Mazda 2007 Annual Report Download - page 58
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4. Laws and Regulations
The Mazda Group’s operations in each country where it does business are subject to various
government regulations such as those pertaining to environmental issues, automobile safety, fuel
consumption and exhaust emissions. Compliance with new regulations could result in substantial
additional costs, which could adversely affect Mazda Group’s business results and financial
position.
5. Market Competitiveness
The Mazda Group competes with a large number of companies in the global automobile mar-
ket. Maintaining and enhancing the Group’s ability to compete in this environment is crucial to
ensuring growth. Consequently, the Mazda Group is implementing a range of initiatives to boost
its competitiveness in product development, manufacturing, sales and other areas. However,
the Mazda Group’s business results and financial position could be affected in the event that it
fails to launch appealing products at opportune times, due to a failure to accurately ascertain
market trends or as a result of issues related to technological capabilities and manufacturing.
The same holds true if the Mazda Group fails to take effective steps to respond to customer
values or changes thereof, including declines in market share or product prices, through its
dealership network or sales methods.
6. Procurements of Materials and Parts
The Mazda Group relies on numerous suppliers outside the Group for the procurement of
materials and components. However, due to tight supply-demand balances, constraints at
suppliers, or changes to and breaches of supply contracts, the Mazda Group may face difficulties
in procuring the necessary level of materials and components for volume production, leading to
a rapid increase in the price of materials procured. Any failure to cover the cost of these increases
through internal efforts to boost productivity, pass on price rises to customers or other measures,
may lead to a deterioration in output or higher costs, which could adversely affect the Mazda
Group’s business results and financial position.
7. International Business Activities
In addition to Japan, the Mazda Group sells its products and carries out business activities in
markets around the world, including the United States and Europe, as well as developing and
emerging markets overseas. In these markets, the Group is subject to the following potential
risks, which could affect Mazda Group’s business results and financial position if manifested:
●Adverse political and economic developments
●Impediments arising from changes in laws and regulations
●Potential adverse impact from tax regulations
●Difficulties in attracting and securing personnel
●Undeveloped infrastructure
●Strikes and other labor disputes
●Terrorist incidents, war, disease and other factors leading to social disorder
8. Protection of Intellectual Property
In order to maintain competitiveness, the Mazda Group is working to accumulate and protect
technologies and expertise that help it to develop unique products. At the same time, the
Group is taking steps to prevent the infringement of third-party intellectual property rights.