Jan 30 (Reuters) - Car safety gear maker Autoliv forecast on Friday a full-year 2026 adjusted operating profit margin of around 10.5-11.0% as it reported a fourth-quarter adjusted operating profit
Swedish car parts supplier Autoliv expects no organic sales growth in 2026
Autoliv's Sales Forecast and Market Challenges
By Marie Mannes and Tomasz Kanik
Impact of Global Vehicle Production
STOCKHOLM, Jan 30 (Reuters) - Swedish car safety gear maker Autoliv predicted on Friday no organic sales growth in 2026 amid stalling global vehicle production, with first-quarter margins expected to be lower than the year-ago period, sending its shares down 9%.
Margins and Profit Expectations
Many global automakers are struggling in the face of weakening demand and rising competition, in turn negatively affecting their suppliers. Industry forecasters warn global car production will slow due to tariff uncertainty, high inflation and increased cost.
Challenges from Chinese Market
Shares in Autoliv, the world's largest producer of airbags and seatbelts, were down nearly 5% on the Stockholm bourse by 1520 GMT, having been flat ahead of its report and down as much as 9% following the announcement.
Analysts pointed to the outlook as weighing on the stock.
Autoliv guided for roughly flat group organic sales this year, saying its 2026 assumptions see a 1% decline in global light vehicle production (LVP), a metric Autoliv is highly dependent on and compares itself against.
CHINA EXPECTED TO WEIGH ON MARGINS
The Swedish company has generally managed to deliver solid results even when the car market slows, consistently outperforming global LVP by having a broad customer base and expanding market share with Chinese automakers.
"People are used to Autoliv outgrowing the light vehicle production by at least four percentage points... but now they are guiding for only 1% outperformance compared to what they had last year so that's a disappointment," Handelsbanken analyst Hampus Engellau told Reuters.
However, Chinese domestic carmakers typically have lower safety feature content in their vehicles, which results in a less favourable sales mix for Autoliv.
For the fourth quarter of last year, Autoliv's adjusted operating profit fell 3.5% to $337 million, roughly matching expectations.
Autoliv said first-quarter margins will be weighed down by an expected drop in Chinese LVP of nearly 1 million vehicles, as well as lower engineering income and as a gain from the sale of its Russian unit will not be repeated.
"Unfortunately, light vehicle production is negative, and that's nothing we can do about... but in terms of our own abilities in this market, we look quite positively on it," CEO Mikael Bratt told Reuters.
For the full year, it expects an adjusted operating margin of around 10.5% to 11%, at the lower end of what consensus had expected, Pareto analyst Forbes Goldman said.
(Reporting by Tomasz Kanik in Gdansk, Marie Mannes in Stockholm; Editing by Anna Ringstrom and Emelia Sithole-Matarise)
