6 cylinders of our value creation engine

6 CYLINDERS OF OUR VALUECREATION ENGINE

As part of our strategy, we have prioritised six areas for the Tata Motors Group, which form the six cylinders of our value-creation engine. The six cylinders represent our key value drivers. Identifying these drivers will help us take focused actions on areas that will have the greatest impact on value.

Did you know?
Tata Motors was the first to introduce a unique indigenous Vehicle Tracking and Bay Scheduling (VTAB) system for customers to keep a track of the repair or maintenance work being performed on their vehicles while being ensconced in the customer lounge at a Tata Motors service centre!
Jaguar was the creator of the world’s first disc brake in 1953, an industry leader in aluminium lightweighting and closed-loop recycling.
Land Rover has 70 years of off-roading experience providing extensive know-how and patented technologies, such as Dynamic Stability Control and the industry-leading Terrain Response.

JLR and CJLR

A PLAN TO TURNAROUND AND TRANSFORM

JLR has created an outstanding, award-winning product portfolio, grown as a global player in the premium car segment and delivered a solid business and financial performance over the decade of Tata Group's ownership. JLR vehicles represents a compelling combination of British design and engineering integrity. Chery Jaguar Land Rover (CJLR) is a 50:50 JV formed between Chery Automobile Co Ltd. and JLR. CJLR manufactures world-class products, which include Range Rover Evoque, Discovery Sport, Jaguar XFL, Jaguar XEL and Jaguar E-Pace.

The foundation is strong with two iconic premium brands. Jaguar is one of the world’s premier luxury sports saloon and sports car marques. Land Rover is the world’s leading manufacturer of premium SUVs. Recent successful model launches, including award winning I-Pace, Hybrid Range Rover, Range Rover Sports and the new Range Rover Evoque, have broadened the product range to existing and new customers in established and emerging segments. The excitement continues with the iconic Defender to be launched later this year.

Jaguar Land Rover has delivered solid performance over the long term, through exciting products, strong profits and investing in its future. Between FY 2010-11 and FY 2018-19 JLR has:

• Increased revenues to GBP 24 BN (12% CAGR)
• Generated PBT of over GBP 13 BN (before exceptional items)
• Generated ~GBP 27 BN of operating cash flow before investment of ~GBP 25 BN in new products, technology, capacity and infrastructure

JLR has witnessed unprecedented challenges in the last fiscal, which includes weak market conditions in China, muted industry conditions in other markets, geopolitical uncertainty with rising populism, and tariff and trade tensions, along with high fixed cost structure: all of which severely impacted the financial performance.

Given the above challenges, JLR is gearing up for the next phase of its turnaround and transformation through: Project Charge and Project Accelerate.

PROJECT CHARGE

JLR has launched Project Charge in response to the unprecedented market, technological and regulatory challenges that are impacting its current financial performance. The objective of this programme is to identify and implement at speed, short-term gains to improve cost, cash, revenue and profitability.

Positively charged

Through decisive actions, JLR will reduce investment spending by GBP 1 BN, improve working capital by GBP 500 MN and make GBP 1 BN of profit growth and cost efficiencies, all by the end of FY 2019-20. Project Charge is on track to achieve its GBP 2.5 BN target, with GBP 1.25 BN of benefits already delivered during FY 2018-19.

These comprise the following:

• A GBP 700 MN reduction in investment (of GBP 3.8 BN versus the GBP 4.5 BN originally anticipated) following rigorous spend reviews to identify non-core and non-product investment savings without compromise to JLR's revenue-generating product plans;
• GBP 400 MN of working capital improvements, with inventory reduced by GBP 800 MN since September through actions including improved production and demand management enabled by advanced forecasting and analytics; and
• GBP 150 MN of savings in costs including labour overhead savings through a workforce reduction programme.

Paving the way to a sustainable, profitable future

Reducing the size of JLR's global workforce by 6,000 is expected to deliver over GBP 400 MN of ongoing cost efficiencies, starting from FY 2019-20, with further cost savings expected as Project Charge continues its review of costs, including commercial, purchasing and marketing activities. Project Charge will also maintain a focus on investment spend and working capital to identify, deliver and sustain the additional savings necessary to meet JLR's GBP 2.5 BN target.

The cost and cash improvements achieved by Project Charge enable vital ongoing investment into next generation ACES products and services to deliver experiences that people love, for life.

CHARGE ON TRACK

JLR has already taken significant steps towards reducing investment spending and identifying various cost reduction opportunities. Out of the target GBP 2.5 BN, GBP 1.25 BN benefits have already been delivered in FY 2018-19.

PROJECT ACCELERATE

The focus of Project Accelerate is medium to long term. The key focus areas of the project are to enhance sales performance, deliver competitive variable cost, reduce delays and improve quality. JLR launched Project Accelerate to simultaneously drive large-scale systemic and structural change with root-and-branch reviews of all of its processes and working practices. It has planned a set of actions for each of these focus areas.