International Automotive Summit 24 November 2009

The Society of Motor

Manufacturers and Traders

International Automotive Summit 24 November 2009

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I am delighted to welcome you here this afternoon to SMMT’s first International

Automotive Summit. We meet at an extremely important time, having endured the most difficult economic conditions, and this event gives us the chance to look beyond the recession and recognise the opportunities that lie ahead. Across the political spectrum there is widespread recognition that the UK cannot thrive on financial services alone. Manufacturing, and particularly automotive manufacturing, has a vital role to play in a more balanced economy

and will be one of the generators of jobs and prosperity in the years ahead. Government has recognised the strategic national importance of our sector and

through its support for the New Automotive Innovation and Growth Team’s report, has committed to a long-term partnership with the motor industry. In terms of our future, we know the global demand for motor vehicles will

return. The fast growing markets in Brazil, India and China will continue to embrace personal mobility at faster rates and the replacement cycle for

vehicles in developed markets will return. But this future demand will be for cleaner, safer and more fuel-efficient vehicles that can be developed and manufactured anywhere in the world. The challenge for the UK motor industry, and the government, is how to ensure the UK retains and grows its share of the developing global market.

The UK’s automotive strengths – efficiency, productivity, innovative R&D and a flexible workforce have already attracted a diverse presence of vehicle manufacturers from Europe, Japan, Malaysia, China,

Kuwait, India and the US. We should be proud that the UK is seen as an important location for the global automotive industry but it should also inspire us to work harder to build and maintain close working relationships with the key decision makers in these global enterprises. The UK is home to 27 car and commercial vehicle manufacturers including seven volume car

manufacturers, more specialist sports car producers than any other country in Europe and a base for 19 of the top 20 global component suppliers. We are the fourth largest vehicle producer in Europe, home to some of the most productive automotive plants and are the second largest producer of premium cars in the world. What is more, the vehicles we produce, many of which you would have had an opportunity to see as you came in this afternoon, are admired the world over. Whether it’s a Jaguar, MINI, Rolls-Royce, Aston Martin or Bentley, these are iconic products admired the world over and enduringly British.

At a time of uncertainty and economic challenge, I am confident that the UK’s strength as a globally competitive and highly productive manufacturing base can help secure new investment. Taking a lead in

the transition to a lower carbon future presents a significant opportunity, not just for the motor industry, but the wider UK economy. We have a superb line-up of expert speakers here today who are each looking forward to sharing their

knowledge and stimulating debate. I would encourage you to get involved and hope the topics discussed here this afternoon will lead to greater opportunities for collaboration and partnership both within our industry and the stakeholders, government departments and media it reaches on a daily basis.

Paul Everitt

Chief Executive The Society of Motor Manufacturers and Traders

Chief executive’s welcome

The Society of Motor Manufacturers and Traders (SMMT) supports and promotes the interests of the UK automotive sector at home and abroad. Working closely with member companies, SMMT acts as the voice of the motor industry, promoting its position to government, stakeholders and the media. Through national and

international events, UK and European lobbying activities, reliable automotive data and practical advice, SMMT works to strengthen the UK motor industry, attract inward investment and develop international business opportunities. One of the largest and most influential trade associations operating in the UK, SMMT’s resources, reputation and unrivalled automotive data place it at the heart of the UK automotive industry.

The Society of Motor Manufacturers and Traders

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Welcome 14:00 – 14:05 Opening remarks and introductions by event moderator Professor Richard Parry-Jones, chairman of the New Automotive Innovation and Growth Team and newly formed Automotive Council and former chief technical

officer, Ford Motor Company. Lord Peter Mandelson, secretary of state for business, innovation and skills 14:05 – 14:25 Recognising the valuable contribution that manufacturing makes to the UK economy and the strategic national importance of the automotive sector, government has engaged with industry and delivered real solutions through the current recession. Lord Mandelson’s keynote speech will provide the opportunity to

consider government’s long-term intention for an ongoing partnership with the sector.

Ravi Kant, vice-chairman, Tata Motors Ltd 14:25 – 14:45 Tata Motors' Ravi Kant will provide a unique perspective and insight into the UK both as a location for automotive investment and as a partner for the economic powerhouse that India is becoming.

Session one: Building a balanced economy – the future role of automotive 14:45 – 15.25 There is an emerging political and economic consensus that manufacturing will be critical to the UK's post-recession industrial future with the first formal session of the afternoon questioning the actions needed to attract the inward investment that will drive future employment and prosperity in the automotive sector.

Mark Prisk MP, shadow business minister, Conservative Party

Dr Matthias Holweg, director, Centre for Process Excellence and Innovation, Cambridge Judge Business

School

Steve Radley, chief economist and director of policy, Engineering Employers Federation

Refreshments to be served in the St. James’ Suite (15.25 – 15.45)

Session two: The technology challenge 15:45 – 16:30 At a time when many are speculating about the basis of future economies, the motor industry is set to generate new technology and innovation at unprecedented rates. It is inevitable that global demand for vehicles will continue to rise and it is our challenge to ensure these continue to be progressively cleaner, safer and more fuel-efficient.

Opening address and session chair: Professor Neville Jackson, Group Technology Director, Ricardo plc Panellists:

Jamie Borwick, founder and chairman, Modec

Jerry Hardcastle, vice president, vehicle design and development, Nissan Europe

Dr Wolfgang Steiger, director, future technologies, Volkswagen Group

Session three: Conflicting influences on buying behaviour 16:30 – 17:15 While vehicle manufacturers invest heavily in developing and producing cars that are increasingly safer, cleaner and affordable, consumers are critical to the rate at which these products arrive on UK roads. Ultra-low carbon technology is increasingly under the spotlight but with brand loyalty, advertising, taxation

and government incentives all vying to influence buyer decisions, how closely do consumer perceptions match the opinions of those in the industry?

Opening address and session chair: Joe Greenwell, chairman, Ford of Britain and president, Society of Motor Manufacturers and Traders Panellists:

Steve Fowler, editor, What Car?

Ken Gibson, motoring editor, The Sun

Ian Webber, category director - Automotive, Yahoo!

Closing address 17:15 – 17:30 Paul Everitt, chief executive, The Society of Motor Manufacturers and Traders

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Professor Richard Parry-Jones, chairman of the NAIGT Richard is an automotive engineering leader who worked for the Ford Motor Company from 1969-2007. Until his retirement, he spent nearly ten years as group vice-president in charge of R&D for all of Ford and its subsidiary companies worldwide, leading a staff of 30,000

professionals in a network of product development centres in 15 countries. He was also the company's chief technical officer for the last eight years. During his career at Ford he worked in many countries outside the UK, including seven years in the US and five years in Germany. He was responsible for developing all Ford of Europe cars launched between 1993 and 2008, as well as many Jaguar, Land Rover, Aston Martin and Volvo products.

Lord Peter Mandelson, secretary of state for business, innovation and skills Lord Mandelson was appointed secretary of state for business, enterprise and regulatory

reform in 2008. He previously served as European commissioner for trade from 2004. Prior to that he was a Member of Parliament for Hartlepool and served in the Cabinet as trade and

industry secretary and Northern Ireland secretary. On 8 June 2009, Lord Mandelson was appointed first secretary of state and Lord President of the Council as well as remaining secretary of state for the newly-formed Department for Business, Innovation and skills which was the former Business, Enterprise and Regulatory Reform and Innovation, Universities and Skills departments.

Ravi Kant, vice-chairman, Tata Motors Ltd Ravi Kant is the vice-chairman of Tata Motors Ltd, India’s largest automobile manufacturing company. Previously, he was managing director and has been with the company since 1999. He was associated with the acquisition of Jaguar and Land Rover and Daewoo

Commercial Vehicles, Korea as well as the introduction of several new products like Nano car, Ace small truck, world truck and a range of buses. Ravi Kant has had extensive experience in consumer durables and the automobile industry. He was previously director, Phillips India Ltd looking after consumer electronics.

Dr Matthias Holweg, director, Cambridge Judge Business School Dr Matthias Holweg is a reader in operations management and director of the Centre for Process Excellence and Innovation at the Judge Business School, University of Cambridge. He is a principal investigator on several research projects, including the International Motor

Vehicle Program (IMVP) where his research focuses on the dynamics of competition in the global automotive industry. He has spoken and published widely on managing global supply chains, and advised several government agencies on industrial policy matters. Before joining the faculty at Cambridge, he held positions at the Massachusetts Institute of Technology and

at Cardiff Business School.

Mark Prisk MP, shadow business minister, Conservative Party Mark Prisk was elected to the House of Commons in June 2001, as the Member of Parliament for Hertford and Stortford. A Conservative Party member for over 20 years, he led many local and national campaigns and elections, and had stood for Parliament in 1992 and 1997. He is

vice chairman of the All-Party Parliamentary Small Business Group, chairman of the East Hertfordshire Business Forum, and honorary vice president of the Small Business Bureau. In

November 2002, he was appointed shadow financial secretary and in November 2003, he became shadow minister for economic affairs. In November 2004, he became an opposition whip. He has been shadow minister for business and enterprise since December 2005.

Steve Radley, chief economist and director of policy, EEF Steve Radley has been EEF’s chief economist since January 2000 and director of policy since June 2008. He is responsible for the EEF’s work on the economy and industrial policy. This encompasses both macro-economic issues such as the state of manufacturing,

interest rates, taxation and productivity and competitiveness areas like investment, skills, trade and innovation. He is also responsible for the economic analysis relating to EEF’s work on environmental and energy policy. Since June 2008 he has overall responsibility for EEF’s work on representation and information and research.

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Dr Wolfgang Steiger, director future technologies, group external relations Volkswagen AG Wolfgang Steiger is director future technologies within the external relations department of the Volkswagen Group. During his career he has worked for Robert Bosch GmbH, The

Battelle Institute and Adam Opel AG where he was responsible for diesel engine development and test. In 1997, he joined the Volkswagen AG group research department

where he has been responsible for powertrain research. He is also a member of the scientific research board of the German car manufacturer FVV and of the mineral oil company, DGMK.

Steve Fowler, editor of What Car? Magazine Steve Fowler has been editor of car buyer’s guide What Car? since 1999. Under his editorship, What Car? now includes the award-winning website whatcar.com and womens’ car buying advice website, evecars.com. He was the only journalist invited to give evidence to the

Competition Commission’s open hearing into new car pricing and supply in 1999, while more recently he was invited by government to help launch the Act on CO2 campaign. He also supported the car industry’s call for a scrappage scheme. He is a spokesperson on all things motoring with expertise ranging from driving standards and car colours to future technologies and the health of the car industry.

Joe Greenwell, chairman Ford of Britain and president, SMMT Joe Greenwell, Ford of Britain chairman since early 2009, is president of the Society of Motor Manufacturers and Traders. He has previously been vice president, marketing and operations, responsible for Ford of Canada, Ford of Mexico, Worldwide Direct Market

Operations and Global Marketing. He has enjoyed a long and successful career in the automotive industry. Previously, he was chairman and CEO of Jaguar Land Rover, and actively involved in numerous community support projects. He continues to support charity through his presidency at BEN, the motor industry and allied trades benevolent fund.

Jerry Hardcastle, vice-president, Nissan Motor GB Jerry Hardcastle is vice president, vehicle design and development for Nissan Motor GB. With a BSc from Sheffield City Polytechnic and a master’s degree from the University of Warwick, Jerry began his career as a student apprentice engineer with the National Coal Board. After

four years, he moved on to work as a project engineer for engine design at Austin Rover. Since 1999, he has worked for Nissan Motor GB, beginning his tenure as a manager for the Primera Joint Development at the Nissan Technical Centre in Cranfield and was a director for five years prior to becoming vice-president.

Professor Neville Jackson, group technology director, Ricardo plc Neville Jackson is responsible for developing the future global vision of automotive and energy technology at Ricardo. He is chairman of the UK Low Carbon Vehicle Partnership, a director of CENEX (the UK Centre of Excellence for Low Carbon Vehicles), a visiting Professor at

the University of Brighton and a member of the Engineering and Physical Sciences Research Council Industry User Panel. He also sits on the EUCAR Programme Review Board and is a member of the steering group of the European Road Transport Research Advisory Council. His career has focused on research and demonstration programmes and he is the author of over 70 technical papers and keynote presentations.

Jamie Borwick, chairman, Modec Ltd

Modec Ltd is a manufacturer of zero emission, battery-powered urban delivery vehicles able to

carry a two-tonne payload for 100 miles at 50mph. He is a director of Hansa Trust plc (a quoted investment trust), managing director of property company Love Lane Investments Ltd, and chairman of Federated Trust Corporation Ltd. He was formerly CEO of Manganese Bronze Holdings plc, which is best known for manufacture of the London taxi. Jamie Borwick is also chairman of Route2Mobility Ltd which funds wheelchairs and scooters for disabled people as part of the Motability scheme.

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Ian Webber, category director - Automotive, Yahoo! Ian Webber is category director for automotive at Yahoo!, a role which sets the vertical strategy for Yahoo!’s UK and pan-European business and advises automotive clients how best to leverage the opportunities afforded by digital media. Ian has over 12 years media

experience in the automotive sector, both in print and online, and has full responsibility for the automotive category growth and innovation across search, display and mobile. On behalf of SMMT and specifically for this event, Yahoo! Undertook a survey of around 6,000 UK motorists to assess their opinions and attitudes towards the UK motor industry.

Ken Gibson, motoring editor, The Sun A veteran of the motoring world, with over 40 years as a journalist, Ken Gibson started his career with the Hexham Courant in his native Northumberland. Since then, he has led a long and varied career covering every aspect of journalism as sports editor, industrial editor, film

critic, news editor and night editor at the Birmingham Post, and head of news for the Birmingham Evening Mail. Ken switched to motoring journalism 16 years ago, as motoring correspondent of The Sun. He waspromoted to motoring editor and been the driving force behind The Sun’s motoring coverage, expanding from one page a week to a 12-page motoring supplement. He also writes daily news stories and actively campaigns to promote the British motor industry.

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2004 2005 2006 2007 2008

Automotive manufacturing sector turnover (£bn) 46.9 48.2 49.3 53.2 52.5

Share of total transport manufacturing turnover (%) 67.1 67.7 66.7 66.6 65.2

Total net capital investment (£bn) 1.4 1.3 1.4 0.9 0.8

Automotive sector value added (£bn) 9.4 9.4 9.9 10.3 10.1

Total employees directly dependent on the UK automotive sector

866,000 874,000 841,000 841,000 827,000

Value of exports (£bn) 22.5 23.7 24.1 24.5 26.6

Percentage of total UK exports (%) 11.8 11.2 9.9 11.8 10.6

All automotive sectors - valued added share of GDP (%) 3.4 3.3 3.2 3.3 3.1

UK share of global passenger car production (%) 3.8 3.5 3.0 2.8 2.9

Number of UK volume car manufacturers 9 8 7 7 7

Number of UK commercial vehicle manufacturers 9 9 9 9 9

Sector profile

Paul Everitt, chief executive, Society of Motor Manufacturers and Traders

Paul Everitt has been chief executive of the Society of Motor Manufacturers and Traders since

January 2008. Prior to joining SMMT as chief executive, he was the director of civil air transport and communications at the Society of British Aerospace Companies. He has more than 17 years experience in public policy and campaigns in the transport sector and was previously with SMMT as head of communications, economics and policy. He played a major role in launching and developing the motor industry sustainability report, the annual CO2 report and took a lead on a range of high profile policy campaigns.

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UK motor industry at a glance

Manufacturer Vehicle

Alexander Dennis Enviro200 single deck minibus

Bentley Bentley Continental Supersport

DAF DAF Hybrid Truck

Ford Ford Transit ECOnetic

Honda Honda Jazz

Jaguar Jaguar XJ

Land Rover Range Rover

Lotus Lotus Evora

MINI MINI E

Nissan Nissan Qashqai

Rolls-Royce Rolls Royce Phantom Coupé

Vauxhall Astra Elite

BMW Four-cylinder petrol engine

Ford ECOnetic diesel engine

MINI Four-cylinder petrol engine

Vehicles and engines on display

More than 40 companies manufacture vehicles in the UK

1.6 million cars and commercial vehicles produced each year

Home to seven volume car manufacturers and eight CV manufacturers

UK automotive manufacturing supplies over 100 markets worldwide

Industry facts

Over 800,000 UK jobs directly depend on automotive manufacturing

More specialist sports car manufacturers than any other

country in Europe

Nineteen of the top 20 global components suppliers have a base in the UK

£1 billion per year spent on UK R&D, maintained throughout the decade

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1 Alexander Dennis Guildford and Falkirk

2 Aston Martin Gaydon

3 Bentley Crewe

4 BMW MINI Oxford

5 Caterham Dartford

6 Cummins Darlington

7 Dennis Eagle Warwick

8 Euromotive Hythe

9 Ford Bridgend, Dagenham and Southampton

10 Honda Swindon

11 IBC Luton

12 Jaguar Birmingham, Halewood

13 John Dennis Coachbuilders Guildford

14 Land Rover Solihul, Halewood

16 Leyland Trucks Leyland

17 Lotus Norwich

18 LTI Coventry

19 Mellor Coachcraft Bolton

20 Mercedes-Benz Woking

21 Minibus Options Whaley Bridge

22 MG Motors Longbridge

23 Modec Coventry

24 Morgan Malvern

25 Nissan Sunderland

26 Optare Leeds

27 Plaxton Scarborough

28 Rolls-Royce Goodwood

29 Smith (Tanfield) Tyne and Wear

30 Toyota Burnaston and Deeside

31 Vauxhall Ellesmere Port

32 Warnerbus Dunstable

Key manufacturing sites

*15 LDV (ceased production 2009), Birmingham

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www.smmt.co.uk

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www.smmt.co.uk

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