Jaguar: We have our own targets and they are very ambitious

Dr Ralf Speth, the chief executive of Jaguar Land Rover, tells Angela Monaghan how JLR is flourishing in a difficult global environment.

Ralf Speth CV
Born - 1955
Education - Rosenheim University, Germany; Warwick University
Family - Married, two children
Lives - Leamington Spa and Munich
Career - Business consultant, BMW (1980), chief executive JLR

Amid the bright lights and sales patter awash at the Paris Motor Show, Dr Ralf Speth cuts an unlikely figure as one of the event's stars.

As chief executive of Jaguar Land Rover (JLR) he has much to shout about, not least the glittering launch of the F-Type Jaguar and new Range Rover, two of the show's main attractions.

But that is not Speth's style. Instead the understated German is quietly setting about ambitious growth plans for the company, which has achieved an astonishing turnaround under Speth's stewardship with a record pounds 1.5bn profit in the year ending March 2012.

Much of the talk among the show's halls is focused on the company's new products, which reflect a "pivotal point in time" for JLR, according to Speth.

Michael Fallon, the newly appointed Business Minister, is also at the show, and has held up JLR's success as a key signal of Britain's manufacturing revival. The company has already achieved a 40pc increase in sales between January and August and is on course to grow further.

It has created more than 8,000 jobs in Britain over the past two years, and has a workforce of more than 20,000. It is creating 1,100 jobs at its Castle Bromwich plant as part of its plans to revitalise the Jaguar brand, the F-Type - available from Spring 2013 - being central to that.

The new Range Rover will be built in Solihull, where JLR's parent group, India's Tata, has invested pounds 370m to make the vehicle.

In a further boost for British industry, JLR last month said it would move to 24-hour production at its Halewood plant in Merseyside, to meet growing demand for its Evoque model and create a further 1,000 jobs.

Further afield JLR has ambitious plans for other markets, not least China, where it is poised to seal a joint venture agreement with Chery Automotive. China was JLR's third largest market last year after the UK and US, with sales up 76pc to more than 50,000 vehicles.

"Jaguar Land Rover is back. Jaguar Land Rover is in good shape," says Speth. He is happy to talk about sales achieved so far, but will not be drawn into any forecasts, even for the short-term. This puts him at odds with many of his peers, who were busy in Paris predicting their own sales volumes.

"I don't want to go into the numbers game... but we are absolutely determined to establish sustainable and profitable growth."

While he recognises that the company's brands cannot be all things to all men, Speth has set his sights on new customers within the premium end of the market.

The Jaguar F-Type has been designed to appeal to younger people, who might have previously associated the brand with older men.

"There is not the one customer any more," he says.

From Paris, Speth says he will travel to Vienna and from there on to Mumbai, such are the demands on a chief executive of a company with global customers and huge ambition.

"We export between 80 and 85pc of our vehicles, for Range Rover more than 90pc of vehicles are exported. That means we have to make sure our products are in high demand out there in the fast growing markets but also in the industrial markets like Europe.

"That means we have to have research and development teams in these countries. They have a better footprint, a better understanding of the vehicles' use, how the vehicle is driven in different climate zones and what kind of requirements are necessary."

But as Britain languishes in its first double-dip recession since 1975, the eurozone remains in even deeper economic crisis, political uncertainty abounds in the US, and growth slows in China, Speth is keen to stress the external risks.

He says the full force of the blow has yet to be dealt by austerity, in Europe but also in the US.

"Everyone talks about austerity, but only a fraction of austerity programmes have been implemented so far, so at the moment people hardly feel it.

"The majority of austerity programmes are still to come and then we will see what the reaction will be of consumer behaviour. We don't know, nobody knows."

So far, however, it has been the volume car makers which have been hit, whereas Jaguar Land Rover has flourished, even in Europe.

But there are many hurdles facing the British car industry, and Speth says action is required now if hundreds of billions of pounds worth of opportunities are not to be lost to other countries in the coming years.

"We have to find a way from now, today. It will take a certain period of time. We have to make sure that we can be competitive."

Speth, like many prominent figures across British industry, is encouraged by the Government's stated commitment to developing and enhancing Britain's technological expertise.

Vince Cable's industrial strategy is to be welcomed, and strong collaboration is essential if Britain is to overcome significant obstacles to become a technological winner.

"If you look around, we still have currency imbalances in the system, we don't have free and fair trade issues, we have economic challenges all around the world.

"We don't know what is happening tomorrow in Europe, nobody really understands what's really going on in China, and therefore it's very good if we can find a new element of collaboration and find the best way forward for industry and be competitive at the end of the day," Speth says.

But he is clear it is not just about a closer relationship with policy-makers.

"It's not just about collaboration between government and industry, it's also about finding new ways and processes to research, develop and create new products, because at the moment we are at a change of technology in the automotive industry.

"The automotive industry is the most complex industry on Earth, with the most complex consumer product on Earth - the car.

"There are many new challenges coming up, and nobody has the answers so far, neither in Europe, nor the US, nor China, wherever you go."

The UK does have great engineers, but the capability of Britain's supply chain needs to increase, stronger ties with academia are needed, and the right money has to be put behind the right technology he says. This is the challenge facing companies and Government alike, and failure to achieve is likely to come with considerable long-term costs - not least the loss of young talent and the latest technologies.

On that note, Speth is in optimistic mood, and believes the appeal of manufacturing and engineering as a career option is under revival. It would be in tune with the desire among policy-makers to move the economy's reliance away from debt-fuelled spending and financial services, and back towards manufacturing and exports.

"We are seeing by far higher interest from graduates. We have just welcomed 312 graduates to [our engineering and design centre at] Gaydon. They are interested, they want to do something with their career, they want to perform."

While JLR might not be able to provide the big bonuses bankers enjoy, Speth says the company offers a huge variety of opportunities in different fields.

"We can offer a range of jobs in whatever area you're interested in from electronics, science, production technologies, media, sales, marketing.

"We can offer interesting jobs with competitive remuneration at the end of the day, and we have product identification."

He is delighted by the company's ability to attract graduates and seems unfazed by all the attention being heaped on the company by ministers, despite his cautious approach and the external expectations which are rapidly mounting.

"It's not pressure on the company.We have our own targets, our own objectives, and they are very ambitious. We have to go our own way."

So far it has served him well.

FACTS:

370m pounds - The amount Jaguar Land Rover is investing in the new Range Rover. The investment includes the installation of a new aluminium body shopat the company's Solihull plant 8bn pounds - JLR is generating close to this figure of export revenues each year

1,100 - The number of new jobs being created at the company's plant in Castle Bromwich, West Midlands

85,000 - In the three months to June 30, Jaguar Land Rover sold more than 85,000 cars, helping to lift pre-tax profits by 32% to pounds 333m in the first quarter of the company's financial year.

1.5bn pounds - The company's profit in the year to March 2012