STOCKHOLM (Reuters) - Swedish auto safety gear maker Autoliv (ALIVsdb.ST) (ALV.N) halved its underlying full-year growth forecast on Friday on the back of weaker car markets in China and North America and raised its forecast for costs.
While Autoliv has been winning business from Japanese rival Takata Corp 7312.T, slowing car sales in important markets such as the United States have weighed this year and taking on new business has also resulted in mounting costs.
The world’s largest maker of airbags and seatbelts said full-year like-for-like sales were expected to be up 2 percent, compared with a previous estimate for a 4 percent rise.
“We can see that the estimates for global car production has been revised downwards. We are monitoring this tightly and taking the steps we need to,” Autoliv Chief Executive Jan Carlson told Reuters.
The Stockholm-based automotive supplier kept unchanged its full-year outlook for profitability but its shares fell 6.7 percent at 1118 GMT.
“We still see high light vehicle inventories, slow sales momentum and continued uncertainty in China and North America,” the company said in a statement.
Autoliv said second-quarter operating profit rose to $216 million, roughly in line with the mean analysts forecast and year-ago figure of $213 million.
Autoliv picked up business due to a recall scandal that engulfed Takata Corp, which filed for bankrutpcy last month. However, it raised its forecast for research, development and engineering costs this year to above 7.0 percent of sales versus the previous outlook of up to 7.0 percent.
Carlson said the firm had recruited around 1,300 engineers over the past year, exceeding a previous target of 1,000.
The new staff have been recruited to ensure it can deliver on the new business it has taken from Takata over the coming years, and to add staff to Autoliv’s active safety business, which sells products such as radar and vision systems.
Reporting by Johannes Hellstrom; editing by Johan Ahlander and Elaine Hardcastle