Localization is key for Jaguar Land Rover to succeed in China, its biggest single market, says chief executive

The United Kingdom's iconic motoring brand Jaguar Land Rover is increasing sales in China, while constantly working to localize its operations, according to Ralf Speth, the company's CEO.

This will be Jaguar Land Rover's self-proclaimed Year of the Cat with the unveiling of the first China-built Jaguar car, and the first aluminum body shop in China, he says.

Ralf Speth, CEO of Jaguar Land Rover, with a Jaguar XE automobile at a recent auto expo. Balint Porneczi / Getty Images

Speth says he thinks localization is the key for the company's success in China. Its Range Rover Evoque, made in China, is already on sale, soon to be followed by the Land Rover Discovery Sport, unveiled at the recent Chengdu auto expo.

"We were delighted to announce that the first test bodies have started moving along our production line in Changshu, Jiangsu province. We have also made innovations in our steel body shop, where we have 306 specialist robots," Speth says. "We are leading the way with new technologies that will be at the heart of automotive companies in the future."

In 2003, when Jaguar Land Rover first entered the Chinese market, it sold just 431 cars. Last year, it sold 115,969 units.

That made China the company's single largest market, followed by the UK, Europe and the United States. Over the same period, the company sold 462,209 vehicles worldwide.

Jaguar and Land Rover vehicles are sold in 170 countries via a network of 19 national sales companies, and 2,640 franchise dealers.

Land Rover and Jaguar, two British brands dating back to 1948 and 1922 respectively, were brought together in 2008 when Tata Motors Ltd of India bought the two struggling brands from Ford Motor Co, which was facing financial problems in its US home market.

The Tata ownership has since given Jaguar Land Rover an international vision and direction, which also led to the establishment of a wholly owned foreign enterprise in China in 2010.

The company now employs 3,000 at its Changshu plant, together with 570 already working in its sales team in Shanghai.

"The heart of our business is our people. It is the marriage of the technological skills and industry of our Chinese workforce with our British ingenuity and innovation that will enable our business to flourish," Speth says.

Recently, Speth spoke to China Daily about his vision and strategy and new opportunities for Jaguar Land Rover's China operations. Following are edited excerpts of the interview:

What do you think of your company's prospects in China in the context of the current economic situation?

The global economy may still be fragile, but China is built on strong foundations and, by Western standards, continues to thrive.

Yes, China is adapting to a slower rate of growth, but such a rise - 6.9 percent in the third quarter - is still incredible testament to the entrepreneurial spirit of the Chinese people.

Jaguar Land Rover may be a young business in China, but we have a great British heritage and it is an honor to trade with such a vibrant and exciting marketplace, where 24 million vehicles are sold each year. I understand that only 10 percent of Chinese adults currently drive - it will be a privilege to introduce our iconic brands to a whole new generation.

In your opinion, what is the secret of your business' success in China?

Quality is paramount in any successful business, and we have exacting standards in everything we do - a small example is our pressing machinery in Changshu. Everything has been built and designed bespoke for the plant to quality standards surpassing those anywhere in the world.

It is through strong, mutually beneficial partnerships that we have deepened our bonds with China, always with a greater focus on the customer. This principle guides us on how our employees work with each other as well as how we as a business work with our suppliers, our dealer partners and our joint venture partner, Chery Automobile Co Ltd.

Our investment in people supports this cycle of improvement. We invest more than 3 percent of the employee payroll in training and development. We have invested more than 1 million yuan ($153,400; 141,900 euros) in our Education Assistant Policy, an initiative designed to encourage continuing education among Chinese employees.

What leadership qualities do you consider essential when leading your company in the Chinese market?

People are the key - the people who build our cars and the people who drive them. Jaguar Land Rover is committed to China for the long term, so we focus on forging strong relationships built on trust.

What do you consider important when working with local partners in China?

It is vital that we share the same vision and values as our partners. That means our leadership must understand the spirit and direction of Chinese customers, businesses and society, rather than thinking only about our vehicles.

It has been three years since we created our joint venture with Chery Automobile, Chery Jaguar Land Rover. Our decision to manufacture the Range Rover Evoque and Discovery Sport in Changshu is a result of our commitment to this partnership, to bring locally built vehicles to our Chinese customers.

What has been your company's biggest achievement in the China market?

October marked the first anniversary of a defining achievement: Opening our inaugural overseas manufacturing facility in China. The event took place in October 2014 but was the result of much careful planning and hard work over the five years since we first established a presence in China.

However, for me personally, our biggest achievement has come through the work of our China Children & Youth Dream Fund.

In partnership with the China Youth Development Foundation, we have worked with local communities to launch two Hope Schools in earthquake-affected Ya'an and Zhaotong.

How do you motivate your international team?

We are passionate about our business as we seize opportunities to build something exceptional in China. I was in complete agreement with Prime Minister David Cameron when he said during the recent state visit of President Xi Jinping: "I am clear that the UK is China's best partner in the West - and that this is in both our national interests."

In a practical way, our team is playing their part in the Belt and Road Initiative, reinvigorating the trading traditions that have linked Europe to China for more than 1,000 years. There are few moments like this in one's career where you genuinely get to build something from the ground up.

What do you think about the Chinese Dream? What dreams do you have for your company in China?

The Chinese Dream is a powerful idea that at its heart is about working together to make a better life for everyone, to spread prosperity and strengthen society.

We will support the dream in the best way we know - by taking a long-term view and commitment to China. Our plan is for sustainable, long-term growth hand in hand with China and the communities in which we operate.

I am also impressed by the Made in China 2025 initiative. This adopts the Industry 4.0 model of smart, efficient and fully networked manufacturing driven by sophisticated technologies, shared between manufacturers, suppliers, business partners and customers.

cecily.liu@mail.chinadaily.com

( China Daily European Weekly 01/08/2016 page31)