The after effects of the worldwide economic and financial downturn have altered the business landscape and have challenged longstanding assumptions about successful operating structures. There is a need to establish a new "normal" for the automotive industry and the reality is that the game has changed, according to the report "Global Automotive Perspectives" by PricewaterhouseCoopers.
New approaches to everything automotive companies do from reporting to their stakeholders and the investment community to making decisions on tax and legal structures in a changed global market are essential.
Richard Hanna, global auto leader, PricewaterhouseCoopers LLP recently said, "During the last decade, the underlying competitive landscape has changed dramatically because of the emergence of new markets and new industry players as well as fundamental changes in the economic environments of the mature markets. The global recession has challenged the core operating models responsible for delivering the business strategy of many companies.
In addition to the traditional disclosures on results of operations, cash flows and financial position, users of financial statements want insight into management strategy for dealing with changing industry, extended liquidity information, and transparent discussion of risks and the company's outlook. Establishing a regular information flow between companies and the investment community develops a climate of confidence, creating a virtuous circle of transparency and credibility."
The report highlights three key themes:
• Robust and transparent reporting on financial results and outlook
• The golden rule of transfer pricing and how companies can help themselves
• Simplifying the business model