Risks and opportunities

In this section, we outline the main risks and opportunities arising in our business activities. In order to provide a better overview, we have grouped the risks and opportunities into categories as presented in the chart above and detailed further below. At the beginning of each risk category, we state the most significant risks in order of their importance as identified using the risk score from the QRP. We then describe the individual risks in no particular order. These individual risks, which are listed over and above the QRP, are generally inherent in nature and do not reach the materiality thresholds previously described. Unless explicitly mentioned, there were no material changes to the specific risks and opportunities compared with the previous year though the weighting of individual risks has changed.

Going forward, we aim to use a uniform risk formulation for the individual risks of the Report on Risks and Opportunities and the risk factors in our securities prospectuses; as such, we have harmonized the formulations in the reporting year. This approach reduces complexity and increases the comparability of both reporting formats.

The assessment of the Volkswagen Group’s risk categories and the reports to the Board of Management include, among other things, all risks with a risk score of 20 or more reported to Group Risk Management by the units included in the QRP. The risk categories are plotted on the graph based on the average scores. There were no risks reported for the “Risks from mergers & acquisitions and/or other strategic partnerships/investments” risk category with these scores.

We use analyses of the competition and the competitive environment in addition to market studies to identify not only risks but also opportunities that have a positive impact on the design of our products, the efficiency with which they are produced, their success in the market and our cost structure. Where they can be assessed, risks and opportunities that we expect to occur are already reflected in our medium-term planning and our forecast. Below, we therefore report on internal and external developments as risks and opportunities that, based on existing information, may result in a negative or positive deviation from our forecast or targets.

AVERAGE SCORES OF THE RISK CATEGORIES