Mazda 2011 Annual Report Download - page 37

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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. In these markets, the Group is subject
to the following potential risks, which could affect the Mazda
Group’s business results and financial position:
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 its 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 its 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, or fire or
other accident, which could adversely affect the Mazda Group’s
business results and financial position.
Mazda Annual Report 201 1 35