Autoliv, the world's biggest maker of air bags and seat belts, said on Friday it planned to restructure its operations in Australia, cutting 565 jobs in order to lower costs.

According to Reuters, Autoliv has been gradually moving production from countries in western Europe and the United States to regions where labour costs are lower, mainly in Asia and eastern Europe, amid fierce price pressure from car manufacturers.

The measures in Australia would cost about $US5 million, to be accounted for gradually starting in the second quarter, but lead to annual savings of an equal amount once completed in 2007.

"These actions are necessary to ensure that Autoliv Australia remains competitive in a climate of global sourcing by the car companies and continued price pressure," it said in a statement cited by Reuters.

Autoliv said 350 jobs at its Australian operations, related to exports of its products to South Korea, would be moved to South Korea and low-cost countries, mainly China, while another 150 jobs would be made redundant.

"This reduction of 500 jobs will be phased in during this year and 2006," the firm said, according to Reuters.

Autoliv reportedly said it expected "competitive pressures and lack of critical volume" would force it to close its VOA Webco seat belt webbing plant within 18 months, affecting another 65 employees.