Mazda 2008 Annual Report Download - page 62

Download and view the complete annual report

Please find page 62 of the 2008 Mazda annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 90

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90

3. Alliances and Mergers
The Mazda Group is involved in joint activities with other companies under technology alliances, joint ventures
and in other forms with respect to the development, production and sales of products. These joint activities are
designed to optimize resources, facilitate their prioritization and generate synergies. However, a disagreement
over management, financial or other matters between the parties involved could mean that the joint activities fail
to deliver the results expected. This could adversely affect the Mazda Group’s business results and financial
position.
4. Laws and Regulations
The Mazda Group’s operations in each country where it does business are subject to various government regu-
lations 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 market. 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 manufac-
turing. 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 compo-
nents. 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 com-
ponents 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:

                      