GOOD MORNING! [logo removed to reduce file size]


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GOOD MORNING! [logo removed to reduce file size]

  1. 1. GOOD MORNING! [logo removed to reduce file size] Before we start please have a look at the Automotive News Europe article (5 industry developments) Presentation at the University of Birmingham 21 February 2001
  2. 2. Francis Evans DTI Automotive Directorate [logo removed to reduce file size] “ Helping the UK-based vehicle and components industry compete and win in world markets” Presentation at the University of Birmingham 21 February 2001
  3. 3. THE UK AUTOMOTIVE INDUSTRY <ul><li>8 global vehicle manufacturers: </li></ul><ul><li>Honda Renault/Nissan </li></ul><ul><li>PSA VAG (Bentley) </li></ul><ul><li>Toyota Ford (PAG) </li></ul><ul><li>GM BMW (MINI, Rolls-Royce) </li></ul><ul><li>MG Rover Group </li></ul><ul><li>40+ Low-volume manufacturers </li></ul><ul><li>Motorsport - a £2bn sub-sector </li></ul><ul><li>17 of the world’s top 20 Tier 1 companies </li></ul><ul><li>1999 production was a 25-year high </li></ul>
  4. 4. VEHICLE MANUFACTURERS IN THE UK 1999-2000 scoreboard WINS LOSSES BMW MINI (Oxford) Rover R30 (Longbridge) Jaguar X400 (Halewood) Ford Fiesta (Dagenham) GM new Vectra (Ellesmere Port) Ford Escort (Halewood) IBC/Renault van (Luton) GM Vectra (Luton) Toyota Corolla 3-door (Burnaston) Honda Logo (Swindon) Honda new Civic and CR-V (Swindon) Ford new Transit (Southampton) Nissan Micra (Sunderland)
  5. 5. INWARD INVESTMENT 1999/2000 757 projects leading to 52,780 new jobs 40% of all inward investment to the EU Country Sector USA 48% IT & Internet 31% Germany 8% Automotive 13% Japan 8% Electronics 10% Canada 6% Engineering 8% France 6% Telecoms 8% Rest of EU 13% Finance 8% Rest of world 11% Other sectors 22% Source: IBB
  6. 6. VIEWS FROM THE INDUSTRY &quot;Despite the very high level of the pound which continues to put a substantial strain on our manufacturing business, the UK continues to be a good place to manufacture and this optimism is helped by the continuing commitment and developing skills of our workforce.&quot; Quiz Question 1 – who said this on 3 May 2000?
  7. 7. VIEWS FROM THE INDUSTRY &quot;Considering the dramatic deterioration of general conditions, we had however reached the limit to what we could endure and accept in commercial and economic terms. We therefore took action, making the strategic decision on 16 March 2000 to give up Rover and to reorient the BMW Group.&quot; Prof. Joachim Milberg, Chairman, BMW Group at the company’s AGM in Munich 16 May 2000
  8. 8. VIEWS FROM THE INDUSTRY &quot;It’s a very unpleasant industry. It’s a beastly environment with some very unreasonable demands and pressures being put upon all the people that operate in it.&quot; Quiz Question 2: which company’s Chief Executive said this (commenting on the sale of his company’s automotive components business) 26 June 2000
  9. 9. THE LESSONS OF 1999-2000 (MANUFACTURERS) 1 Make cars that people want to buy at prices they are willing to pay 2 Import a high proportion of components from the Euro-zone (or central Europe) 3 Produce for the UK market or exports to the USA rather than the Euro-zone 4 Use fewer platforms but engineer more different models from each one: scale + innovation = profit
  10. 10. THE LESSONS OF 1999-2000 (COMPONENT SUPPLIERS) 1 Improve processes to remain competitive despite currency fluctuations and higher cost base; achieve global scale through consolidation 2 Increase value-added through innovation, taking on product development role from the VMs 3 Move into higher-margin markets: aftermarket, motorsport, aerospace, engineering consultancy deliver . . . diversify . . . or disappear
  11. 11. THE SUPPLY NETWORK (1) <ul><li>Systems integrators (Delphi, Magna, Dana, Visteon) </li></ul><ul><li>Module suppliers (GKN, Valeo, Johnson Controls) </li></ul><ul><li>Sub-assembly suppliers (Stadco, Plastic Omnium) </li></ul><ul><li>Component makers (Tier2/3/4) </li></ul><ul><li>Process sectors (metal finishing) </li></ul><ul><li>Proprietary products (tyres, ICE) </li></ul><ul><li>Materials (steel, glass, rubber, plastic) </li></ul><ul><li>Quiz Questions 3-5: Name 3 quoted UK suppliers </li></ul><ul><li>other than GKN, Corus, TI Group and Mayflower </li></ul><ul><li>Questions 6-8: After Delphi and Visteon, who are the next 3 biggest global suppliers (by turnover)? </li></ul>
  12. 12. THE SUPPLY NETWORK (2) <ul><li>How to compete? See Hamish McRae article and Radshape case study. </li></ul><ul><li>Product innovation (Bosch common-rail) </li></ul><ul><li>Manufacturing innovation (TI Hydroforming) </li></ul><ul><li>A name customers want (Recaro, Connolly) </li></ul><ul><li>Exclusivity (Alpina, AMG, BBS wheels) </li></ul><ul><li>Systems supply (Magna, Dana) </li></ul><ul><li>SILS (Delphi at Ellesmere Port) </li></ul><ul><li>Tooling and body design (Mayflower) </li></ul><ul><li>Styling & engineering (Ricardo, MSX, Lotus) </li></ul><ul><li>Prototyping & short-run components </li></ul>
  13. 13. THE SUPPLY NETWORK (3) <ul><li>The ultimate supply solution – build the vehicle. </li></ul><ul><li>Quiz Questions: who builds these cars? </li></ul><ul><li>Peugeot 406 Coup é </li></ul><ul><li>Porsche Boxster </li></ul><ul><li>Chrysler PT Cruiser and Voyager (Europe) </li></ul><ul><li>Ford Galaxy </li></ul><ul><li>What is the VM’s core competence? </li></ul>
  14. 14. TOMORROW’S TECHNOLOGIES <ul><li>NOW </li></ul><ul><li>Self-dipping mirrors, automatic lights and wipers, voice-activated controls, night vision, F1 gearshift, satellite navigation, accident alert, hybrid powertrain </li></ul><ul><li>1-5 YEARS </li></ul><ul><li>Collision-avoidance radar, brake-by-wire, smart tyres, 42-volt electrics, fuel cells for systems, remote diagnostics, flat speakers, cam-less engines </li></ul><ul><li>5-10 YEARS </li></ul><ul><li>Fuel cells for motive power, steer-by-wire (joystick?) automatic Motorway mode, national monitoring of vehicle speed & location </li></ul>
  15. 15. THE KNOWLEDGE-DRIVEN ECONOMY “ In the global economy, capital is mobile, technology spreads quickly and goods can be made in low cost countries and shipped to developed markets. British business therefore has to compete by exploiting capabilities which our competitors find hard to imitate. The UK’s distinctive capabilities are not raw materials, land or cheap labour. They must be our knowledge, skills and creativity.” Our Competitive Future December, 1998
  16. 16. A WORLD-CLASS SUPPLIER BASE: AUTOMOTIVE DIRECTORATE’S MODEL G L O B A L I S A T I O N Innovation Education and skills Company improvement
  17. 17. [email_address] or telephone 0121 212 5158 [picture removed to reduce file size]
  18. 18. ANSWERS! <ul><li>1 Nick Reilly announcing that the Vectra was coming to Luton with a £189m investment </li></ul><ul><li>2 Britax – now making aircraft seats </li></ul><ul><li>3 Pilkington, Wagon, Avon Rubber, Tomkins, Torotrak, Trafficmaster, McKechnie – others? </li></ul><ul><li>Bosch $16bn </li></ul><ul><li>Denso $15bn </li></ul><ul><li>Goodyear $13bn then Dana, Michelin, JC all $12bn </li></ul><ul><li>Bertone, Turin, Italy </li></ul><ul><li>Valmet, Finland </li></ul><ul><li>Steyr, Austria </li></ul><ul><li>Volkswagen, Portugal </li></ul>