Autoliv has hiked its financial forecasts for the third quarter and full year, saying that it had seen a faster recovery in light vehicle production than expected.

The company now expects its operating margin, excluding restructuring charges, to be close to 4% for the third quarter 2009. Consolidated sales for the quarter are expected to decline 15% to 20%, provided currency rates are stable, with key auto industry sales declining 10% to 15%.

In July, the safety equipment specialist said it anticipated operating margin of 1-3% absent special charges on consolidated sales off 20-25%.

The earlier forecast of mainstay sales 3-5% better than light vehicle production in its largest markets, North America and Western Europe, remains unchanged though customers’ light vehicle production plans for the second half of 2009 have now climbed 4%. Full year sales could now reach about US$4.9bn despite a 25% production drop in those key markets.

The company now expects restructuring costs this year of about $100m. In July it forecast at least $75m.

“Despite this increase, Autoliv now believes that it could reach a break-even operating margin for the full year including restructuring charges,” the company said. This compared with 1% predicted in July.