The appointment of Jaguar Land Rover CEO Ralf Speth to the board of Tata Sons has highlighted not only the prominence of the premium car maker to the group overall, but also the high regard with which Speth’s own leadership is viewed by the Tatas.
The Bavaria-born German, aged 61, joined the group in early 2010, having worked in both the auto sector — BMW and Ford — and the German industrial gases and engineering company Linde. His entry came at a crucial juncture for the company, which rode out the 2007 financial crisis by the skin of its teeth, and was ripe for being put on a growth trajectory. It’s a turnaround strategy that has proved tremendously successful — despite bumps in the road, JLR now constitutes the bulk of Tata Motor’s revenue stream and continues to see a steady rise in sales. In its last annual results in May, it broke through the half-a-million vehicles a year barrier, with sales up 13 per cent, year on year.
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“He’s seen as having done a very good job,” said David Bailey, professor of industry at Aston University.
“He’s very focused and tough about delivering on the strategic goals of the company.” Part of Speth’s success has been combining a relatively ambitious growth plan (some analysts believe JLR could hit a million cars by 2020) with an eye to costs, said Bailey, pointing to the “Leap 4.5” initiative launched last year to increase efficiency at plants, cut procurement costs, and use shared platforms. “Car companies usually go wrong when they attempt a fast pace of expansion. Costs spiral.”
Also, the key to his success has been his flexibility, said Peter Cooke, emeritus professor of automotive management at Buckingham University, pointing to Speth’s approach as regards China, which has been to focus and focus elsewhere as the need arose. “It’s the most peculiar market and the Chinese clamp down on corruption could have completely destroyed the market for imported cars, but they managed to ride that out. He understood the culture, switched focus to Europe and as it re-emerged brought it back. He has a good sense of timing which is extremely important.”
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“JLR is not a huge company so the vision of the CEO is very important,” said Dinesh Rathore, director at Emerging Markets Automotive Advisors, pointing to the launch of the Range Rover Evoque in 2011. “When they came out with it, it was something that no one was expecting - to launch such a project requires a lot of conviction and that comes from the top.” “He’s got a good team around him, he leads from the front and from what I have been told, he listens to people,” said Cooke. “Yes, he makes the final decision, but he listens.”