Question: Read the article below and answer ALL the questions that follow. Volkswagen frustrated by govt inaction on power crisis Volkswagen s top executive in South
Read the article below and answer ALL the questions that follow. Volkswagen frustrated by govt inaction on power crisis Volkswagens top executive in South Africa said uncertainty about power supply is limiting the German carmakers ability to expand in the country. While theres been a twomonth hiatus in the power cuts that have plagued South Africa since no longterm solution has been presented to carmakers despite a tour of plants by Electricity Minister Kgosientsho Ramokgopa, Volkswagens local head said. The overall power situation brings South Africa to an uncompetitive situation in the automotive industry, Martina Biene, chairwoman and managing director of Volkswagen South Africa, said in an interview in Gqeberha, close to VWs factory. Isuzu and ourselves and the Ford engine plant, we are affected by load shedding, she said, using a local term for power outages. The uncertainty over electricity supply, caused by the poor maintenance of the state power utilitys coalfired plants, increases the cost of running the facility compared with VWs more than sites across the world, making it hard to argue for additional investment, she said. There is a further risk of other downstream businesses such as car resellers closing their doors. My biggest opposition is other VW plants, she said. While Biene welcomed the current lull in outages, she said the carperyear plant in Kariega, in the Eastern Cape province, had already spent R million on generators. The factory, which will soon become the companys sole producer globally of Polo hatchbacks thereby exporting its cards all over the world, needs megawatts of power to run apart from local raw material suppliers which also rely on electricity. The visit by the minister had yielded no results despite a discussion on a number of potential solutions, she said. Calls to the ministers spokespeople and emails to his office by Bloomberg werent answered. Power is our biggest obstacle, Biene said in an earlier speech. He came, we fed him well, it's great people are accessible but there is no outcome.
Answer ALL the questions in this section.
QUESTION Marks Using examples, discuss and explore the concept of core business risks in relation to VW and clearly assess the types of risks presented in the article above.
QUESTION Marks Discuss and explore the various types of financial risks that VW may be exposed to and based on the article, assess which two types of financial risks are most likely to materialise.
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
