Autoliv, the world’s top maker of airbags and seatbelts, expects sales to grow at a slower pace next year after an 8% growth this year, the Swedish firm’s chief executive told Reuters on Tuesday.
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“We think the car safety market grew 3-4% this year and we grew 8% organically. It is an unreasonable pace to keep, so growth will most likely fall next year,” Lars Westerberg said in an interview.
Autoliv, which last year had a growth rate of 5% organically – without accounting for acquisitions – expects tough competition and slow car production growth to dampen demand for its products, Westerberg reportedly said.
“2005 will be the third year in a row without growth in our traditional markets and it is a challenge to be able to grow when underlying volumes don’t,” he told Reuters. “If our growth would fall to market pace, which does not seem unlikely in the long run, we will grow by 3-4%.”
Reuters noted that two Autoliv major clients, Ford and General Motors, recently said they plan to cut production in North America by 7-8% in the first quarter next year due to weak demand while the supplier itself said it expects fiercer competition on the US market as well as rising raw materials costs, which has led the company to cut production costs in North America.
Autoliv reportedly said it expects stable prices next year for steel, which represents almost half of its purchasing costs. Oil stands for 10% of costs, while components make up for 7%.
“The raw materials price development is with no doubt a challenge. The cost pressure from Ford’s and GM’s problems is spilling over to us as well,” Westerberg told Reuters.
