STOCKHOLM -- Autoliv, the world's largest maker of airbags and seat belts, reported a third-quarter adjusted operating profit that matched expectations and said it outgrew global light vehicle production in the quarter.
“We had a solid quarter despite all the headwinds in the industry," CEO Mikael Bratt told Automotive News Europe.
Supply chain issues, a slowdown in electric vehicle demand and high costs have weighed on the auto industry. As a result, light vehicle production (LVP), on which Autoliv's profits depend, has declined, raising challenges for future sales.
For example, Stellantis's third-quarter deliveries fell sharply in Europe and North America after the automaker focused on reducing excess inventories following an unexpectedly dire cash-flow and profit warning last month.
The automaker also is ready to cut production further in Europe to make sure its mix of electric vehicles and internal combustion engine cars doesn't put it at risk of fines next year when tougher CO2 emissions targets take effect.
"Any time cars are not produced it is a negative, but I think we have managed to adapt quite a lot over the years," Bratt said in an interview on Oct. 18. "We are far from where we used to be in Europe — we are talking about several million cars. We just need to manage what we have in front of us in terms of light vehicle production."
In the third quarter Autoliv's organic sales declined 0.8 percent and it cut its organic growth forecast for the full year to 1 percent from the earlier expected 2 percent.
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Operating profit adjusted for litigation and other non-recurring costs fell 2.3 percent to $237 million from a year-earlier $243 million, Autoliv said in a statement.
Autoliv said its growth exceeded LVP by 4 percentage points in the quarter on a global basis following substantial outperformance in Europe and Asia, excluding China. Autoliv increase sales to domestic Chinese automakers 18 percent in the quarter.
"Despite this, we underperformed in China, due to a substantial negative LVP mix as lower safety content models grew strongly while higher content models [legacy] declined,” Bratt said in the statement.
Expanding on those comments, he said that Autoliv in the quarter got 40 percent of its China sales from domestic autonakers, up from 20 percent in 2022.
Citing a seasonally strong fourth quarter, the company maintained its guidance for about 9.5 to 10 percent adjusted operating margin for 2024, but said it expected to be at the low end of the range.
Autoliv ranks 29th on the Automotive News Europe list of top 100 global suppliers, with automotive sales of $10.47 billion in 2023.
Douglas A. Bolduc and Reuters contributed
