Autoliv Comments on Volumes and Earnings Expectations

12/11/2000 9:39 AM EST

Autoliv Comments on Volumes
and Earnings Expectations

(Stockholm, December 11, 2000) -- Autoliv Inc. (NYSE: ALV and SSE: ALIV),
the worldwide leader in automotive safety systems, announced today that it
expects earnings per share for the current fiscal year and 2001 to be
below current average markets estimates of $1.95 and $2.15, respectively.
Some of the negative trends that were mentioned on October 19 in the
Company's report for the third quarter have continued. First and foremost,
the production of light vehicles in Europe, and especially in North
America, has declined at a faster rate than originally estimated. For
Autoliv this trend has been aggravated by its customer mix. Chrysler, for
instance, recently released that they expect their production in this
quarter to be down by 22% versus last year's fourth quarter. This trend
will probably continue into the next year, when GM, for instance, plans to
reduce its first quarter volumes in North America by 14% and Ford by 10%.

The estimated shortfall in Autoliv's North American sales during the
fourth quarter alone, will reduce earnings per share for the quarter by
approximately 12 cents compared with Autoliv's forecast at the beginning
of the quarter.

In addition, higher raw material prices have broken the favorable trend of
lower component purchase costs that Autoliv achieved during the year's
first six months.

Due to fluctuations in customer demand and a record number of program
launches during the fall, Autoliv's production costs have remained on a
higher level than usual for a fourth quarter.
Based on current market conditions and other current factors, the earnings
per share for 2000 is expected to total between $1.65 and $1.75, compared
to $1.95 for 1999. In addition to the above-mentioned North American
volume impact, 16 cents of the reduction is due to currency exchange
effects (including both translation and transaction effects) and
approximately 12 cents due to higher-than-expected material costs. During
the fourth quarter the decline of the Euro against the dollar is estimated
to be 17% compared to 12% during the first nine months of the year.
During 2001 the global light vehicle production is expected to decline, at
least during the first six months. Assuming that the current EUR/USD
exchange rate prevails through the next year, Autoliv's sales are
therefore expected to show only a modest growth, in US dollars, despite an
increase in shipments and market share gains.


To support Autoliv's rapidly growing number of contracts for new business,
the company's R&D expenditures will increase during 2001. Given the
initially high raw material prices, profit margins are likely to be under
similar pressure as during this year, but with higher pressure in the
first part of the year. Despite this, Autoliv expects net income to grow
during the second half, resulting in an earnings per share for the full
year at the same level as expected for this year.
Following the record order increase in 1999, Autoliv's order intake has
this year continued to grow at a double-digit rate (as reported in US
dollars) and the Company has recorded a number of break-through orders,
such as its first contract for rollover sensors in North America and its
first electronics order from BMW. Autoliv has also just received a major
contract for its new occupant sensing system for advanced airbags. As a
result, Autoliv's total sales of sensors and electronics are expected to
double within three years.

Currently, Autoliv has obtained contracts for more than 100 vehicle
programs for its side-impact head protection products. These new contracts
lead to higher R&D expenditures short-term, but they will also generate a
substantial increase in sales during several years.
"We will continue to move labor intensive production to low labor-cost
countries", declared Autoliv's CEO Mr. Lars Westerberg and continued by
saying that "we will speed up standardization and better leverage our
purchase power that our expanding production volumes provide. We will also
cut overhead costs in several operations. As a result of these actions and
our large number of new business contracts, we are confident that Autoliv
will emerge stronger than before".
Autoliv will report its fourth quarter 2000 results on January 25, 2001.

Statements in this release that are not statements of historical fact may
be forward-looking statements, which involve risks and uncertainties,
including - but not limited to - continued fluctuation of foreign
currencies, fluctuations in vehicle production schedules for which the
company is a supplier, continued uncertainty in program awards and
performance, the financial results of companies in which Autoliv has made
technology investments, and other factors discussed in Autoliv's filings
with the Securities and Exchange Commission.

Inquiries:
Lars Westerberg, President & CEO, Autoliv Inc., Tel +46 (8) 58 72 06 20
Mats Ödman, Dir. Corp. Com., Tel. +46 (8) 58 72 06 23, or mob. +46 (708)
32 09 33
Patrick Jarboe, Director Investor Relations, Tel. +1 (248) 475-0407