Audi 2015 Annual Report Download - page 195

REPORT ON EXPECTED DEVELOPMENTS, RISKS AND OPPORTUNITIES
REPORT ON RISKS AND OPPORTUNITIES
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// ECONOMIC OPPORTUNITIES
By updating and expanding our product portfolio, further
market potential can arise in both established and rapidly
growing markets. To realize these opportunities, we are steadily
increasing our market presence especially in the growth markets.
The continuing internationalization of our production network
is boosting worldwide awareness of our brand and giving us the
flexibility to meet specific customer requirements. Economic
developments and customer requirements are also continually
monitored worldwide in order to seize opportunities afforded
by innovative solutions and new technologies at an early stage.
// INDUSTRY RISKS
Meeting sustainability requirements is a major driver of the
political and social agenda. Resulting laws, regulations and
shifts in social values influence our industry. A prolonged fail-
ure to address market-determining sustainability and respon-
sibility aspects in products and processes would therefore lead
to significant competitive disadvantages and image losses, and
as such represents a risk.
The diesel issue means sustainability risks have come even
more sharply into focus compared with the previous year.
The objectives agreed with the Board of Management are an-
chored in the overall strategy and are managed both brand-
wide and Group-wide through central functions, committees
and work groups. In addition, target attainment is monitored
in terms of economic, ecological and social responsibility.
Furthermore, in the Corporate Responsibility Report, we render
our sustainability goals and activities transparent for our
stakeholders. The findings from sustainability assessments
and stakeholder dialogues for gauging current and future
expectations are integrated into our sustainability strategy. At
its own request, in fall 2015 Audi suspended its membership
in the United Nations “Global Compact” in the wake of the
diesel issue. Audi will reactivate its membership once the
diesel issue has been resolved.
Statutory CO limits in particular have a direct impact for the
Audi Group on the development, manufacturing and sale of
vehicles. Above all, we are pressing ahead with reducing fuel
consumption and vehicle emissions in order to honor our respon-
sibility to meet CO requirements. We also take the expecta-
tions of our stakeholders into account. We manage change in
the field of drive technology through our product and power-
train strategy. For conventional combustion engines, we back
efficient, progressive vehicle concepts and use various tech-
nologies from the modular efficiency platform. The risk of non-
fulfillment of CO2 fleet targets has been reduced compared
with the previous year thanks to our more widespread electrifi-
cation strategy.
A shift in the mix of gasoline and diesel engines as a result of
the diesel issue could however cause us to fall short of CO2
targets. In addition, development costs could increase due to
the need to meet technical requirements resulting from tough-
er external regulations. The Audi Group continues to regard
diesel technology as an important component in achieving the
CO2 targets and backs innovative engine technologies as a
means of ensuring high levels of customer acceptance.
We are also giving high priority to the advanced development
of alternative drive systems based on electric, hybrid, fuel cell
and CNG technologies, and will be bringing several such mod-
els onto the market over the coming years. As well as the
Audi A3 e-tron already successfully introduced into the mar-
kets, we expect the Audi Q7 e-tron in particular to provide a
positive impetus. We will offer our customers further models
with hybrid and electric technology by the start of 2019. We
intend to make sure we achieve our objectives by defining and
pursuing CO2 targets for our vehicle fleet and regularly updat-
ing electrification roadmaps.
Furthermore, the development of the industry worldwide is
characterized by a latent risk from intense competition that
manifests itself through price positioning or the increased use
of sales incentives. This could also lead to a financial risk to the
development of residual values in the used car business. Our
brand strength and attractive product range, along with our
active monitoring and management of the market, counter
this risk.
// INDUSTRY OPPORTUNITIES
We are translating the megatrends of digitalization and con-
nectivity into viable business models. Audi connect already
provides us with an established platform that we are steadily
building on. As the interface between customer, dealer, vehicle
and environment, we are constantly adjusting our products
and services in line with customer requirements. The innova-
tive assistance systems already optionally available in our
vehicles are being steadily refined in order to realize further
market potential. In the medium term, we intend for our piloted
driving systems to be instrumental in further improving not
just traffic safety, but also energy efficiency and convenience.
The participation in HERE, a provider of cloud-based real-time
maps and mobility services, provides new opportunities for
advancing assistance systems and mobility services. Further-
more, we have identified potential in the area of mobility and
fleet services. In implementing these innovative topics in the
technology and service domains, for example under the banner
of Audi mobility, we want to continue to meet the sustainabil-
ity, efficiency and connectivity expectations of our customers
worldwide.