Autoliv Inc.ALV

Morningstar Rating

Stock Research and Analysis

by David Whiston, CPA, CFE

Autoliv continues to lead the automotive safety equipment derby. Its position atop the standings is safe, despite fierce competition and a weaker environment for auto sales.

With more than one third of the market, Autoliv enjoys a large share in safety Read more

Bulls Say

Autoliv's exposure to the Detroit Big Three is not as critical as with other suppliers because a large part of Detroit's decline is in trucks and sport-utility vehicles, where Autoliv is relatively underrepresented.

Side-impact airbags are the fastest-growing product line in the market, and Autoliv has 40% share.

The company has a healthy balance sheet and is focused on increasing shareholder value.

Lower safety content per vehicle in emerging markets is a growth opportunity that Autoliv is best positioned to have success with as market leader.

Autoliv has a long record of developing safety innovations and spends about 6% of sales on R&D and engineering to help drive growth. Read more

Bears Say

Autoliv faces powerful customers that are reluctant to accept price increases as they compete for share in mature auto markets.

Like most auto-parts suppliers, Autoliv has significant fixed costs, so a small slowdown in sales could translate into a very large drop in profits.

Raw-material costs could rise again, which would make margin expansion very difficult.

Successful niche industries tend to attract competition, which could make it harder for Autoliv to maintain its leading market position. Read more

Strategy

Autoliv strives to expand its position as the leading manufacturer of automotive safety products. R&D is critical to this strategy because management believes the future of automotive safety is integrating Read more

Management

In April 2007, Autoliv named Jan Carlson president and CEO. Carlson replaced Lars Westerberg, who became chairman of the board upon leaving the CEO post. Before assuming his current post, Carlson held a number of executive posts with Autoliv, the most Read more

Profile

Autoliv is the leading manufacturer of safety parts for the automotive industry. Products include seat belts, airbags, side-impact airbags, and electronic safety products. Read more

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