Audi 2013 Annual Report Download - page 204

REPORT ON EXPECTED DEVELOPMENTS, RISKS AND OPPORTUNITIES
REPORT ON RISKS AND OPPORTUNITIES
MANAGEMENT REPORT
201
A
In addition, there are general operating risks in the form of
unforeseeable events giving rise to losses, such as explosions
or major fires. Such events could cause both considerable
damage to the Company’s assets and serious disruption to
production processes. In addition, production operations can
be disrupted by power supply failures or technical failures, in
particular of IT systems. Although these risks fundamentally
harbor considerable potential for losses, their probability is
viewed as low. To reduce such risks we have implemented
various preventive measures within the Company, such as fire
protection systems, emergency plans and company fire depart-
ments. Adequate insurance coverage has additionally been
taken out. The high flexibility of the worldwide Audi production
network, which makes it possible to move production capacity
to other locations, additionally reduces the risk.
The Audi Group uses its worldwide network of suppliers and
service providers in the development and production of its
vehicles. To assure consistent premium quality, we have put in
place a comprehensive quality assurance organization covering
the entire value chain.
In addition, the Audi Group protects its intellectual property by
choosing its system partners with care and by contractually
regulating and enforcing industrial property rights.
// OPPORTUNITIES FROM OPERATING ACTIVITIES
Within the automotive industry there is close collaboration in
particular between manufacturers and suppliers, related, for
example, to the research and development sphere and other
strategically significant stages of the value chain. Partnership-
based cooperation could yield growing economic advantages –
for instance in the form of more efficient and more effective
processes for the development of innovative technologies – and
promote a further transfer of expertise. The Audi Group is in a
position to profit particularly from synergies and cost savings
within the Volkswagen Group.
// LEGAL RISKS
Through its worldwide activities, the Audi Group is confronted
with a large number of country-specific legal systems and
norms. As well as complex technical frameworks, these include
especially fiscal and customs regulations, which must be met
and complied with. There is a risk of legal uncertainty stemming
from differing interpretations of legislative changes if such
requirements change very frequently and unexpectedly. This
could lead to fines, penalties and subsequent compensation
payments, or to restrictions on the approval of our products or
delays to their market introduction. We therefore back up our
decisions and actions with the expertise of Audi’s internal legal
advice, and also consult outside legal experts in selected cases.
We are continually adapting and improving our internal pro-
cesses accordingly and are incorporating supervisory functions.
All activities by the corporate bodies, managers and employees
of the Audi Group must comply with the current legal framework
and with internal corporate guidelines. Through the preventive
approach of the Audi Group’s compliance organization, we not
only actively counter potential misconduct, but also use a wide
range of internal communication and information measures to
raise awareness among our employees. Advisory programs on
how to handle compliance topics are offered extensively. In the
awareness that misconduct by individuals cannot be ruled out
altogether, our systematic, consistent approach permanently
increases our ability to act in accordance with the law.
// PERSONNEL RISKS
The enduring success of the Audi Group owes much to our highly
qualified specialists and managers, and their commitment on
the Company’s behalf. Audi is nevertheless exposed to a fun-
damental risk of a shortage of specialists as a result of demo-
graphic change and global value creation processes. Its human
resources work therefore focuses on targeted, demand-oriented
personnel development and workforce training. As an attractive
employer worldwide, the Audi Group also enjoys a strong posi-
tion amid intense competition for well-qualified employees. To
stem the loss of expertise through fluctuation, the Audi Group
maintains employee satisfaction by providing an extensive,
demand-based incentive system and employing intensive skills
management. In anticipation of the loss of retiring experts
and managers, the Company practices timely succession plan-
ning. In addition, our extensive training program supports our
activities to create resources of qualified young employees.