April 2015 | Sangeeta Menon
'Our heritage is the key'
It has been five successive years of growth for Jaguar Land Rover (JLR), long enough to reestablish the company’s position in the front ranks of high-quality manufacturers of passenger cars, and to reaffirm the virtues of what Dr Ralf Speth terms “a unique blend of British engineering creativity and British design”.
Dr Speth, the managing director under whose care JLR found its automotive mojo once again, speaks to Sangeeta Menon about the company’s commitment to crafting outstanding products, the project to expand its global manufacturing footprint, and its penchant for innovation.
Excerpts from the interview:
How has JLR been able to build on its success of recent years? What were the salient points in 2014 of the company’s growth strategy?
The year 2014 was JLR’s fifth successive year of growth in sales. This was undoubtedly fuelled by two product launches and the opening of two brand new manufacturing facilities. We unveiled the Jaguar XE and the world’s most versatile and capable SUV, the Discovery Sport. We have grown our model ranges, with additional powertrain and drive-line options, and introduced world-first technologies such as justDrive, an industry leading app technology.
We opened our first-ever overseas plant — in Changshu, China — and laid the foundation stone for our manufacturing facility in Brazil. The highlight, however, was the official opening of our ‘engine manufacturing centre’ in Wolverhampton in the United Kingdom. Manufacturing our vehicles internationally allows us to reach new markets and new customers. This creates a stronger, more sustainable and increasingly agile business, safeguarding employment in the United Kingdom. Output will supplement, not replace, production in the United Kingdom.
Growth is nothing without an engaged employee base and we grew our workforce throughout 2014. JLR is committed to delivering distinguished products. We want to offer customers greater choice and even more exciting vehicles, crafted with that special British flair. We want to improve the quality of life of our customers and of our employees, creating opportunities for more people to be part of the JLR experience.
Which of the company’s new products have you been most content with, and why?
Our product launches in 2014 set us apart from the competition as they all contained something special, something quintessentially British. The Discovery Sport, the Jaguar XE, the Range Rover Sport SVR, Lightweight E-Type and Project 7 all made their debuts in the year. These products epitomise what our talented employees can achieve for our customers. Each of them extends the reach of our brands and our capability to provide unrivalled experiences to more people around the world.
JLR has been investing heavily in expanding its global reach. How has the company gone about this and what benefits have been garnered?
Last year was a pivotal one for us. We opened two new factories, one in Britain and one in China, and started construction on a third in Brazil. We also introduced new vehicles through our local assembly facility in India. JLR is realising its ambitions to create a global manufacturing footprint. We are still in the relatively early stages of our global expansion plans, but the benefits are clear. Our philosophy is to deliver experiences that our customers love for life; investing in our manufacturing footprint will help us to achieve this.
Innovation has been a cornerstone in the second coming of JLR. What are the challenges involved in keeping this fire burning?
Innovation and the relentless quest for new technologies make our products exceptional. Innovation is at the heart of everything we do and a customer-centric mindset drives our creativity and innovation. There are so many areas where each and every one of us in the organisation has the opportunity to do something different or better for the customer. We bring something singular to the automotive industry, with a unique blend of British engineering creativity and British design.
The company has been on a hiring spree of late. What do you look for, and look out for, when you set forth on such an exercise?
Growth is nothing without an engaged employee base and we grew our workforce throughout 2014. The company’s headcount has doubled over the past few years to more than 32,000 globally. We are investing in the future of JLR by crafting automobiles for our customers and, just as importantly, by employing and developing the people who will help ensure our continued success.
In January, we announced the creation of a further 1,300 jobs at Solihull to accelerate our leadership in lightweight vehicle manufacturing. Hiring the best people to staff our facilities is always the priority. Bringing the right behaviour into the business ensures that we can embed quality right across the company and continue to deliver class-leading products.
We are actively recruiting at all levels to help ensure our sustained growth. Over the past four years, for example, almost 2,000 young people have joined our award-winning graduate and apprentice programmes. Early service leavers are also an excellent talent pool as many former service personnel have skills that are transferrable to an advanced manufacturing environment. We have signed the Armed Forces Corporate Covenant, which supports the reintegration of military personnel into successful civilian careers and supports a range of events linked to the British armed forces.
JLR has always been identified as a characteristically British business and institution. Will that change as the company acquires a greater global profile?
We are enormously proud of our British heritage — that will never change. It is one of the key values of our brands and it separates us from the competition. We were honoured that Her Majesty the Queen officially opened our new engine manufacturing centre last October, recognising the significance of JLR to the United Kingdom’s economy.
How important is JLR to manufacturing in Britain and to the British economy in general?
As the United Kingdom’s largest manufacturing investor, JLR is crucial to the renaissance of British industry. We have committed £10 billion over the last five years to product creation and infrastructure investment. Much of this has centred on significantly upgrading our manufacturing plants and establishing a centre of excellence for engine manufacturing. With such investment comes a significant number of jobs, demonstrating our commitment to advancing the capability of the country’s automotive sector and its supply chain. We support roughly 200,000 families across the United Kingdom, when we take into account jobs at suppliers as well.
Is the partnership with Tata Motors meeting the expectations of the two parties involved? Is there scope for greater collaboration here? Do you have to be cautious with any such undertaking?
Tata Motors is a long-term, strategic owner whose stated intent is to help JLR fulfil the potential of its famous brands. The Tata Motors board is committed to our business plans and we collaborate across the group where it makes commercial sense to do so. Purchasing, electrical engineering and engine development are examples of potential areas for us to investigate. It is recognised that JLR and Tata Motors occupy very different places in the car market and, therefore, we have to be cautious to ensure that our brand identity is preserved.
Sustainability is a forever issue when it comes to automotive companies. How is JLR placed on this question, and what are its plans to lessen the environmental load of its products?
Our business is growing and, with it, our ability to make a sustainable difference to the world in which we operate. To create truly sustainable solutions requires people with the skills, vision and courage to make them happen. That’s what we are investing in developing — to deliver a sustainable future for our own people, our partners and our communities.
JLR’s strategic plans for sustainable and responsible business are delivered through the business passion we call ‘environmental innovation’. The objective is to ‘future-proof’ the company in response to changing environmental and social trends. We are extremely proud to have been named the United Kingdom’s ‘responsible business of the year for 2013’ by the country’s leading corporate responsibility organisation, Business in the Community. This is testament to the credentials built through community investment, skills and talent generation, job creation and investing in cleaner, more efficient products and operations.
What are the opportunities and challenges in front of JLR in the coming months and years?
Looking ahead, we will deliver 12 significant product actions in the next 12 months alone and 50 product actions over the next five years. The challenges in 2015 will be tough. Externally, the geopolitical issues are challenging, with economies around the world in fragile condition. We can be sure we will face tougher legislative requirements for our products and our operations. Competition will be fiercer than ever and changes will take place at a quicker pace.
Our big and premium competitors have the scale and resulting economies this brings, deep pockets and brand power. In the circumstances, we can make ‘being small and special’ a competitive advantage. Also in 2015, we have to make fundamental, critical decisions for the future.