Subject category:
Strategy and General Management
Published by:
IBS Case Development Center
Length: 9 pages
Data source: Published sources
Topics:
Currency risk management; Automobile industry; Exchange rate; Foreign exchange; Futures contract; Dollar, euro, yen; Operational hedging; Financial on-off balance hedging; Bretton Woods system; Plaza agreements, Louvre Accord; International money market; Hedging strategies; Financial Accounting Standards Board; Derivatives; Smithsonian
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Abstract
Volkswagen (VW) is a frontrunner in managing currency risk, as its risk management activities date back to the 1950s. But since 2002, VW had neglected currency risk hedging and as a result its share prices began to fall. Chrysler and BMW, are also known for currency risk management. However, these companies follow different strategies in managing their currency risk. The strategy choices depend on many factors. This case enables discussion on the evolution and the importance of currency risk management within the automobile industry.
Industry:
Other setting(s):
2004
About
Abstract
Volkswagen (VW) is a frontrunner in managing currency risk, as its risk management activities date back to the 1950s. But since 2002, VW had neglected currency risk hedging and as a result its share prices began to fall. Chrysler and BMW, are also known for currency risk management. However, these companies follow different strategies in managing their currency risk. The strategy choices depend on many factors. This case enables discussion on the evolution and the importance of currency risk management within the automobile industry.
Settings
Industry:
Other setting(s):
2004