Audi 2011 Annual Report Download - page 184

181
Management Report
134 Audi Group
143 Business and underlying
situation
159 Financial performance
indicators
162 Social and ecological aspects
175 Risks, opportunities
and outlook
175 Risk report
183 Report on post-balance sheet
date events
183 Report on expected
developments
187 Disclaimer
As an innovative premium carmaker, the Audi Group is continually extending its range of products
and services. The Company also brings new technologies such as production methods, assistance
or safety systems and drive concepts to production maturity. Despite intensive preparations – in
the form of comprehensive market studies and conscientious planning and steering work – it is
not always possible to forecast accurately the market success of new vehicle projects, technologies
or services.
The development of new vehicles and technologies entails further risks. In addition to delays and
changes to the product at short notice, the loss of expertise to service providers outside the Group
can adversely affect the Audi Group’s business activities. The Company guards against this risk
by systematically granting and asserting industrial property rights as well as by consciously and
meticulously selecting dependable system partners.
Legal risks
All activities by the corporate bodies, management personnel and employees of the Audi Group
must comply with the current legal framework and with internal corporate guidelines. As a
flanking measure to Group-wide codes of conduct, regular training courses help to inform the
workforce of legal and internal requirements, and of any changes to these. This approach enables
the Company to ensure that its actions are always lawful.
Nevertheless, the growing complexity of legal and fiscal requirements creates corresponding
risks. As a result of the growing internationalization and expansion of the Audi Group’s business
activities, there is a risk of legal uncertainty due to differences of interpretation. Nor can the
possibility of deliberate misdemeanors by individual persons be excluded altogether. The pre-
ventive approach of the Audi Group’s compliance organization actively seeks to counter potential
misdemeanors mainly through training.
As a manufacturer of premium automobiles, the Audi Group aims to satisfy its customers’ high
quality expectations in every respect. Nevertheless, the possibility of product liability claims can-
not be excluded. Especially in the U.S market, these may lead to financial losses and significant
reputational harm that could undermine the Company’s long-term financial performance. The
Audi Group counteracts such risks by upholding high quality standards for its products and
addressing quality management systematically. In addition to taking appropriate precautions,
it takes out economically reasonable levels of insurance cover and creates provisions. The same
applies to lawsuits brought against the Company in the United States by commercial patent
exploiters. Defending them is a costly business, and defeat involves financial losses for the
Company.
The Audi Group is not currently involved in any legal or arbitration proceedings anywhere in the
world that could have a lasting influence on the economic position of the Group.
Personnel risks
For a manufacturer of technologically pioneering and high-quality premium cars, qualified special-
ists and managers and a high degree of commitment are a vital part of the Company’s success.
Its human resources work therefore focuses on targeted, demand-centered human resources
development and training for its employees. As an attractive employer, the Audi Group is well-
placed to assert itself amid intensive competition to recruit well-qualified employees. Offering
a broad in-house training program moreover helps it to selectively create resources of qualified
young employees.
The Audi Group actively guards against the potential loss of expertise through fluctuation by
ensuring high employee satisfaction, providing an extensive and demand-based incentive sys-
tem and applying intensive competence management. The Company responds to the loss of
retiring employees by systematically transferring knowledge to the successors of the experts
and managers who are retiring.