The CEO of the Automotive Investment Organisation, UKTI on promoting British tech, getting Indian Tier 1 and 2 suppliers to invest in the UK, and enabling an increased level of industry-academia connect.
Lawrence Davies, the CEO of the Automotive Investment Organisation, UK Trade and Investment (UKTI), was in India to attend SIAT 2017 in Pune in January 2017. He spoke to Amit Panday on promoting British technologies, getting Indian Tier 1 and 2 suppliers to set up operations in the UK, and also enabling an increased level of industry-academia connect between the two countries.
How do you view SIAT as a global platform for automotive R&D stakeholders?
The reason why we are here again tells you about our impression of this event. SIAT 2015 was truly outstanding; we brought a number of companies across services to talk about trade and investment opportunities (in the UK). The event was so good that we had to come back for the 2017 edition. The SIAT event is now a regular feature on our calendar.
We have had several meetings at the show this year. ARAI got the companies of the highest calibre including AVL, Continental, Bosch, and Horiba MIRA to participate.
How do you plan to get Indian companies to invest in the UK?
We are an automotive investment organisation, a part of the Department of International Trade, which is a part of the UK government. We are here with our industry body, The Society of Motor Manufacturers and Traders Ltd (SMMT).
Our team was set up in the summer of 2013, predominantly to look at investments into the UK on the supply chain. So we are a slightly different team when compared to most government teams. Half of our team comes from the industry and the other half are government representatives.
Among the ones from the industry, we have senior officials who have worked at companies such as Porsche, Jaguar Land Rover, Ford and others. I come with a work experience of 35 years at General Motors. So we are all industry people who have joined the government (in this initiative). Our results over the last three years are extraordinary. We have seen investments of more than 1.5 billion pounds (Rs 14,764 crore) into the UK, creating over 20,000 jobs purely in the supply chain area. This is not the OEM job count.
Lawrence Davies with the Automotive Investment Organisation, UKTI team at the SIAT 2017 expo held in Pune.
We have now been given a challenge of bringing additional investments into the UK trade. That includes any company in the UK, whether owned by an Indian or a Chinese company, which is looking to export out. We are helping such companies.
At SIAT 2017 (UKTI Pavilion), we had major companies from the UK looking for trade opportunities. In this edition also, we had about the same number of companies from UK participating as in SIAT 2015. We are trying to bring the top-end companies from the UK.
For example Ricardo, which is known across the world for its engine development capabilities, also makes McLaren engines, which are very high end. This means they can bring a lot of technical abilities to the development programs here (in India). The intention is to bring a smaller number of companies but high end. The companies which had participated in the last edition of SIAT reported very good results from this platform, and they wanted to come back this year too.
A senior official from Horiba Mira recently told us that they are working to get a few Indian companies to their technology park in the UK. This is aligned with AIO’s motive. Other than OEMs, are you also looking to get Tier 1 and 2 suppliers to set up their R&D and other facilities in the UK?Yes. There are a number of great Indian companies that have invested in the UK. The most obvious is the Tata Motors-owned Jaguar Land Rover, which is one of the best examples. There’s Mahindra & Mahindra which has invested there, and Ashok Leyland which has a bus plant (Optare). On the castings side, there are companies like Amtek which has one plant in the UK and plans to open another one there. Or SMR (Samvardhana Motherson Reflectec) which manufactures mirrors and has two plants in the UK.
So we have a significant number of Indian companies that have invested in the UK and we see potential for more. (Royal Enfield is another Indian company that has a research centre in the UK, which is involved in the development of crucial projects including the twin-cylinder engines and new motorcycle platforms. The R&D centre played an important role in the design and development of the Himalayan’s chassis and 411cc engine. The model today is the company’s first adventure-tourer model.)
How would Brexit impact these and other UK-based companies in their business across the European Union?
In June 2016, the country made a decision that it wishes to exit the European Union. However, our prime minister has clearly said that we are open for business and never has it been more important for us to be talking about friends and neighbours across the world for investments and trade opportunities.
If you look at the UK, our automotive industry is quite extraordinary. The number of vehicles that we built last year is approximately 1.8 million units including cars, vans, buses, and the iconic black cabs. We also built 2.5 million engines. We are accelerating.
If you compare this with most countries in Europe, they are witnessing flat production or slight increases. Additionally, we are headed towards two million cars by 2020. Plus we have a corporation tax, which the current government has reconfirmed. It will go down to 17 percent from current 20 percent. If you compare that with the rest of Europe, and the majority of countries, that’s over 30 percent. So we have a great offer in the UK, we are accelerating the number of vehicles being built there, we have low corporation tax and we have the technology.
Since you and other team members hail from the auto industry, how are you using your network to bring additional investments to the UK and create new jobs?
We know all the OEMs. It’s part of our roles to open the doors for the companies that are investing in the UK and to talk to them. So we evaluate a company, talk about their investments, introduce them to the UK-based OEMs and then they take their business models forward.
The other part of our roles is showing them the opportunities in the UK. Some of that could be quite basic stuff such as if a company is willing to invest in the UK, we can always help them in understanding which area they would like to go to, introduce them to the local authorities, see if there’s any type of offer(s) that we can make to them regarding land or buildings.
The third part, which I think is also the most important part, is technology. The UK government is on a major drive to promote technology. Nine out of 11 Formula One companies have a base in the UK. We have a strong tech base. We are particularly concentrating on three primary areas – low carbon emissions, lightweighting and connected autonomous vehicles.
We are stealing the march over many of our competitors in the context of testing of connected vehicles in four different cities in the UK. Two major OEMs – Volvo and Nissan –have already announced, in the last few weeks, that they will test their vehicles in the UK.
So, we think we are ahead in the game at the moment and we want to continue doing that. And we do think that Indian companies can play an important part in the development of (advanced) technologies. We also have some funding opportunities, particularly in the R&D areas. So if a company wants to do R&D in the UK in the three above-mentioned areas, they can apply for funding. There is obviously a process that we go through but we can get up to 50 percent funding. The majority of work in this case obviously will have to take place in the UK.
Cardiff University has signed an MoU with India’s ACMA for joint technology programs. How do you see such an industry-academia association playing its part in bringing Indian suppliers to the R&D hotbed in the UK?
That’s a really good question. Firstly, if you take the top 10 universities in the whole world, four of them are based in the UK. So we have a majority of top universities in the world. What’s happening in the UK is that our universities are becoming specialists in the different fields. So when a company wants to do its R&D in a specific field, it can benefit by taking the help from the selected university. We are now finding that many companies are getting the benefit of doing work with selected universities.
What we do is that we bring the company together with the university, and sometimes they work on joint projects and apply for funding. We are finding that the university opportunities are a huge plus for the UK. The UK offers huge opportunities for overseas companies to improve their quality work and R&D activities.
What targets in terms of new job creation and bringing new investments to the UK are you looking at this year?
We have to create around 6,000 more jobs in the UK in the supply chain domain. This is for the year ending March 2017. I think the following year would be a similar number.
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