Autoliv Adjusts Guidance - Accelerates Action Program

(Stockholm, December 12, 2008) – – – Autoliv Inc. – the global leader in automotive safety systems – today announced being ahead of schedule in reducing costs. However, the reductions in global light vehicle production for the current quarter will be significantly worse than previously anticipated. Consequently, the Company is adjusting its financial guidance.

Autoliv’s margin performance in October and November was in line with the Company’s guidance. However, due to standstill in many customers’ vehicle assembly plants, organic sales in December will drop dramatically, by more than 40%.

As a result, Autoliv’s organic sales are now expected to decline by more than 25% in the fourth quarter, resulting in an average decline for the year of almost 10%. Given current currency exchange rates, consolidated net sales are now expected to decline by more than 30% in the quarter and by close to 5% for the full year. In October, organic sales for the quarter were expected to decline by approximately 12% and by an overall rate of 6% for the full year.

The Company has responded aggressively to the rapid market deterioration and has accelerated the actions that were announced in July. At a cost of $75 million, this Action Program should save $120 million in 2010 with targeted headcount reductions of 3,000 by the end of 2009. However, actions taken in response to the market development have now reduced headcount by 4,000. Two plants are currently in the process of being closed. These intesified restructuring activities will continue unabated into 2009.

Assuming continued timely customer payments, Autoliv still expects to report for the fourth quarter an operating income excluding restructuring costs at breakeven and a positive operating cash flow even after capital expenditures. This is despite the rapidly deteriorating light vehicle production, especially in December.

For the full year 2008, operating margin excluding restructuring charges is now expected to be close to 6% compared to the previous guidance of around 6.5%.



Inquiries:
Jan Carlson, President & CEO, Autoliv Inc +46 8 587 20 600