The future of Jaguar Land Rover, according to CEO Ralf Speth

“Our advantage is we’re agile. We are on track to over-deliver on the short-term part of our programme, called Charge, to cut costs and improve cash flow.” JLR’s second-quarter results showed the truth of this, with a predicted upturn in fortunes – revenue up 8% year on year and a £156 million pre-tax profit – following impressive recent sales improvements, especially in China.

Speth says: “The longer-term part of our plan, called Accelerate, aims to attack systemic issues like improving quality and time to market. That will take longer. We’ve asked our existing teams to meet and communicate better, and that’s also working. And a data analytics team of seasoned, experienced people I set up a couple of years ago has started paying off in a big way.

“We’ve implemented our toughest decisions first. Do it any other way and you lose momentum…”

Times have been tough, but it’s very telling that Speth (who turned 64 last month) continues firmly in the biggest job at JLR, unmolested by rumour mongers and financial denizens who have recently taken to giving other car industry leaders a hard time.

“The task now is to prepare for new things,” says Speth, “to simplify our engine and model ranges as much as possible, and also to prepare some very go-ahead projects we have in the drawer.”

“I’m so glad that during restructuring we haven’t had to reduce our investment much,” he says, reaching instinctively to the future. “I defend our big projects because they define segments and also earn salaries for our next generation. When this disturbance ends, we want to be ready.”

Speth doesn’t seem to care much about what the car market will be like in a decade’s time, except to say that diesel and petrol cars will be around “for a long time”. He reckons maintaining a high degree of manufacturing flexibility holds the key – and already sees this policy, steadily maintained at JLR for years, starting to bear fruit.

The centralisation of JLR engine manufacturing – production of modular triples, fours, sixes and EDUs (electric drive units) at the company’s Wolverhampton factory – is one huge move towards flexibility, allowing JLR to source conventional, hybrid, plug-in hybrid and full electric powertrains from one site. The same goes for an embryo battery assembly operation at nearby Ham’s Hall, where a run of 7500-cell batteries even larger than that of the Jaguar I-Pace (perhaps for the luxurious XJ saloon and its Land Rover sibling?) will be constructed by an automated process that involves 15,000 welding operations to be completed in just 11 minutes.

However, Speth reserves special pride for the forthcoming Battery Industrialisation Centre (BIC), which is under construction on a huge site near Coventry Airport. There, the capabilities and innovations from universities all over the UK can be brought together in realistic manufacturing conditions – and also tested for re-use and recycling. Speth has long recognised the need for at least one UK battery gigafactory. Success for the BIC could lead directly to this – highly desirable provided the new place embraces next-gen technology and is run on a financially competitive basis. “This could be sensational for the UK,” says Speth, “but there’s no point in setting up a battery factory just to have one. It has to deliver great products at a competitive price.”

The JLR chief may see his own company selling pure diesel and petrol vehicles for years to come, but his commitment to electrification and zero emissions – along with zero congestion and zero accidents – seems to be total. JLR’s factories are already carbon neutral. Speth is scathing about the fact that 1000 coal-fired power stations are currently under construction around the world – and critical of a German process that subsidises coal mining, sends the mined product to Poland for firing, then brings it back as clean fuel. “Does the environment know it’s clean?” he asks.

Whatever the future, says the CEO, JLR must grow to be stable and successful. He’s optimistic about the prospects: “Of course, it’s not manufactured volume that matters: it’s cash in the pocket. But economies of scale are vital. To be competitive, you need advanced technologies and they’re expensive. If you’re VW and can divide your costs by 10 million, that helps. If you’re JLR and the figure is 600,000, it’s tougher.” 

I press for the ideal JLR annual production figure, admittedly without much hope. Speth is famous for not revealing targets. But maybe because it’s nearly Christmas, he relents. “A million is not out of reach,” he murmurs. “We have plans to expand our model range and we have some great designs in the drawer. But we must accompany any expansion with the very best sales and marketing techniques. But I believe we have the substance. Look at our cars in the high street: they are authentic, honest and they all have their own character. I am proud of that.”