Component maker Autoliv is making good use of different interest rates in the US and Europe.

The biggest maker of vehicle air bags and seat belts reportedly said on Tuesday it would make a US$518 million one-time cash transfer to its US subsidiary to lower its tax and interest payments.

Autoliv said in a statement cited by Reuters that the payment would mean the firm would reduce its level of net debt in the United States, replacing it with net debt in Europe where interest rates were currently about 2% lower.

The report added that Autoliv had made a similar $337 million cash distribution from Sweden to the United States. It reportedly said the transactions would result in a $10 million charge, $7 million of which would be booked in the fourth quarter.

"Aggregated interest and tax savings associated with these transactions are expected - given current interest rates in Sweden and the U.S. - to be around $17 million annually on the net income line," the firm said, according to Reuters.