Porsche 2009 Annual Report Download - page 106

management continuously monitors suppliers’ eco-
nomic stability. If there is evidence of negative devel-
opments, appropriate measures are taken to ensure
supplies and reduce additional risks. To date, ongoing
risk classification and risk monitoring has enabled the
Volkswagen group to avoid supply risks due to sup-
plier defaults.
Production risk relating to demand
The turbulence on the world passenger vehi-
cle markets resulting from the global economic
slump led to substantial fluctuations in the number of
units of individual models produced at the Volks-
wagen group’s production facilities. Forecast installa-
tion rates for features or components are increas-
ingly uncertain due to the unstable sales markets.
The Volkswagen group mitigates this risk as the
situation demands using the extensive flexibility
measures available under its existing working time
models. Together with its intelligent turntable con-
cept and highly flexible suppliers, the Volkswagen
group is confident that it will be able to optimally
adapt the program at its vehicle and component
plants to volatile market conditions. The Volkswagen
group uses appropriate insurance contracts to hedge
economic risks that may result from interruptions to
production. Volkswagen ensures a high level of facil-
ity availability and stable output through regular pre-
ventive maintenance measures.
Risks arising from changes in demand
Consumer demand depends not only on real
factors such as disposable income, but also to a sig-
nificant extent on psychological factors that are im-
possible to plan for. For example, rising fuel and en-
ergy costs – combined with uncertainty over the fu-
ture taxation of CO2 emissions – could lead to unex-
pected buyer reluctance, which could be further ex-
acerbated by media reports. The financial and eco-
nomic crisis is having significant negative effects on
global economic development and hence on the en-
tire automotive sector. Many automotive markets
have entered a downward spiral, which in some
cases has assumed dramatic proportions, while oth-
ers could only be supported through government in-
tervention. Once the support programs launched by
many governments run out there is a danger – par-
ticularly in saturated markets such as North America
and western Europe – that owners will hold on to
their vehicles for longer and that demand will drop as
a result. The Volkswagen group is combating this
buyer reluctance with its attractive range of models
and in-depth customer orientation.
What is more, a CO2-based vehicle tax, which
has already been formulated in several European
countries, and high oil and energy prices could lead
to a shift in demand towards smaller segments and
engines, and hence impact the group’s financial re-
sult. The Volkswagen group is countering this risk by
developing fuel-efficient vehicles and alternative fuels
as part of its fuel and drive train strategy.
In the rapidly expanding markets of Asia and
eastern Europe, risks may also arise due to govern-
ment intervention in the form of restrictive lending or
tax increases, which could adversely affect private
consumption.
106 Group management report