April 2014 | Sangeeta Menon

'We continue to expand our global footprint'

For Jaguar Land Rover (JLR), a subsidiary of Tata Motors, financial year 2013-14 was one of ‘solid performance’, with record growth in all six of its key regions. In an interview with Sangeeta Menon, CEO Dr Ralf Speth attributes the success to ‘stunning new products with innovative technologies’. Excerpts:

How would you describe the financial year that has just ended? What were the key highlights for JLR?
We can reflect upon a solid performance. Stunning new products with innovative technologies characterised the year, among them, the all-new Range Rover Sport, the Jaguar F-TYPE convertible and coupe, and the peerless long-wheelbase Range Rover Autobiography Black.

We won over 200 awards for our products, including the coveted Golden Steering Wheel award for the Jaguar F-TYPE. I am also proud that Business in the Community, a UK charity, named us Responsible Business of the Year, a significant accomplishment for us as we grow the business responsibly.

We continued to invest heavily to support product actions and to expand our global operational footprint. We reached an agreement to build a plant in Brazil, and both our Chery Jaguar Land Rover plant in China and our engine manufacturing facility in the UK are rapidly approaching prototype test builds.

It is the passion and commitment of our employees that sets us apart. We welcomed more than 3,000 new hires as well as 422 apprentices and graduates into JLR. We have more than 1,000 people currently on our apprentice and graduate programmes, and group-wide academies now set up to assist employees with their personal development, online and in classrooms.

During the year, British Prime Minister David Cameron inaugurated our latest training centre in Beijing. In fact, we invested £20 million in learning and development in the last fiscal and provided leadership programmes to 2,500 leaders across the company.

All of these achievements and milestones are driven by a desire to deliver class-leading products, which will provide experiences our growing customer base will love for life.

JLR sold more vehicles to more customers than ever before during the year. What do you attribute this success to?
The JLR business is driven by great British products, designed, engineered and manufactured by a skilled workforce. Right now we have our strongest-ever product line-up, giving customers what they want. We have introduced a raft of new technologies in our vehicles, including stop-start, across the entire range, AWD Jaguars for the snow-belt of North America, active drive line and nine-speed gearbox on the Land Rover Evoque and the world’s first diesel hybrid SUV. Our relentless focus on quality was recognised by Jaguar being awarded the status of Number 1 brand in the JD Power survey in the UK.

How important are design, technology and innovation in shaping the future of the auto industry? How will these factors influence JLR cars?
Innovation is critical to all parts of the business. Innovation is the very best response to the changing world around us — not just commercially but environmentally, economically and socially. The drive for improvement offers significant opportunities to reach new customers, as our vehicle range broadens.

This is an incredibly inventive business. We are pioneers in aluminium construction and lightweight materials; we are delivering better aerodynamics, rolling resistance, crash safety and connectivity technologies.

At JLR, an unrelenting focus on design, technology, innovation and quality is absolutely integral to our business. It is this focus that has seen JLR reach consumers in more global markets than ever before. It is only by maintaining a cohesive strategic approach to all of these elements that we will continue to engineer and craft beautiful vehicles that meet the exacting demands of our customers.

How invested is JLR in understanding and anticipating customer needs?
At JLR, the customer is at the heart of everything we do. It is essential that customer attitudes and opinions are taken into account in the development of our vehicles. We invest heavily in understanding existing and potential owners, to ensure that the company’s products are perfectly suited to their needs. Our customer insight team works across 20 markets worldwide, spending many hundreds of hours each year with target customers, getting to know who they are and what they want from our cars. Through detailed research we gain an excellent understanding of how premium car buyers perceive the Jaguar and Land Rover brands.

The team produces ethnographic films and booklets on target customers to help the wider business connect more easily with customers. This information is a vital tool for the design, engineering, marketing and sales teams to better understand consumer motivation and behaviour.

Placement graduates known as ‘insight advocates’ also work within the research teams. Research clinics are conducted during the model development phase. For one of JLR’s upcoming models, customer insight processes have been ongoing since 2012, progressing from ethnographic interviews and concept confirmation clinics, through to clinics for theme, package, marketability and volume, to target customer interviews. Every insight gained is invaluable; by enabling Jaguar Land Rover to deliver exactly what customers want, the customer insight teams help build customer satisfaction and brand loyalty.

Could you tell us a bit more about the plans for Brazil and how the enhanced capacity will fuel future growth for JLR in various markets?
Brazil is a key strategic market with strong potential for JLR and we are to become the first British carmaker to open a manufacturing facility there. This new facility will play an important role in supporting the significant growth opportunity identified in Brazil and across other South American markets. Construction of the premium manufacturing facility will commence in mid-2014. The first vehicles will come off the assembly line in 2016, subject to the final approval of the plans from the Brazilian Federal Government under its Inovar-Auto programme. The new plant will have a capacity to build 24,000 vehicles annually for the Brazilian market.

SUVs are very popular in Brazil and as a result, JLR has had a presence there for more than 20 years. Brazil was our eighth-largest single market last year, selling more than 11,611 vehicles, a 41 percent increase. In 2013 Land Rover’s share of the SUV segment stood at 53 percent and over the last three years, JLR has seen a sales increase of 118 percent. Without a manufacturing presence in that market, import regulations would impact our ability to maximise our potential for customers here and across the South American markets.

China has been an important factor for the JLR growth story. How do you see the market contributing in the years ahead? What will be the other focus markets for JLR?
We are a global business operating in more than 170 markets. In 2013 we saw growth in all six of our key regions with new records set in 38 markets. Our top markets were China, the UK, the US, Russia and Germany. However, we saw the most significant year-on-year growth in Japan (up 56 percent), South Korea (up 63 percent), Brazil (up 41 percent), and the Middle East and North Africa (up 46 percent). In the coming year continued investment in new product actions will see us continue to focus on growth in both established markets such as the US and emerging markets like Brazil, Russia and India.

Given the increasing awareness related to sustainability, what kind of challenges will the auto industry, in general, and JLR, in particular, face in the future?
This is a key priority for the entire global automotive industry. At JLR, we are investing in a range of new technologies that will deliver a step change in improving the sustainability of our products. We are also making significant improvements in our manufacturing facilities and logistics operations to reduce emissions, including carbon dioxide.

The UK’s largest rooftop solar panel system, installed at our new state-of-the art engine manufacturing centre, has been designed with sustainability embedded throughout and has recently been awarded an excellent rating from the BREEAM design stage assessment for sustainable buildings.

Over the past five years, we have reduced fleet CO2 emissions by 23 percent and operating CO2 emissions by 21 percent. Waste to landfill has fallen by 75 percent and water consumption by 17 percent. The company’s Environmental Innovation Strategy to 2020 aims to use less resources and create zero waste as well as reduce its dependency on fossil fuels. Jaguar Land Rover will continue its efforts to improve its CO2 and fuel economy levels to meet the needs of its customers and deliver on its legislative obligations. We will achieve this by increasing our use of lightweight technologies, engine downsizing and hybridisation.

This interview is a part of the cover story of the April 2014 issue of Tata Review in which CEOs and MDs of ten Tata companies speak about the performance of their companies in the year gone by and their plans for the future:
Tata Capital: 'Our aim is to be among the top five NBFCs in India'
Tata Power: 'We will rekindle the spirit of growth this year'
Tata International and Trent: 'The biggest challenge is cultural diversity'
Tata Chemicals: 'In 5-7 years, our business picture will be very different'
Tata Global Beverages: 'Technology is a key pillar for our growth'
Tata Projects: 'We have come out stronger'
Tata Steel: 'We continue to grow in a difficult market'
Tata Technologies: 'Innovation is a pre-requisite for any successful company'
Titan Company: 'This year helped us introspect and become stronger'