THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED PAGE 1

Agenda (2)

Welsh Government – Products and Services for Automotive Companies

Iain Willox, Head of Business Development, Advanced Materials and Manufacturing

11:25 11:45

Automotive Council Supply Chain Group Overview

Tim Williams, Chief Executive, Welsh Automotive Forum

11:45 12:05

ESTnet – an overview of the Electronic and Software Technologies Industry in Wales

Avril Lewis, Managing Director

12:05 12:20

Q&A (second session speakers) 12:20 12:35

Networking lunch 12:35 13:35

Sector Overview Advanced Materials & Manufacturing

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Manufacturing in Wales

• 136,000 employees

• Over 5,000 enterprises

• 10.1% of all workforce jobs in Wales

• 8.0% of all workforce jobs in UK

• 16.8% of GVA in Wales (2011)

• 10.5% of GVA in the UK (2011)

• Wales has the highest proportional manufacturing contribution to GVA of all UK

regions.

• AM&M - 2,480 enterprises, Employing 80,370, 6.4% of all employees in Wales,

Compared to 5.5% in G.B.*

• AM&M sector in Wales 20% more productive than UK counterpart as measured by

GVA per hour worked . *Based on selected 2007 Standard Industrial Classification (SIC) Codes

Advanced Materials & Manufacturing

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Capability (Employment in Wales)

10%

5%

2.5%

Automotive Sector

Aerospace Sector

5,000 10,000 15,000 20,000

21%

79%

5.4%

94.6%

17%

83%%

UK sales £ 56bn*

UK sales £ 24.2bn*

Welsh sales £ 5.bn

Welsh sales £ 3bn

Auto

*Source SMMT-UK Auto sector facts 2013

Aero

* Source Reach For The Skies- A Strategic Vision For UK Aerospace.2012

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Welsh Automotive Sector 150 automotive companies in Wales employing 16,500 people.

£3.2Bn collective turnover with £0.5Bn of payroll value.

2 major OEM engine plants producing in excess of 1 million engines annually.

Over 40 international component manufacturers.

There are also circa 150 companies involved in motorsport in Wales.

The sector is a key focus for the Enterprise Zones at Ebbw Vale and Deeside.

The Welsh Automotive Forum furthers the interest of Wales on many UK wide interest groups

Advanced Materials & Manufacturing

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Welsh Automotive Sector

There is a considerable amount of R&D activity at Welsh Universities on future powertrain and alternative fuel technologies.

Globally Wales is one of the leaders in alternative fuels and low carbon applications. Especially:

• Hybrid Systems

• Kinetic Energy Recovery

• Second Generation Biofuels

• Electric Vehicles

• Battery Components

• Advanced Powertrain applications

• Internal combustion engines

• Smart Grid development

Wales is committed to becoming a low carbon economy. So far nearly £40 million has been invested into a pan-Wales Low Carbon Research Institute (LCRI).

Cardiff University’s Institute of Energy is working on alternative fuels & technologies with Ricardo and Qinetiq.

Advanced Materials & Manufacturing

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Business Support

Capital

Projects must create and or safeguard jobs

Wales offers the highest level of financial support

available in the UK.

From €200,000 to up to 50% of eligible project

costs, Size & location dependan.t

Non mobile projects – Repayable Business

Finance at zero interest.

Mobile projects – Non Repayable Business

Finance.

Eligible costs can be capital or salary related.

(new jobs only)

Revenue up to £50,000 match funding for SME

revenue projects.

“Proactive support from the Welsh Govt., together with a willingness to assist with funding, provided a concrete demonstration of the govt’s. real commitment to our company.” Graham Hillier, Toyota

Advanced Materials & Manufacturing

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Business Support

Research & Development

support for technically innovate

products/processes with commercial

potential

Innovation vouchers - 50% up to £25,000

Technical & commercial

feasibility studies - 75% up to £15,000

Industrial research - 70% up to £100,000

Experimental development

- 45% up to £200,000

Exploitation - 50% up to £20,000

Access to academic expertise

Kautex Textron are working with the University of South Wales to re-design a windscreen washer system for automotive OEMs, while Williams Power Injector Systems is developing a fuel injector system with Swansea Metropolitan University and Treharne Engineering

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Business Support

Skills

Skills Growth Wales – assistance to growing

companies with related training plans – average

of £2,500 per employee

Workforce Development Programme – aligns

staff training to business objectives with

identified sources of funding.

Leadership & Management Development –

between 50% - 70% funding to enhance L&M

skills.

Young Recruits Programme - £3,900 employer

subsidy for apprentice employment.

“New skills have allowed us to move into new markets. We focus on low volume, high spec. production so the skill and knowledge of the workforce is key. We want to continue to grow the business and South Wales is a good place to do that.” Mark Langshaw, Continental Teves

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Business Support

Supply Chain

Identification of new and existing contestable business opportunities.

Automotive Council - £3bn p.a. new demand for U.K. sourced parts.

Rail rolling stock contracts offer opportunities in new sectors.

Trade

International Trade Development – free review and desk based research undertaken by a market specialist.

International Trade Opportunities – 75% funding towards in market research including potential customer contacts.

Overseas Business Development Visit scheme – 50% funding for new market/customer development visits.

Trade Mission support – 50% funding towards attending Welsh Govt. led trade mission.

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Business Support Achievements

Welsh automotive sector investment £223m

Welsh Government support £39m

New Jobs 524

Safeguarded Jobs 2019 Jan. 2012 – Jan 2014

Innovation Vouchers (AM&M) 84

Orders secured via trade support (AM&M) £24m

Sourcing opportunities £11m 2013/14

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Business Support

If you have not already done so, come and

discuss your business needs with us.

Further information is available at

http://business.wales.gov.uk/business-finance

Supply Chain Group - Overview

Tim Williams

ADVANCED PROPULSION CENTRE UK

Work Stream 5 : Improving innovation and premium product manufacture Interim Lead: Chris Owen, SMMT IF CEO

Andy Wareing – Nissan

Mark Adams – Toyota

John Setchell – JLR

Martin Walsh – JLR

Dean Beard – BMW

David Yuill – BIS

Charles Morgan

Tim Williams – WAF

Tony Wolger – Bentley

Gary Archer – Aston Martin

John Pendleton – HP Pelzer Group

Terry Sampson – JLR

Jon King – Tata Steel

“The UK is home to many premium and luxury niche brands. Unfortunately the UK supply chain has never been developed with a specific focus of supporting these luxury and premium brands to further strengthen our position as a leading nation in the production of premium & luxury branded vehicles.”

Objective Provide roadmaps and support resources to enable small low volume premium product manufacturers to grow into trusted suppliers. This stream of activity is focussed around craft skills, identified as - Leather wrapping, curing, tanning, stitching, wood craft skills, wood finishes, chroming & polishing.

Actions 1.Identify the target suppliers through

a) OEM nomination b) Tier-one nomination c) Other routes – i.e. MIA, MAS, NAA, WAF, d) Create a register of premium product manufacturers – Cross sector e) SMMT ACS

2.Develop a certification/Kite-mark industry standard relevant to small premium product manufacturers. i.e. Gives OEM/Tier-one supply confidence yet doesn’t overburden the small suppliers. Could be a single certification to meet multiple customer needs.

3.Develop & launch growth roadmap and identify supporting resources i.e. mentors, coaches, financial resources and other specialist resources to help companies navigate their roadmap to growth.

4.Market and promote these suppliers for export opportunity - “hand made in the UK”

Growth Support & Certification Owners: Martin Walsh/John Setchell JLR

Work Stream 5 : Improving innovation and premium product manufacture

2014 2015 - 2016 2017 -2018

SUPPLIER CLUSTERS & VALUE

NETWORKS

TIM WILLIAMS

DEVELOP OUTLINE PROCESS AND FRAMEWORK AGREEMENT FOR CLUSTERS

RUN PILOT CLUSTER

SUPPLIER CLUSTER APPROVAL

DEVELOP AND ROLL OUT CERTIFICATION STANDARD FOR SMALL PREMIUM MANUFACTURERS

OUTPUTS

RESULTS

SUPPLIER PROGRAMME DEVELOPED &

COMMUNICATED CLUSTER PILOT RUN

# CERTIFIED PREMIUM MANUFACTURERS ON

REGISTER AVAILABLE TO SUPPLY INTO AUTOMOTIVE

Objective

Provide structured frameworks to allow clusters of suppliers to collaborate to eliminate the “T1-n supply chain fracture” and meet the needs of OEMs.

• Positioning the UK as the global centre of low carbon propulsion development and production.

• The Advanced Propulsion Centre (APC) was formed from analysis by the Automotive Council as part of its work on Industrial Strategy, and is the centrepiece of the joint industry and government strategy for the automotive sector. This is an industry-led opportunity for the UK to become a world leader in advanced propulsion techniques.

• The APC will channel £1 billion into the UK automotive industry over the next decade. This investment is intended to put Britain ahead in the global race for the development of new low carbon propulsion technologies

ADVANCED PROPULSION CENTRE UK

• The 27 companies backing the Advanced Propulsion Centre are: Bentley, BMW Group, Bosch, BP, Castrol InnoVentures, Caterpillar, Ford, GKN plc, High Value Manufacturing Catapult, Intelligent Energy, JCB, JLR, Lotus, MAHLE Powertrain, McLaren, Millbrook Proving Ground, MIRA, Morgan, Nissan, Optare, Productiv, RDM Ltd, Ricardo, SMMT, Tata Motors, Transport Systems Catapult Ltd, and West Midlands Manufacturing Consortium Ltd.

ADVANCED PROPULSION CENTRE UK

Supply Chain Group - Overview

In Summary

ADVANCED PROPULSION CENTRE UK

Thank you for your attention

THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED SMMT, the ‘S’ symbol and the ‘Driving the motor industry’ brandline are trademarks of SMMT Ltd

Q&A Session

Iain Willox, Welsh Government Tim Williams, Welsh Automotive Forum Avril Lewis, ESTnet

ESTnet….

The Electronic and Software

Technology Industry in Wales

6th March 2014

EST - The Enabling Industry

As an industry of enabling

technologies, electronics and

software underpin innovation and

development across many different

markets.

Global production:

● Electronics industry 2010 – $ ~ 1.7 trillion (RER)

● Software industry 2010 - $ ~ 265.4 billion (Report Linker)

Electronics and Software The

Global Market

● At £28.2 billion the UK electronics

market is the 7th largest in the World.

(Civitas)

● The UK is the 13th largest producer of

electronics in the World and 3rd largest

in Europe, generating over £29bn in

2011, contributing £12bn to GVA

(Civitas)

● In terms of project numbers, software

and advanced engineering are the two

top-performing sectors for attracting

FDI into the UK. (UKTI)

Electronics and Software in the UK

● The UK software market is the

second largest in Europe and

generated annual sales of

more than £8 billion in 2011

(New Zeeland T&E)

● Software accounts for 12% of

all ICT investment made in in

the UK making it the fastest-

growing component of ICT

investment. (OECD)

Electronics and Software in the UK

● Estimate Turnover - £ ~ 7bn

● GVA - £2.2bn

● Employs - ~24,000 people

● ICT Sector in Wales has the highest

GVA per employee - £92,000(Welsh Gov)

● Key strengths in:

•Financial software

•Systems integration

•Business application software

•Opto-electronics

•Printed and plastic electronics

•CEM

Wales and the EST Industry

We represent over 560 companies

who:

design, develop, manufacture or

integrate electronics and software

technologies.

This includes :

• 238 - Electronics Companies

• 322 - Software Companies

The ESTnet Footprint

Markets

Electronics

The Electronics industry in

Wales:

• Photonics

• Sensors

• Power Electronics

• Printed Electronics

• Contract manufacturing

• Systems integrators

• Semiconductors

Photonics

● Global market - £ 250bn (TSB)

● Growth by 2017 - £400bn (TSB)

● The Opto-electronics cluster in St.

Asaph, N. Wales has attracted world

leading companies, research and

education institutions to Wales.

Photonics in the Automotive

Industry

“AUTO INDUSTRY IS SET TO REAP COST AND PERFORMANCE

BENEFITS FROM PHOTONICS”

• LED headlamps,

• Night-vision safety systems,

• Emerging laser-ignition systems

Laser Focus World

Company Spotlight - Photonics

Qioptiq are multinational giant of the photonics industry, with

over 2,500 employees worldwide.

They have a hi-tech facility based in St. Asaph that offers a complete

in-house capability to design, analyse, manufacture, test and qualify

high performance electro-optical modules.

Sensor Systems

● Global market 2013 - £ 69bn (TSB)

● UK businesses have a 7% global

market share of the sensor and

sensor systems market. (TSB)

● Intelligent sensing systems are a

fundamental enabler across many

industrial sectors, including transport,

defence, energy, health and

renewables.

Sensors in the Automotive

Industry

“The future is bright for the automotive industry – and it is especially

bright for automotive sensors and electronics”

• Temperature, Pressure, Speed, Level/Position

• Power Train,

• Body Electronics,

• Vehicle Security,

• Safety and Controls,

• Alternative Fuel Vehicles

• Telematics.

The total automotive sensor market is expected to reach $33.59

billion by 2022

Company Spotlight – Sensor

Systems

Ellison Sensors International is a market leader in the area of

pressure management , exporting 75% of sales to more than 30

countries.

Through two subsiduary companies ESI have been manufacturing

strain gauges and strain based sensors for more than 50 years and

have more recently moved into the manufacturing of digital radio

telemetry systems for the process industrial and sensor markets.

Power Electronics

● Global market - £ 135bn (TSB)

● Growth Rate – 10% per annum (BIS)

● Power Electronics plays a critical

role in almost all aspects of our

daily lives and has potential

commercial potential in many of the

sectors here in Wales including.

renewable energy and

transportation

Power Electronics

Electronics Motion Systems was originally based in Germany

however moved to Swansea in 2009 and now employs around

150 people in high skill jobs.

With its head quarters in Swansea and a site in Halifax (Canada),

Electronics Motion Systems is a leading supplier of custom Control

Modules and Systems for power conversion and electric motor drive

markets.

Power Electronics

The Power Management Leader

Advanced Manufacturer of Power Semiconductors 4000+ employees

worldwide, 500+ people directly employed at IR Newport: engineers,

skilled operatives and administrative staff. Diverse workforce. 30

years Continuous Manufacturing at 22 acre site. 200mm wafers at

0.18um geometry.

Printed/Plastic Electronics

● Global market - £ 750million (TSB)

● Global Market 2016 – £3bn (TSB)

● It is still an emerging market and there is an opportunity to establish a

whole value chain in the UK. (TSB)

● The Welsh Centre for Printing and Coating in Swansea is one of the

world’s leading centres for research and development of printing and

coating processes.

Printed Electronics in the

Automotive Industry

“The crucial advantage of printable electronics for the automotive

industry is that the technology enables:

• outstanding quality displays,

• lighting

• capacitive touch sensors to be embedded into the curved surfaces

of the car. for the automotive industry is that the technology enables

outstanding quality displays, lighting and capacitive touch sensors to be

embedded into the curved surfaces of the car.

Printed/plastic Electronics

Warwick Audio is a UK based company specialising in the

development of Flat Flexible Loudspeaker, FFL technology for

Original Equipment Manufacturers

The primary features of our technology – thinness, lightness,

directionality, flexibility and low power consumption – make it

appropriate for numerous applications, such as conferencing,

education, public transport, IT, multimedia, automotive, public address,

advertising, security, military, personal audio and many others.

Electronic Systems

● Electronics systems encompasses a

broad range of applications based

around the parallel development of

electronics and software.

● Embedded systems alone is estimate

to be worth in excess of £62bn

worldwide (TSB)

● Wales has an especially strong base

in contract electronics manufacturing

and systems integrators.

Electronic Sub sectors

Contract Electronics

Manufacturing

● Wales has an especially strong base in

contract electronics manufacturing

● There are approximately 30

organisations providing this service.

● With a cluster based around the South

East Wales area, within easy reach of

the M4 corridor and Midlands.

Company Spotlight – Contract

Electronics Manufacturing

Axiom Manufacturing Services Ltd is recognised as one of

the fastest growing Contract Electronic Manufacturers within

the UK

Supported by more than 25 years of history in manufacturing

printed circuit board electronics and electromechanical assemblies

for the medical, defence, aerospace, industrial and transport

markets.

Software

The Software Industry in

Wales

• Advanced modern

software engineering

• Big Data

• Predictive Analytics

• Mobile

• Cloud Systems

• User experience

Big Data

● Every day, we create 2.5

quintillion bytes of data — so

much that 90% of the data in the

world today has been created in

the last two years alone. Because

of this the commercial application

for storage and analysis of this

data is vast.

● Examples of the ‘big data deluge’

can be seen across all sectors

including: smart metering,

transport and social media.

Company Spotlight – We Predict

Formed in 2009 We Predict has grown rapidly, working with

global blue chip customers supported through its worldwide

partner channel.

Through analysis of big data We Predict are able to create

bespoke systems to generate predictive analytics for customers

across a broad range of industries, including the financial sector,

the automotive industry and electronics manufacturing industry.

Simpler User Experiences

● Global value 2016 - £2bn (TSB)

● New types of devices are allowing

people to interact with machines in

new ways, shifting from traditional

desktop and notebook experiences to

more immersive, intuitive and

productive experiences.

● Recognising developments in this

area the University of Glamorgan, in

South Wales has launched the Centre

of Excellence in Mobile Applications

and Services

Company Spotlight

Formed in April 2001 Trackyou have grown to become a major

provider of asset and vehicle tracking services within the UK tracking

thousands of vehicles every day of the year. Their robust hardware

and simple to use interface provides a solid base on which to build.

Working in partnership with the likes of Orange Vodafone Microsoft

and Garmin they provide cutting edge technology at sensible prices

for the public and private sector.

Advanced, Modern Software

Engineering

● Market Value - £25bn (TSB)

● Market Value 2020 - £150bn (TSB)

● Welsh software developers are at

the forefront of new technological

changes, creating better software

that takes advantage of hardware

developments such as multi-core

systems which will mean lower

running costs and better efficiency

for companies operating in multiple

markets.

The ESTnet is a network of technology organisations.

• Our members design, develop, manufacture or integrate

electronic and software technologies,

• our associate members operate within the industry’s supply

chains,

• our affiliate members provide the industry with professional

services.

• our academic members provide the industry with good quality

graduates and opportunities to collaborate on research/ innovation

What is the ESTnet?

Why was the ESTnet created?

To provide a collaborative environment in which

people and organisations can:

• Create strong business relationships

• Exchange knowledge

• Share ideas

Assisting businesses to do business

and

Be the voice of the Industry for the Industry

ESTnet Strategic Pillars

Creating an

Environment

for Innovation

& Growth

Inspire, Nurture

& Connect

the Talent Pool

To Create &

Foster

Opportunities

for Innovation

& Knowledge

Sharing

Interact with key

decision makers

& influencers

To provide

Strategic

insight

into our industry

Creating Business

Opportunities:

• September 2nd Members Exhibition and

Autumn Business meeting and Launch of

ESTnet Awards 2014

• November – Advanced Engineering Show

• November – GB Rally Technology

Conference and Showcase

• “Debugging Software Contracts” Capital Law

• “Patents, Patenting and Patent Box” Deloitte and EIP

• “Accessing Finance and Grants” Broomfield and Alexander

Developing the Talent Pool:

• Skills Surveys undertaken in 2010 and 2013

• 13/14 plan includes:

“Undergraduate Year In Industry”

Shared Apprenticeship Programme

• Vacancies service on website

● The Knowledge Vault is a

searchable database

which provides you with

potential customers and

suppliers who are looking

to do business in Wales

● You can register at

http://www.estnet.uk.net/knowl

edge-vault/

Knowledge Vault

Welsh Technology Industry

Report

Economic outlook – Business confidence is high and growing

o 93% expect revenue increase

o 94% expect to recruit

o 89% expect to invest

THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED SMMT, the ‘S’ symbol and the ‘Driving the motor industry’ brandline are trademarks of SMMT Ltd

Q&A Session

Iain Willox, Welsh Government

Tim Williams, Welsh Automotive Forum

Avril Lewis, ESTnet