Audi 2013 Annual Report Download - page 79

Mr. Strotbek, how much of a risk do you take ?
STROTBEK : Our strategy is to establish a business resting
on three pillars – Europe, Asia and America. We are already the
premium-segment market leader in Europe and are also very
successful in Asia. The next step is to exploit our strengths and
build on our good position in North and South America. The
new plant in Mexico will be an important milestone for us. Today,
Mexico oers considerable expertise in automotive production
coupled with competitive cost structures. Setting up a base there
will also enable us to reduce our exchange rate risks and capi-
talize on existing free-trade agreements with the United States,
Latin America and Europe. Audi’s appeal as an employer in
Mexico too is reflected in the fact that we have already received
over 30,000 job applications for the plant.
Prof. Brunnermeier, you are regarded as an expert when it
comes to forecasting. Forecasting is a very important part of
decision-making amid uncertainty. How do you go about it ?
BRUNNERMEIER : The important thing is to give not just a
simple forecast, but a whole spread of possible events. You
can say that one scenario is the most likely, but that others are
also possible. Predicting many events, but also remaining
flexible enough to accommodate unforeseeable ones, is key
to minimizing risks. Nothing is worse than being unable to
respond to a future, unknown event.
Key word : speculative bubbles. Some people are increasingly
warning that the next major slump in the stock markets could
be just around the corner. There is the view that many of the
good business figures we are now seeing are underpinned not
by corporate success, but by the low-interest environment.
Are we heading for another crash, the next major crisis ?
BRUNNERMEIER : I am more optimistic as far as America is
concerned. As a general principle, you have to remember that
when interest rates are low, people are less inclined to leave
their money sitting in a savings account. Shares are more attrac-
tive. That’s normal, and not necessarily a speculative bubble.