UK: Supply chain investment critical: Jaguar Land Rover
Jaguar Land Rover is highlighting the challenge facing the UK supply chain and OEMs as the automaker and other major manufacturers gear up to take advantage of a relatively benign British automotive environment that could see production levels of 2.2m units by 2019.
Addressing an audience of 70 suppliers and 25 financial institutions at today's (21 November) inaugural 'Meet the Funder' day near the UK city of Birmingham, JLR head of government programmes, Simon Moger, urged the industry not to underestimate the challenges of meeting increased British opportunities.
"We will spend more than GBP5bn (US$8bn) this year with our suppliers in the UK, about half of the total OEM spend in the UK and around 60% of our global spend," Moger said.
"If we really want to meet these opportunities, there is so much we all need to do. OEMs are looking at working with government, [the] SMMT, banks and local partners. We are not under-estimating the challenge it will take to get there."
JLR has enjoyed extraordinary success of late, trail-blazing a path of British automotive recovery, but Moger took time to praise his fellow OEMs, who are also reaping the rewards of a reasonably healthy UK economic performance.
Moger emphasised General Motors' decision to reinvest in its Ellesmere Port plant, "fantastic news for the North West," as well as automakers' success such as BMW in Swindon and Toyota at Burnaston with 1,500 new jobs, as well as Nissan.
But with that expansion, Moger cautioned there needed to be significant extra capacity put into the UK, inward investment incentives and affordability of credit.
"The supply chain investment we require is going to be so critical," Moger said. "Natural disasters such as the Japanese earthquake have highlighted the fragility of supply chains - we want to source more locally.
"We need to help suppliers to be convinced to invest in the UK and that there is a bank [ing] industry and government that understands their challenge. Without this, we will likely receive uncompetitive quotes and ultimately a restriction in the number of suppliers able to expand in the UK.
Moger also echoed a tooling theme put forward earlier in the SMMT's funding day by KPMG, noting: "Supply chain finance can improve - we need to make sure any credit for tooling is incremental."
And as JLR looks to ramp up its production levels with increased recruitment, Moger suggested the large numbers of personnel being currently made redundant from the British armed forces, could provide a timely pool from which to hire.