STOCKHOLM -- Sweden's Autoliv cut its 2019 sales growth outlook on Friday, as the car safety equipment maker became the latest casualty of a deteriorating global auto industry to report weaker than expected quarterly earnings.
Autoliv said it was stepping up actions to curb costs, which included plans to cut about 5 percent of its workforce and implement a sharper purchasing process. During the quarter, it cut 1,200 jobs.
Several automakers, including Autoliv's top customers Daimler and BMW, along with its suppliers have issued warnings in recent weeks as an expected recovery in demand has not panned out and trade wars inflate costs.
Autoliv, the world's largest maker of airbags and seatbelts, said it had experienced a challenging second quarter, dominated by "severe weakness" in global car markets and high raw material costs that reduced profitability.
"The uncertainty remains high in a falling market and we currently do not see any signs of a turnaround in light vehicle demand. Therefore we now indicate lower full year 2019 sales and profitability," CEO Mikael Bratt said in a statement.
The company, which competes with Joyson Safety Systems and ZF Friedrichshafen, forecast organic sales growth of 1-3 percent for 2019 and an adjusted operating margin of 9.0-9.5 percent, compared with its previous expectations of around 5 percent and about 10.5 percent respectively.
It also reported a fall in second-quarter operating profit to $170 million from $229 million a year ago. Analysts on an average had expected $199 million according to Refinitiv data.
Autoliv ranks No. 29 on the Automotive News Europe list of the top 100 global suppliers with worldwide sales to automakers of $8.68 billion in 2018.