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5. Autoliv Inc. Business Report FY ended Dec. 2019

Autoliv Inc. Business Report FY ended Dec. 2019

Factors
1) Net Sales
-The Company’s net sales decreased by 1.5% in the fiscal year ended December 31, 2019 to USD 8,547.6 million. Excluding currency translation effects, the Company had total organic sales growth of 1.2% over the previous year. The largest contributor to overall growth was Americas (+6.8%) and China (+4.5%). The largest organic sales decline was in Europe (-4.8%) followed by Japan (-3.4%).

2) Operating Income
-In the fiscal year ended December 31, 2019, the Company’s operating income was USD 726.0 million, a 5.8% increase from the previous year. Operating margin increased from 7.9% in the previous year to 8.5% of sales, due to lower costs for antitrust related matters.

3) Airbag products
-Sales of airbag products decreased by 0.4% in the fiscal year ended December 31, 2019 to USD 5,676.3 million. Organic growth increased by 2.0%, mainly driven by strong performance for steering wheels, particularly in Americas, with slight net growth contribution coming from airbags, as a result of growth in Americas and China and a decline in Europe. Inflator sales declined in North America, Japan and China.

4) Seatbelt products
-The Company’s seatbelt products had sales of USD 2,871.3 million in the fiscal year ended December 31, 2019, a decrease of 3.6% over the previous year. The segment had organic sales decrease of 0.2%, with main growth contributors being China and to a lesser degree Americas, offset by a decline in Europe. The trend of higher sales of more advanced and higher value-added seatbelt systems continued.
 

Contracts

-Major launches in 2019

Outlook

-For the fiscal year ending December 31, 2020, the Company expects that its net sales will increase by approximately 3 to 4%.

-In the fiscal year ended December 31, 2019, no single project accounted for more than 4% of the Company’s research and development expenditures.
 

R&D Facilities

-The Company has 14 technical centers in the following ten countries.

• China
• France
• Germany
• India
• Japan
• Poland
• Romania
• South Korea
• Sweden
• U.S. 

-Autoliv Japan Ltd. (Autoliv Japan, Yokohama City, Kanagawa Prefecture) has established a new research and development base, Japan Technical Center Tsukuba, in Tsukuba City, Ibaraki Prefecture. The company invested JPY 7 billion. It aims to strengthen development of automotive parts such as airbags and seatbelts and increase sales for Japanese automakers. The new center has about 13,000 square meters of total floor area. The company’s Tsukuba office in Kasumigaura City, Ibaraki Prefecture, which was its previous research and development facility, became too small due to Japanese automaker focused business expansions. Autoliv Japan will create 100 new jobs over the next three years to increase the work force to about 400 people in accordance with the establishment of the new technical center. The new center will engage in adaptation development, as well as advanced development for products such as autonomous driving airbags. The company aims to develop world first technologies in Japan, according to Junichi Nakamura, Autoliv Japan’s technology vice president. (From an article in the Nikkan Jidosha Shimbun on April 10, 2019)
 

R&D Activities

Joint research agreement with Great Wall
-The Company has signed a joint research agreement with Great Wall Motor Co. Ltd on the project of North America road safety evaluation in Baoding, China. This is to support the growth of Haval and Wey, the two international SUV brands of Great Wall, and to enhance their features in Safety. The Company and Great Wall Motor will jointly set up a North America road safety research lab. The Lab will combine the global technical and testing resources of both parties and focus on the North American market, at the same time, align with the regulations from road safety authorities, thus to support the implementation of the strategies of Great Wall Motor. (From a press release on September 5, 2019)
 

Product Development

New front center airbag
-The company announced the development of a new front center airbag that is designed to save lives in side-impact crash situations. The Autoliv Front Center Airbag will be introduced in 19 car models in 2020.The airbag will be showcased at the Company's Capital Markets Day held on November 19 at its technical center in Ogden, Utah. The new Autoliv Front Center Airbag helps avoid driver-to-interior and driver-to-passenger impact. The inboard seat mounted airbag deploys in the space between the driver and the front-seat passenger, providing protection for them from colliding during a side impact and reduces risk of trauma to head, shoulder and chest. (From a press release on November 18, 2019)

Exterior airbags for pedestrian protection
-The Company will start production of car exterior airbags that are used for the protection of pedestrians. The company has installed special test equipment at its development and production facility in Kasumigaura City, Ibaraki Prefecture, and established a system for joint development with Japanese automakers. The company intends to offer pedestrian airbags that have already been adopted by vehicles such as Volvo cars, as well as exterior airbag systems for the protection of motorcycle and bicycle riders whose head positions are higher than those of pedestrians. Demand for exterior airbags is expected to grow due to increasing needs for safety. Autoliv aims to start production as early as possible. The pedestrian airbag systems, which were used in the Volvo V40 for the first time, instantly detect collisions with pedestrians by using sensors, and then exterior airbags are deployed around the bonnet, windshield, and the bottom part of A-pillars. (From an article in the Nikkan Jidosha Shimbun on April 12, 2019)