Mazda 2009 Annual Report Download - page 49

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. Nonetheless, in the event of a disputed infringement of
third-party intellectual property rights by the Mazda Group, the Mazda Group may be subject to substantial
damages claims or be forced to halt the production and sale of products. This could also adversely affect the
Mazda Group’s business results and financial position.
The Mazda Group’s intellectual property is not subject to complete protection in certain regions. In the event
that third parties use the Group’s intellectual property on an unauthorized basis to produce similar products, the
Group may have to pay substantial expenses for litigation, or experience a decline in sales due to an inability to
offer unique products. This could adversely affect the Mazda Group’s business results and financial position.
9. Defective Products
While striving to improve the quality of its products to meet the requirements of the market, the Mazda Group
also does its utmost to ensure the safety of its products. However, the Group cannot guarantee that large-scale
product recalls or other issues will not occur due to product defects arising from unforeseen circumstances.
Such events may lead to significant costs or a loss of trust in the Group, which could adversely affect Mazda’s
business results and financial position.
10. Natural Disasters and Accidents
In addition to measures to protect its manufacturing sites and other important facilities against fire and
earthquakes, the Mazda Group has concluded natural disaster insurance contracts and taken other steps to
minimize the financial risk of such events. However, the ability of the Mazda Group to supply products may be
severely disrupted in the event of a major earthquake, typhoon or other natural disaster, fire and other
accidents, which could adversely affect the Mazda Group’s business results and financial position.
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Review of OperationsMessages from Management Mazda’s Environmental and
Safety Technology
Corporate Information Financial Section