Autoliv Inc. (ALV) has revealed that it has acquired a majority stake (51%) of Delphi in a Chinese seatbelt maker, Beijing Delphi Automotive Safety Products (BDS). BDS was a joint venture between Delphi and Beijing Hainachuan Automotive Parts Company (BHAP), initiated in 2008.
The joint venture has customers including Dongfeng Yueda Kia Motor Co. and Beijing Hyundai Motor Co. It is expected to generate approximately $30 million of annualized revenues in 2010.
Autoliv has a stable market share in both airbag modules and seat belts in North America, Europe and Asia. For airbags, the European market share is 65% and the North American market share is 38%. For seat belts, market share in Europe is 62% and in North America it is 28%. The company’s market share in Asia is 40% for both airbags and seat belts.
Autoliv has continuously expanded in low-cost countries (LCCs), including Romania and China, to meet local demand and to consolidate manufacturing from high-cost countries. The rise in light vehicle production in LCCs raised demand for automobile protection products.
Furthermore, expenditure in LCCs is about 55% of that in higher-cost countries. The company increased its headcount in LCCs to 60% in 2009 from 55% in 2008.
Presently, Autoliv has ten manufacturing facilities in China that supply to both global as well as domestic automakers in the country. In 2009, the company has opened a state-of-the-art technical center in Shanghai, China, that hosts over 200 engineers. Recently, it has also opened a test facility that can crash-test complete cars to support its customers in China.
In 2009, Autoliv’s sales in China zoomed 67%. The company’s organic sales in the country grew 59% in the year, which was11 percentage points higher than the Chinese light vehicle production. In 2010, the company’s sales in the country are anticipated to go up by 50% to over $700 million. Meanwhile, light vehicle production in the country is expected to grow by 20%.
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