Procurement risk

The global rise in automotive industry unit sales is also reflected in an increased need among suppliers for investment financing and working capital. In the eurozone, however, the euro crisis is impeding provision of the necessary financing. This may lead to declines in individual market segments and an adverse effect on suppliers’ financial position. In the second half of 2012, investors became more reluctant to invest in the automotive supply sector due to the drop in demand in Europe and the difficult situation facing competitors. Our procurement risk management system is well prepared for this situation. We continuously monitor changes at the suppliers’ end and, if there are any negative developments, use a suite of different measures intended to help reduce risks and ensure supplies. This enables us both to largely avoid supply risks due to supplier defaults and minimize the financial effects of crises up to and including insolvencies in the supply chain.