Automotive industry leaders from around the world came together to discuss the burning issues of vehicle technology, purchasing, manufacturing and supply chain at the Automotive Leaders Summit at the Titanic Hotel in Liverpool on June 15 & 16.
The 2016 Automotive Leaders Summit started off on the 15th June with exclusive visits to Jaguar Land Rover’s Halewood plant and Vauxhall General Motors’ Ellesmere Port facility. Delegates got unique insights to some production and supply challenges and how they are overcome in these two very successful but very different operations. The day was rounded off with a networking reception at the hotel with a barbecue before moving into the conference agenda on the morning of the 16th.
The first session was entitled: The state of the UK automotive industry and expected future developments. John Leech, Partner and Head of Automotive at consultants KPMG gave a presentation that detailed the record levels of UK car production, noting that the all-time record in 1972 – 1.5 million was topped by 2015’s 1.6 million. He said that many observers have talked of reaching 2 million by 2020 but he saw this as unlikely. Leech showed some estimates of Jaguar Land Rover’s (JLR) European production growth, showing Jaguar content of JLR ramping up. Encouraging for the supply base was the observation that more than half of JLR’s components and systems were sourced from the UK supplier base.
He showed illustrations of how JLR, Nissan and Vauxhall’s sales and production is fuelling growth in the UK automotive sector. Speaking on the Brexit debate, Leech talked of WTO tariff being 10% on cars and 3% average on car components. He pointed out that Sterling may continue to weaken and thus benefit UK OEMs. “I can’t underline enough how critical the EU Referendum is to the industry, almost under any scenario it looks like employee social security and taxation will change dramatically.
There are some things that are highly likely to change if UK leaves the EU, you (the audience, OEMs and suppliers) should be planning now for a possible exit, hedging finance and securing your supply lines.”
Katherine Worthen, Vice President, Purchasing and Supply Chain Europe at General Motors addressed one of the themes of the forum with her presentation on: Where will the automobile take the customer, the industry and its supply chain next?
Worthen sought to illustrate the answers to this and questions like: ‘What is it that purchasing and supply chain need to be different in the face of changing demands from consumers and the industry?’ She spoke of collaboration with suppliers and engaging better with them and looking at the full enterprise cost of every part and system, saying: “We want our suppliers to bring innovation to us, we have not been as open as we could be,” and that she and her team were, “Looking for further improvements in quality and even more defect-free vehicles.”
Worthen outlined the ‘Champion process’, “We provide a dedicated champion for each supplier,” and showed GM’s Supplier Dashboard. She described this as a “test’ applied to every supplier relationship that highlights how we deal with them and nurture their creativity as well as measure their quality and delivery levels.”
The connected car became one of the major themes of the whole event and Worthen talked of how 20 years of Onstar has given GM a head start on connectivity, also citing Maven – new brand of connected car, advanced diagnostics, with more than 25 million customers around the world.
Andrew Wareing, General Manager Purchasing, Nissan Europe used his speaker segment to celebrate 30 years of manufacturing Nissan in the UK and showed a video with a global overview of vehicles and systems that we have not seen in the UK.
Speaking about about Nissan in the UK, he said: “We are UK’s biggest carmaker (1 in 3 cars made in UK is a Nissan), with 6,800 staff and we have made 8 million cars since 1986, which is two cars every minute.”
Wareing talked of the ongoing investment in the UK, “We are still very much in a growth phase in the UK. We just invested £250 million in Sunderland for Infiniti and this created 300 new jobs, this is one of only three sites global validated and qualified to make Infiniti cars.”
An exciting statement for suppliers hinted at the supply opportunities for a upcoming vehicle programme. “We have been given next generation Juke, SOP will be 2018. I invite suppliers to talk to me about this,” he said.
Each session ended with a lively question and answer debate, and Ruud Vossebeld of Inform asked Wareing about Nissan’s ongoing collaboration with Daimler.
Wareing said that “We have over 30 projects of cooperation globally, we will further collaboration in future, we have had a few false starts – been jilted at the altar a few times. But the whole industry will have to do more cooperation.
After a networking break, the Right Honourable Anna Soubry, Minister for Small Business, Industry and Enterprise spoke passionately about the dangers of UK leaving the EU. She pointed out that the local content of average UK-built car is 42% and this would be hit hard by tariffs that could come into place if the UK should Brexit. Soubry spoke of the role of UKTI, how it has created more than 17,000 jobs and seen more than £2.4billion invested in automotive in 2014.
How connected technology will give rise to more efficient supply chains was the title of a panel discussion, with some presentations, chaired by industry guru Bernard Molloy, Global Industry Logistics Director at Unipart Logistics. He opened the debate with a talk on ‘super ports’, the opening of the Panama canal and what effect this will have on the Northern powerhouse of shipping and how at one time Liverpool handled 80% of the UK’s ship traffic.
Molloy asked Neil Hurst, General Manager, SCM at Nissan UK about the challenge that Neil had following the tsunami and how this affected Nissan. Hurst said: “Nissan was not as badly affected as many OEMs, now our challenge is working with Renault in our Alliance and how what suppliers do for us has changed.”
Jamie Scott, Business Development Director at Paragon Remarketing spoke next, about the used and new car retailing segment; he talked of the 8 million new and used car deals each year in the UK and the 2.5 million used cars generated by the UK marketplace. He showed graphs of how growing new car sales meant growing releases of used cars onto the market and how this puts pressure on used car market management. Scott spoke of growing online sales and how automotive business is lagging behind food and consumer goods purchases in volume terms.
Martin Dougherty, Vice-President of Business Development & Account Management, Automotive at DHL Supply Chain talked of the importance of keeping a competitive advantage through the use of new technology, how connectivity in the supply chain applied to many of DHL’s business areas but particularly in DHL’s automotive business. Dougherty showed a video which illustrated the rapidly-rising rate of change in connectivity and how human-only traits will become valuable ‘commodities’.
He showed another video showing a new robot called Sawyer, which came from a strawberry-picking application, that can be manipulated by hand to train it to order pick, and AGVs that can follow operators and be filled manually, delivering autonomously to a drop-off point when full.
Nigel Stevens, CEO of Transdev UK and Ireland, talked of the ‘joining-up’ of services, exemplified by Transdev broad spread of mobility services, using taxis, including hydrogen powered zero emissions Green Tomato taxis, through trams, buses, trams, UberHOP ridesharing services. He showed a chart showing the number of private hire vehicles and how it jumped by 26 % from 2005-2016, where black cabs has stayed almost stagnant, and not from buses or trains, showing how the users are coming mainly from private car owners.
After a networking lunch, Bo Inge Andersson, former head of Saab Cars, Global Purchasing Director of General Motors and CEO of both GAZ Group and AvtoVaz in Russia and now head of Bo Group Enterprises, his new consultancy operation, took to the stage and made some illuminating points about the global industry. “In the last 10 years, in cars and light commercials, has grown by 25%. Last year, based on statistical data, 91 million vehicles were produced. In 2005, 71 million vehicles were made. Most of this growth came from China, where production went from about 5 million to 23 million units,” he said, adding that he was optimistic about the industry generally: “The same people that forecast this growth 10 years ago, say that in another 120 years, the industry will grow another 25%. An interesting study is to examine how many cars there are, per 1000 people. In India today there are 18 cars per thousand people. There are 709 in US, about 509 in Great Britain, in Russia 300, in Brazil 350 and in China, 125.
“My reflection on what I have heard at this conference today would be to say to everyone: Ask yourself, how much are you doing to impress others, and how much are you doing to solve problems and make more money? I know that all of you make a lot of money, and I like that, because you should if you are working in logistics or supply chain.”
Margaret Beever, Senior Purchasing Manager, Jaguar Land Rover moderated the ‘Future of personal and freight transportation’ session which started off with Dirk-Jan de Bruijn of the EU Truck Platooning Challenge speaking of the initiative by the Netherlands government to prove the viability of close platooning using trucks. “What is key in this challenge is that we make a union between all the stakeholders,” he said, explaining that: “Last week we had a meeting with 40 carriers to discuss this. We believe as a government, that it is important to move platooning on to the next stage. We organised meetings with many professionals to try and forecast where platooning will be in five years. We realised that the truck OEMs were only interested in joining if we could not promise some large scale exercises.”
Iain Forbes, Head’ Centre for Connected and Autonomous Vehicles (CCAV) spoke next and asked why governments should be interested in autonomous vehicles, and went on to answer his own question. “There are a few reasons, the first is road safety. If technology exists that can make roads safer, the government are interested,” he said, adding: “There are also tremendous opportunities for growth in developing world-class industry solutions for the industry, here in UK. We want the UK to be one of the first places in world where autonomous driving is deployed. The UK is already ready to test here, with no special permits or laws needing developing or changing.
Jurgen Muller of the Marketing Strategies Automotive division of Bosch then gave some insights to the supplier’s view of the autonomous and connected technology. “This is the biggest revolution the auto industry has seen,” he said. Muller examined the motivation behind autonomous driving, showed how ABS cut fatalities on the road, he talked of the development of ESP and posited the view that autonomous driving is the next major life saving technology.
Moving on to vehicle production technology, Andy Smith, Chief Engineer – Materials and Analysis at Gordon Murray Design showed the iStream manufacturing system, showing how it fits into the future of more economical and cleaner greener cars. He explained how scalable the system is, from low volumes like TVR, to hundreds of thousands of vehicle per year. “We use a honeycomb core which brings down the panel cost enormously from pure carbon fibre panels – 30 euros versus 300 for carbon, for the same panel.”
The last session of the day tied together the themes of the event. Speakers and panel discussion members Gareth Jones from the SMMT, Lawrence Davies of UK Trade and Investment, Ian Constance from the Advanced Propulsion Centre and Carol Holden OBE, from the Northern Automotive Alliance generated a lively debate with the delegates on subjects ranging from investment and stability in UK manufacturing, self-driving vehicles and the infrastructure needed to support them, to the effects of new technology on the supply chain in the UK and around the world. Discussions carried on over the GEFCO sponsored Gala Dinner and for some, late into the night, rounding off a highly successful event.