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Notice
Board’s Report
Corporate Governance Report
Business Responsibility Report
Management Discussion & Analysis
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For example, the Company acquired the Jaguar Land Rover
business from Ford in June 2008, and since then Jaguar Land
Rover has become a significant part of its business, accounting for
approximately 79% of its total revenues in Fiscal 2017. As a result
of the acquisition, the Company is responsible for, among other
things, the obligations and liabilities associated with the legacy
business of Jaguar Land Rover. There can be no assurances that
any legacy issues at Jaguar Land Rover or any other acquisition the
Company has undertaken in the past or will undertake in the future
would not have a material adverse effect on its business, financial
condition and results of operations, as well as its reputation and
prospects.
The Company will continue to evaluate growth opportunities
through suitable mergers and acquisitions in the future. Growth
through mergers and acquisitions involves business risks, including
unforeseen contingent risks or latent business liabilities that may only
become apparent after the merger or acquisition is completed. The
key success factors are seamless integration, effective management
of the merged and/or acquired entity, retention of key personnel,
cash flow generation from synergies in engineering and sourcing,
joint sales and marketing efforts, and management of a larger
business. If any of these factors fails to materialize or if the Company
is unable to manage any of the associated risks successfully, the
business, financial condition and results of operations could be
materially and adversely affected.
The Company’s future success depends on its ability to
satisfy changing customer demands by offering innovative
products in a timely manner and maintaining such products’
competitiveness and quality.
The Company’s competitors may gain significant advantages if they
are able to offer products satisfying customer needs earlier than the
Company is able to, which could adversely impact the Company’s
sales, results of operations and financial condition. Unanticipated
delays or cost overruns in implementing new product launches,
expansion plans or capacity enhancements could also materially
and adversely impact the Company’s financial condition and results
of operations.
Climate change concerns and the promotion of new technologies,
such as autopilot, encourage customers to look beyond standard
factors (such as price, design, performance, brand image or comfort
and features) in favor of more fuel efficient, convenient and
environmentally friendly vehicles. As a result of the public discourse
on climate change and volatile fuel prices, the Company faces more
stringent government regulations, imposition of speed limits and
higher taxes on sports utility vehicles or premium automobiles. The
Company endeavours to take account these factors, and is focused
on researching, developing and producing new drive technologies,
such as hybrid engines and electric cars. The Company also
investing in development programs to reduce fuel consumption
through the use of lightweight materials, reducing parasitic losses
through the driveline and improving aerodynamics. Coupled with
consumer preferences, a failure to achieve the Company’s planned
objectives or delays in developing fuel efficient products could
materially affect the Company’s ability to sell premium passenger
cars and large or medium-sized all-terrain vehicles at current or
targeted volume levels, and could have a material adverse effect
on the Company’s general business activity, net assets, financial
position and results of operations. In addition, a deterioration in
the quality of the Company’s vehicles could force the Company
to incur substantial costs and damage its reputation. There is a
risk that competitors or joint ventures set up by competitors will
develop better solutions and will be able to manufacture the
resulting products more rapidly, in larger quantities, with a higher
quality and/or at a lower cost. It is possible that the Company
could then be compelled to make new investments in researching
and developing other technologies to maintain its existing market
share or to win back the market share lost to competitors. Finally,
the Company’s manufacturing operations and sales may be subject
to potential physical impacts of climate change, including changes
in weather patterns and an increased potential for extreme weather
events, which could affect the manufacture and distribution of the
Company’s products and the cost and availability of raw materials
and components.
Private and commercial users of transportation increasingly use
modes of transportation other than the automobile. The reasons
for this include the rising costs of automotive transport, increasing
traffic density in major cities and environmental awareness.
Furthermore, the increased use of car-sharing concepts and other
innovative mobility initiatives facilitates access to other methods of
transport, thereby reducing dependency on the private automobile.
Furthermore, non-traditional market participants may dependency
on the private automobile altogether. A shift in consumer
preferences away from private automobiles would have a material
adverse effect on the Company’s general business activity and on
sales, prospects, financial condition and results of operations.
To stimulate demand, competitors in the automotive industry have
offered customers and dealers price reductions on vehicles and
services, which has led to increased price pressures and sharpened