Audi 2014 Annual Report Download - page 202

REPORT ON EXPECTED DEVELOPMENTS, RISKS AND OPPORTUNITIES
REPORT ON RISKS AND OPPORTUNITIES
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FINANCIAL OPPORTUNITIES
The economy in the United States and United Kingdom could
develop more dynamically than in the eurozone and thus lead
to the appreciation of those national currencies. The exchange
rate of the renminbi against the euro could be positively influ-
enced by the anticipated strength of the U.S. dollar and China’s
continuing steady economic growth.
A weakening of global economic growth could ease demand
for commodities. This could open up opportunities for the
Audi Group in the procurement market. The Audi Group’s
Treasury organization constantly monitors and actively
manages these areas of financial potential.
/ MOTORCYCLES SEGMENT
The Ducati Group has been integrated into our Group-wide risk
management organization since 2013. Various legacy risk
areas of the Ducati Group have been neutralized or reduced by
its inclusion in the Audi Group. However, this means that
additional, segment-specific risks and opportunities have
arisen for the Audi Group.
// RISKS FOR MOTORCYCLES SEGMENT
The Ducati Group is regarded worldwide as a successful manu-
facturer of premium motorcycles. Like the automotive industry,
the Ducati Group faces the challenge of operating in an increas-
ingly complex environment characterized, for example, by vola-
tile markets and changing customer requirements. Against this
backdrop, the Ducati Group has strategically refined its product
development process to promote innovation.
Ducati customers are very discerning about the quality and
design of motorcycles. The challenge for Ducati in this is to
meet the premium expectations of customers and system-
atically develop the brand image. Consequently, it is necessary
to keep quality and customer satisfaction ratings permanently
under scrutiny. The instruments of control are put to use not
just within the Ducati Group, but also for the steady expansion
and improvement of the dealer network. Ducati is also contin-
ually optimizing its processes in order to avoid image loss and
reduce warranty costs.
Ducati is expanding its international market presence. As a
result, it is coming up against a large number of country-
specific legal systems and norms. It needs to comply with and
meet complex technical frameworks as well as fiscal and cus-
toms regulations, and must therefore continually observe and
analyze them.
The most significant production plant for motorcycles of the
Ducati Group is in Bologna, Italy. This is also the site of the
main warehouse. Due to this dependence, the Ducati Group
needs the Bologna facility to remain constantly operational
and ready. A failure or operational restriction, for example as a
result of a fire, would have serious consequences for the ability
to deliver products. As well as the image loss, there would be
financial consequences in particular. There are appropriate fire
prevention measures and safety plans in place to avoid such a
situation. The safety precautions are regularly brought up to
date and adapted.
The Ducati Group competes with a large number of motorcycle
manufacturers. Especially in traditional markets, the bench-
mark for competing is demanding. To secure its planned mar-
ket shares, Ducati is enhancing the appeal of the brand and its
products, and strengthening its relationship with customers.
The outstanding expertise of the Ducati workforce is a vitally
important factor in meeting high customer expectations.
Specially qualified employees are needed particularly for the
development of innovative lightweight construction as well as
engines. Thanks to its attractiveness as an employer and its
strong brand image, Ducati is well positioned to compete for
the best specialists. In addition, the company actively uses
strategic human resources planning and other tools such as
international recruitment activities to manage long-term
development measures and loyalty tools in the human
resources area.
The volatility of financial and procurement markets presents
exchange rate and commodity price risks, which Ducati coun-
ters through the Group-wide hedging strategies available to it
within the Audi Group.
// OPPORTUNITIES FOR MOTORCYCLES SEGMENT
Society’s increasing focus on technical innovations and individ-
uality could open up new market opportunities in innovative
business areas for the motorcycle industry. Its unique market
position in the design and technology areas is an asset to
Ducati. In addition, the company could benefit from a broad-
ening of the segments driven by demographic developments in
its traditional sales markets. Furthermore, far-reaching quality
measures are promoting the creation of a stronger, more at-
tractive dealer network, opening up fresh opportunities for the
Ducati Group. The entry into new markets could unlock extra
growth potential too. The expertise and experience of the Audi
Group could help with the swift and efficient implementation
of internationalization measures. Under the umbrella of the
Audi Group, the Ducati brand now also enjoys greater scope in
its operating and purchasing processes, as well as business
partner networks.