4 Italy 3.65 EUCU GlobalFrance EUCUAustraliaGlobal South Africa EUCU SouthGlobal Africa EUCU Global UK scheme design EUCU Global Thailand UK Japan Key competitive advantageUS for the UK. This is Romania highly competitive. UK strength in institutions and rule of law is a Turkey UK labour cost is competitive in Western Europe and - Russia China Bulgaria Australia UK recognised by businessJapan leaders. Flexibility allows rapid 15Brazil However split "Large" / key asset. Future stability in EU a concern; auto Italy 6 6Spain while relatively high globally - is compensated by strong 1 1 5 2 4 2 4 Slovak Republic South Korea hire of high-valueRussia add workers at speed. Other countries Turkey "SME" reduces industry and government should work together South Korea productivity and flexibility. Case for high productivity Mexico Mexico Mexico Germany Brazil Indonesia are noting UKIndonesia strength - need to monitor and take Thailand competitiveness for towards positive renegotiation and make clear in Automotive should be made consistently. Turkey Turkey 10South Africa10 10 25 action to maintain advantage long-term 8Indonesia 21 8 21 supply chain. 11 25 message to global corporate leaders France Indonesia Poland Poland India SMEs Italy Perception Germany Germany Perception China Perception Perception Strong Strong Large Companies SMEs Strong Strong € 0.00 € 5.00€ 10.00€ 15.00€ 20.00€ 25.00€ 30.00€ 35.00€ 40.00 0 1 2 3 4 5 6 UK0 0.1 0.2 0.3 0.4 0 0.1 0.2 0.3 0.4 -1 -0.5 0 0.5 1 1.5 2 Canada Weak Bulgaria Weak US Weak Weak Australia India India Note: data sourced from Eurostat so global rank = EUCU rank Canada Weak Germany Romania Nigeria Thailand Thailand UK Japan France France Japan Poland Bulgaria Italy UK US Labour Productivity Availability of Engineers UniversityRussia / Industy Collaboration InvestmentSpain in R&D byCanada Government France India Czech… South Korea Czech Republic KPI: Apparent labour productivity* - Euostat CzechKPI: %Republic Graduates in science, engineering, manufacuring - UNESCO KPI: SurveyRomania - Global Innovation Index Gross Expenditure on R&D by Government - GII* China Brazil Italy Poland EUCU Global EUCU Global EUCU PolandGlobal SouthRank Africa Rank Spain Spain Slovak Republic High concern area in perception and actual. Key UK universities are regarded as key asset for UK US Czech… UK InternationalDespite reports that UK'sC overallompetitiveness productivity is low, Czech Republic Highlighted as key to investment decisions in South Korea issues are number of engineers completing practical due to reputation for high quality research and China Brazil 1 1 automotive productivity is class leading. 11 14 1 Mexico2 6 13 R&D. UK is weak middling in boh EUCU and Slovak Republic education, then pursuing engineering careers . collaboration. Should continue to develop Canada Australia Investment in automotive supply chain will return Spain 2.9 Germany 4.1 globally - but schemes like AMC indicate that 3.4 Italy 3.65 Concerted effort by industry, universities and France initiatives to enable transfer from research to Australia South Africa South Africa 10 10 increased productivity for UK. 11 17 Thailand11 25 11 24 investment can provide significant returns UK government to incentivise engineering careers industrial application. Japan US Romania Perception Perception Turkey Perception Russia China Perception Bulgaria Strong Strong Australia Strong UK Japan Strong Brazil SouthItaly Korea Relative Strengths SpainUS SouthSouth Korea Korea Russia Key Objectives:UK Slovak RepublicUK US Turkey Mexico SouthGermany Korea MexicoGermany Mexico Mexico Germany GermanyJapan Australia IndonesiaAustralia Indonesia Thailand JapanBrazil France Bulgaria • Labour Productivity SouthCanada Africa Turkey Turkey Indonesia Spain Russia • Analyse UK’s international competitivenessFranceRomania SouthIndonesia Korea CzechPoland Republic Poland India France South AfricaItaly GermanyBrazil Germany China Italy Indonesia Germany€ 0.00 € 5.00€•10.00€Labour15.00€ 20.00€ 25.00 €flexibility30.00€ 35.00€ 40.00 France 0 1 2 3 4 5 6 Spain0 0.1 0.2 0.3 0.4 0 0.1 0.2 0.3 0.4 -1 -0.5 0 0.5 1 1.5 2 China Canada • Create objectiveFrance set of KPI’s to judge Spain Japan Weak Czech Republic Weak Italy Weak Weak Slovak Republic Mexico UK Czech Republic 2.8 Note: data sourced from Eurostat• University so global rank = EUCU rank / Industry2.15 India 3.8 3 Weak Italy Brazil Poland attractiveness for foreign investment Turkey Spain China Slovak Republic collaboration Thailand South Africa Czech Republic Turkey Slovak Republic • DeterminePoland ‘killer facts’ to demonstrate UK’sPoland Italy Mexico Labour ProductivityUK AvailabilityRussia of Engineers UniversityTurkey / Industy Collaboration Investment in R&D by Government • R&D tax relief for Poland Romania Romania KPI: ApparentAustralia labour productivity* - Euostat KPI: % GraduatesRomania in science, engineering, manufacuring - UNESCO KPI: SurveyBulgaria - Global Innovation Index Gross Expenditure on R&D by Government - GII* competitive advantage US Nigeria Nigeria Bulgaria EUCU Global SME’s EUCUSlovak RepublicGlobal EUCU ThailandGlobal Rank Rank Brazil Bulgaria Indonesia High concern area in perception and actual. Key UK universities are regarded as key asset for UK 0 20 40 60 80 100 120 0 Despite5 reports10 that15 UK's20 overall25 productivity30 is low, 0 10 20 30 40 50 60 70 80 90 0 0.002 0.004 0.006 0.008 0.01 0.012 Highlighted as key to investment decisions in 11 14 issues are number of engineers completing practical 2 due to reputation for high quality research and 6 13 Weak 1 1 automotive productivity is class leading. Weak Weak 1 Weak R&D. UK is weak middling in boh EUCU and education, then pursuing engineering careers . collaboration. Should continue to develop *GVA per person employed, €000 Investment in automotive supply chain will return globally - but schemes like AMC indicate that Concerted effort by industry, universities and initiatives to enable transfer from research to increased productivity for UK. investment can provide significant returns 10 10 11 17 government to incentivise engineering careers 11 25 industrial application. 11 24 Perception Perception Perception Perception The ‘UK International Competitiveness’ Study Relative WeaknessesStrong Strong Strong Strong South Korea US South Korea UK UK US Mexico Germany Germany Germany • Availability of Japan Australia Australia Japan France Analysis of international competitiveness Bulgaria Canada Spain Engineers Russia Romania South Korea Czech Republic of the UK automotive industry France South Africa Brazil The UK ‘s International Italy • Availability of skilled Indonesia Germany France Spain Competitiveness China Canada Recommendations: France operators Spain Japan – an Objective Scorecard Czech Republic Italy Slovak Republic Mexico UK Czech Republic 2.8 2.15 India 3.8 3 ‒ To promote the UK’s key strengths • Labour cost Italy Brazil Poland Turkey Spain China Slovak Republic Thailand South Africa For review by Automotive • Investment in R&D by Czech Republic Turkey Slovak Republic ‒ To take urgent action to tackle the Council Poland Poland Italy Mexico government UK Russia Turkey UK’s priority weaknesses Poland Romania Romania Australia Romania Bulgaria • R&D tax relief for large US Nigeria Nigeria Bulgaria Slovak Republic Thailand  Approaching Release. companies Brazil Bulgaria Indonesia 0 20 40 60 80 100 120 0 5 10 15 20 25 30 0 10 20 30 40 50 60 70 80 90 0 0.002 0.004 0.006 0.008 0.01 0.012

Weak Weak Weak Weak *GVA per person employed, €000 Skills

• To provide the pipeline of skills / talent needed now and for the future • industry / government joined forces to form the Automotive Industrial Partnership.

• Launched March 2015, The Partnership will support the delivery of the skills roadmap:

New Growth Basic Skills Apprenticeships Graduates People in Work Technologies

• Boost skills Investing • Inspire the next generation £30 million • Create new routes into automotive careers

Unified cross- government and industry effort to deliver a skilled auto industry workforce for now and for the future. Supply Chain Group Group Chair: Dave Allen, Jaguar Land Rover

Main Aims

• Establish challenges facing the UK automotive supply chain and Improving supply chain long-term competitiveness

• Maximise business opportunities for suppliers improving access to finance for the supply chain

The group has the following work streams:

Long-Term AccessAccess toto FinanceFinance Competitiveness

CapitalisingCapitalising thethe UKUK Innovation and BBusinessusiness Satisfying Demand Premium OOpportunitiespportunities Manufacturing Supply Chain Group – Enabling Growth

Context: Actions: £6 billion opportunity. OEMs and Tier 1. LTASC Programme. Investment in CapEX, R&D, and Skills. (AMSCI funded). Productivity. UK automotive No 1 in Europe (GVA per employee). Luxury and niche vehicle suppliers. Meet the Buyer event at Williams Automotive Investment Organisation. Industry Tooling finance. Addressing No 1 access to expertise focused on high value commodities finance issue for automotive, 30% growth in currently imported. bank lending to the sector. Investment & Growth. £2Bn of supply chain Publications. Providing direction to industry. investments in the last 5 years generating >25% employment growth & 40% revenue growth, for example: Automotive Insulations; Borg Warner; Brose; Lear; Magal; Plastic Omnium; Sertec; VTL …. Research. End-to-end understanding of OEM and Tier 1 demand and capability of smaller suppliers.

Technology Group Group Chair : Graham Hoare, Ford

Main Aims

• Develop technology roadmaps, future research challenges and identify where the UK can develop competitive advantage

• Advise on automotive R&D investment opportunities to foster a stronger UK engineering, supply and manufacturing base

• Preparation and ownership of the UK Automotive Technology Strategy

The group has the following work streams:

Future Technology Energy storage & Establish the APC R&D Co-ordination management

Manufacturing Intelligent Connected Design Technology Vehicle Technology Workstreams 2015

Energy Storage

IC Light Engines weight 5 ‘Sticky’ Structures Strengthen World Technologies Clarify Technology Class R&D system Focus

Electric Intelligent Machines Mobility

• Invest [up to £1 billion over 10 years] in a new • Identify required high value manufacturing Advanced Propulsion Centre (APC) technologies • Improve coordination and collaboration with • Create an energy storage roadmap which includes non- the academic research community electric solutions • Improve collaboration/access from EU R&D • Create aUK UK intelligent intelligent mobility mobility demonstration demonstration program program funding opportunities to test technology and business effectivenesseffectiveness • Construct additional roadmaps for future • Enhance collaboration on innovation and technology technology needs between Motorsport and mainstream automotive • Establish a Design workstream to build UK strength Intelligent Mobility

The Intelligent Mobility challenge has been to develop a sufficiently ‘Granular Roadmap’ to: • Identify the underpinning technology pathways • Encourage cross industry sector collaboration • Bring value add interventions to the market place • Develop the standards, frameworks and guidelines to ensure safety and interoperability

Recognising the breadth and complexity of the IM sector, in 2014 the Automotive

Council created the Cross-Sector IM-PACT UK Technology IM-PACT UK team Group • Supporting the Automotive Council UK • Encompassing Data, Communications, Infrastructure … and Intelligent Other Work Connected Other Work Allowing the newly formed ‘Intelligent Streams Vehicle Streams Connected Vehicle’ team • To focus on vehicle technology Intelligent Connected Vehicle

The Intelligent Connected Vehicle work stream will be the “voice of the vehicle within IM” • Inputting to the Automotive Council and the broader IM-PACT UK team • Including; On Road; Off Road; Passenger Cars; Commercial Vehicles; Consumer purchased; Fleets; … • Bringing renewed intensity to the vehicle centric technology contribution to IM

Challenges Safety Subgroups Technology Driver Assist & • Optimising for Autonomous 1) Technology Connected AND Autonomous Road-mapping Autonomous AND Connected 2) Virtual Design Verification • Efficient development Connected & Co-operative Process for ‘real world’ safety Infotainment 3) Creating the Enabling • Customer, Societal, Technology Environment and Business readiness

Verification Complexity

The Intelligent Connected Vehicle team are now focusing on technology and processes to deliver world class autonomous and connected vehicles Work Stream 1 – Technology Roadmapping

• Identifies Traveller needs from 10,000 respondents • Estimates the business value available The ‘ Traveller Needs & UK Capability’ Study • Clarifies the Development Pathways will provide the basis for roadmapping activity. • Prioritises necessary technologies  Unique Insight into the emerging needs of UK travellers

• The roadmap focus will be on the vehicle and technology directly related to the vehicle. Connected Co-operative Automated

• ICV Roadmap will be built around 3 core themes with an underpinning / enabling theme of Infrastructure and Data Infrastructure and Data:

Work Stream 2 – Test & Validation Methodologies

• There is an opportunity for the UK to take the lead in the test and validation of ADAS and ICV systems • ADAS technologies current require 104 – 106 km drive cycle to validate as ‘fit for purpose’ using conventional test based methodologies • Clearly this quantity of physical testing is not scalable, time consuming and expensive • Opportunity is to develop core competencies and capabilities to mitigate against this technical and commercial risk – virtual Design Verification Processes (vDVP)

• UK to take the lead in the development and application of vDVP in intelligent and connected vehicles as well as more traditional techniques • Reduce the dependency on the amount of physical testing and reducing cost, risk and time to market • Achieved using verified vDVP techniques including analytical and virtual methods as part of the classical systems development lifecycle V-mode

Work Stream 2 – Test & Validation Methodologies

• Development of tiered methodologies:

1. Analytical • Statistical techniques for sensor fusion, algorithm/code review considering Automotive Safety Integrity Level (ASIL) and Functional Safety methodologies • Forming the foundation to determine the veracity of Model in Loop (MIL) and virtual methodologies • Low TRL 1-4 (academia in partnership with industry)

2. Virtual • Simulated environments with real world features for Software in loop (SIL), Processor in loop (PIL), Hardware in loop (HIL) and Vehicle in the Loop (VeHIL) validation • TRL 4-7 to establish methods, capability and facilities. • Creation of large database for real world features co-operatively between supply chain partners Work Stream 2 – Test & Validation Methodologies

• Development of tiered methodologies:

3. Physical • Creation of comprehensive test environment(s) for current and future ADAS and ICV systems • TRL 5-9 (industry) • Creation of ‘living labs’ in the real world for large scale trials and demonstrations of ICV to understand the benefits and stimulate market uptake • TRL 5-9 (industry and government)

4. Cyber-Physical • Establish Automotive Cyber Security capability spanning analytical, penetration testing and solution-eering techniques • TRL 2-9 (industry and academia)

Intelligent Mobility – recent competition

Building on the ‘Introducing driverless cars to UK roads’ competition this initiative : • continues the collaborative Research & Development pathway • aims to encourage development of connected and autonomous vehicles • focuses on three themes – connectivity, autonomy and customer interaction

The ‘Connected & Autonomous Vehicles’ Competition

• The Department for Business, Innovation and Skills (BIS) is to invest up to £20 million in collaborative R&D projects and feasibility studies • Deadline for applications was 30 September 2015.

Thank You