Autoliv, Inc. Business Report FY2011

Business Highlights

Financial Overview

(in million dollars)
FY2011 FY2010 Rate of
Sales 8,232 7,171 14.8 1)
Operating income 889 869 2.3 -


1) Overall
-Net sales for 2011 increased by 15%, or 1,061 million dollars, primarily due to a 9%, or 631 million dollars, increase in organic sales. Currency effects increased sales by 321 million dollars and acquisitions by 110 million dollars. The organic sales increase of 9% was 6 percentage points more than the increase in global Light Vehicle Products: LVP. This was mainly due to the Company's strong performance in South Korea, China and North America.

Factors by products
-Organic sales of airbag products rose by 8% compared to the 3% increase in global LVP. The Company's outperformance primarily reflects the Company's strong position in side-impact airbags, a market that is growing faster than the market for frontal airbags.

-Organic sales of seatbelt products increased by 7% which was more than twice as much as the increase in global LVP partly due to market share gains in the expanding Chinese market.

Active safety
-Sales of active safety almost doubled from 85 million dollars to 160 million dollars, mainly due to new radar business with Chrysler and higher optional take-rates at Mercedes.


-The Company announced that it has acquired the airbag cushion cut & sewn assets from Milliken, a U.S.-based textile and chemical company. Under the terms of the acquisition, Autoliv is acquiring the machinery and equipment, laser cutters and sewing machines to increase the Company's capability to produce cut & sewn airbag cushions. These assets produce around 7 million airbag cushions annually and account for approximately 7% of the global textile cushion demand for Autoliv airbag systems. In the Americas, the company expects cut & sewn airbag cushion volumes to increase by more than 8 million units or 30% over the next three years. (From a press release on November 16, 2011)

Business Partnership

-The Company and Great Wall Motors signed a strategic cooperation agreement to enhance the technical cooperation on active and passive safety systems. The cooperation between the Company and Great Wall Motors began in 2003, when the Company produced seatbelts for Haval SUV, and developed and produced passive safety system for Florid, Coolbear and Voleex C30. In 2009, the Florid and Coolbear equipped with Autoliv airbags. (From a press release on July 6, 2011)

Business Overview

-The Company confirms its sales target for active safety products (radars and vision systems) and its market share. The target for 2015 is 500 million dollars with a global market share of approximately 30%. (From a press release on November 15, 2011)

-The Company announced that it expects to produce 1.6 million units of its Pyrotechnic Safety Switch (PSS) in 2011, mainly on luxury models. Production volumes are expected to more than double over the next three years. The PSS is an automatic safety switch which utilizes a pyrotechnic initiator to cut the electrical power to a designated portion of the vehicle in a crash. The safety switch is activated by the same crash sensors as the airbags. Cutting the vehicle's electrical power minimizes the potential for a fire caused by a damaged electrical system. (From a press release on September 15, 2011)


-The Company announced that it has been awarded the passive safety system for the 2012 Fiat 500 produced for sale in North and South America. The Company will produce both front and rear seatbelts, frontal airbags (driver, passenger and driver side knee airbag), side-impact airbags for pelvic and thorax protection and side curtain airbags for head protection as well as the steering wheel. The new Fiat 500 is manufactured at Chrysler Group's Toluca Assembly Plant in Mexico. The Company also supplies the passenger airbag and driver knee airbag for the Fiat 500 in Europe. (From a press release on May 16, 2011)


-The Company announced that Autoliv Spain received a gold award of Ford's World Excellence Awards for the fourth consecutive year. Additionally, Autoliv's Canadian safety restraint electronics unit was honored with a silver award. (From a press release on May 26, 2011)

-The Company was selected as a winner of the global Toyota Excellence Award 2010 for outstanding performance in "Value Improvement". In addition, Autoliv Japan was recognized for its quality achievements. The Company currently supplies Toyota in all regions with airbags, seatbelts and steering wheels. (From a press release on March 11, 2011)

-The Company announced that Autoliv Korea has been awarded the "HKMC Supplier of the Year" award for 2010 by Hyundai Kia Motor Corporation. This award was given in recognition of the Company's acquisition of what was formerly the occupant passive safety business (OPS) of Delphi Korea. During the first two weeks of 2011, the Company has already received three awards from other Asian car manufacturers. (From a press release on January 19, 2011)


R&D Expenditure

(in million dollars)
FY2011 FY2010 FY2009
Total 568 490 428

-During 2012, the Company expects to increase R,D&E expenses, net by more than 60 million dollars, mainly to increase its engineering capability in Asia and to strengthen its active safety.

R&D Structure

-The Company's Research consists of a group of approximately 50 highly skilled researchers working in a top-down manner to improve safety in real life traffic situations.

-The Company has approximately 4,400 engineers for product development and application engineering.

-The Company holds 17 technical centers in 9 countries.

Technological Alliance

-The Company announced that it has signed an agreement to acquire a long-range radar technology which will supplement the Company's own short- and medium-range radar from the German company ASTYX Communications and Sensors GmbH. The Company is acquiring an exclusive license to ASTYX 77 GHz Digital Beamforming (DBF) Long Range Radar (LRR) technology (hardware and algorithms). This technology will feature Full Speed Adaptive Cruise Control (SPACC) and Emergency Braking (EB). Autoliv's own 24GHz radar is primarily used for Blind Spot Detection (BSD), Rear Cross Traffic Alert (RCTA) and Collision Mitigation by Braking (CMbB). (From a press release on September 13, 2011)

-The Company announced that it is acquiring technologies, for automotive vision systems, from Hella Aglaia Mobile Vision GmbH, a German subsidiary of Hella KGaA Hueck & Co.. The Company is acquiring an exclusive license to Hella Aglaia's monovision based algorithms for Traffic Sign Recognition (TSR), Lane Detection and Light Source Recognition. The company will also cooperate to further develop and expand the functionalities of the existing safety systems for automotive and truck applications. More functionalities that will be added are Forward Collision Warning and Pedestrian Detection systems – these are intended to be included in the next generation of camera-based systems. The company expects to integrate Hella's technologies into its products by early 2012. (From a press release on April 19, 2011)

Product Developments

-The Company announced that it has developed the system that combines the controls for vehicle brakes with the controls for vehicle restraints. The brake control system can provide lifesaving functions such as Electronic Stability Control (ESC), Anti-lock braking (ABS) and Traction control (TCS). The efficiency of merging the control systems provides significant savings to vehicle manufacturers and enhances performance compared to the traditional, separate systems. The Company also announced that it has already been awarded production business for this system. In 2008, the Company became the first company to integrate the ESC inertial sensors with the control electronics for airbags and other restraint systems. (From a press release on October 25, 2011)

-The Company has developed a Mono Vision Sensing System (MVSS), a camera-based Advanced Driver Assistance Systems (ADAS), for BMW. This system provides a combination of safety and driver assistance features. The Company provides the complete system of hardware including the camera (which is mounted between the rear-view mirror and the front windshield) and the electronic control unit (ECU), which includes an EyeQ2 chip provided by Netherland-based MobilEye. The main focus of this system is safety in respect to Forward Collision Warning, which alarms a driver to an imminent collision with the vehicles in front as well as in the case of a Lane Departure. Other features available on this system are: Automatic High Beam Switching, with a smooth high/low beam transition, allowing for increased night time driving safety. Traffic Sign Recognition, providing the driver with information about speed sign zones. (From a press release on September 14, 2011)

-The Company presented the test results of the Company's new windshield pillar at the international conference Enhanced Safety of Vehicles (ESV). It is an expandable roof pillar for the windshield that is three times thinner than a traditional windshield pillar. This will increase the driver's vision angle by 25%. The weight of the pillar is reduced by 10%. In addition, the Company's new roof pillar will expand in a crash using airbag technology. When the gas generator expands the new pillar, the stiffness of the pillar increases by 45%. (From a press release on June 14, 2011)

Investment Activities

Capital Expenditure

(in million dollars)
FY2011 FY2010 FY2009
Total 357 224 130
% against sales 4.3 3.1 2.5

Investment Outside Sweden

-The Company announced that it is expanding steering wheel capacity at its location in Taubate near Sao Paulo, Brazil. The expansion will allow the Company, to double its steering wheel molding and assembly capacity in the region to more than one million units as well as expand die-casting capabilities for steering wheel armatures. This capital investment is expected to cost around 9 million dollars. The Company began steering wheel operations at the existing Taubate plant 12 years ago. The plant currently has 77 employees, and expects to increase to nearly 100 employees when the plant reaches full capacity. Autoliv South America produces airbags, seatbelts, seatbelt webbing and steering wheels for the South American market. The largest customers are Volkswagen, Ford, Peugeot and GM. The company announced it would also begin manufacturing airbag inflators at the Taubate location. (From a press release on June 13, 2011)

-The Company announced that it has begun the construction of an airbag cushion manufacturing plant in Chonburi, near Bangkok, Thailand. The Company's existing airbag cushion plant in Thailand opened just two years ago. The new facility will have capacity to produce 4.6 million cushions corresponding to 15% of the Company's global manufacturing capacity for "cut & sewn" textile cushions for airbag systems. The new facility in Thailand will occupy 8,000 square meters and employ 800 people – compared to 2,000 square meters and 270 employees for the existing plant. The plant, constructed on 30,000 square meters of land, has the potential to be expanded by 6,000 square meters to a total capacity in excess of 10 million cushions. The total investment cost is 9.4 million dollars. Initial production will start in July 2011. The new plant, together with the Company's facility in China, will enable the Company to produce 50% of its cut and sewn cushions in-house for the Asian markets. (From a press release on May 31, 2011)

-The Company has started an extension of its airbag and seatbelt assembly plant in Guangzhou, Guangdong province in China. The cost for the new building amounts to slightly less than 4 million dollars. The extension will increase the floor space by nearly 70%. The existing Autoliv plant in Southern China was brought into operations in 2008. Now the Guangzhou plant has 800 employees, which will be increased by 150 when the expansion is completed. The plant produces airbags and seatbelts both for the domestic Chinese market and for export to Japan. The largest customers are Honda, Nissan, Mazda and Toyota. (From a press release on April 13, 2011)

-The Company announced that it has started construction of a new seatbelt factory building in Nanjing, Jiangsu province, China that will replace the Company's existing plant in the city. The first construction phase of the new plant is approximately 50% larger than the existing Nanjing facility. The cost for the new facility, including the site of 66,000 square meters, should be about 10 million dollars. Currently, the Comapny has 800 employees in Nanjing, which will be increased by 200 when the expansion has been completed. The plant produces seatbelts for many of the vehicle companies in China, such as Shanghai Volkswagen, Shanghai General Motors, Dongfeng Peugeot Citroen, Chery Automobile, Geely Automobile, and SAIC Motor Passenger Vehicle. (From a press release on April 1, 2011)

-The Company announced that it has started construction of a completely new factory building in Changchun, Jilin province that will replace the Company's existing plant in this city in China. The cost for the new plant will be 6 million dollars. The new plant will more than double the existing floor space. The Company's Changchun plant manufactures seatbelts, frontal airbags and side airbags for FAW-Volkswagen, FAW Car, Great Wall, Beijing Benz Automotive, BMW Brilliance Automotive, and Shanghai GM (Shenyang) Norsom. Recently, the Company also announced an extension of its electronics plant in China. The Company has ten facilities in China, including a technical center. (From a press release on March 29, 2011)