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Autoliv Narrows 2026 Margin Target To Around 10.5% As Raw Material And Logistics Costs Climb

The airbag and seatbelt maker kept its sales and cash flow outlook, but cost pressure pushed margin guidance to the bottom of its prior range.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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Autoliv Narrows 2026 Margin Target To Around 10.5% As Raw Material And Logistics Costs Climb

Autoliv, which makes airbags, seatbelts and steering wheels for automakers, narrowed its full-year adjusted operating margin outlook to around 10.5%, the low end of its prior range of around 10.5-11%, as it reported third-quarter net sales of $2,693 million, down 0.5%. The company's release, issued Friday, blamed higher raw material, logistics and Thailand flooding costs.

Slightly lower sales and profit

Organic sales, which strip out currency effects, fell 1.1%, while global light vehicle production fell 1.9%, according to Mobility Global. Diluted earnings per share dropped 6.8% to $2.13.

Operating income fell 5.0% to $254 million, and operating margin was 9.4% against 9.9% a year earlier. Adjusted operating margin was 9.7% versus 10.0%. The company said operating income was hit mainly by a supplier settlement payment received in the third quarter of 2025.

Operating cash flow was $239 million, compared with $258 million a year earlier. Autoliv repurchased 1.23 million shares for $150 million and paid $63 million in dividends. For the first nine months, net sales were $8,249 million, up 3.1%.

Costs eat into the margin

CEO Mikael Bratt said cost headwinds "have increased materially," mainly from raw materials, logistics, the recent Thailand flooding and lower call-off accuracy (how closely customer orders track forecasts) since the first quarter. Autoliv offset most of it through labor efficiency, material savings and negotiations with customers and suppliers, he said, but the added pressure narrows the margin outlook.

Raw material prices cost the company a gross $42 million in the quarter, and it estimates about $120 million for the full year, most of which it expects to mitigate. Guidance for organic sales growth of around 0% and operating cash flow of around $1.2 billion is unchanged.

Bratt said the company anticipates "a strong fourth quarter" on more product launches and significant raw material recoveries.

China and India carry growth

Autoliv, which reported 2025 sales of $10.8 billion, saw sales to Chinese automakers grow about 21% organically while sales to global automakers in China fell about 29%. Chinese automakers made up 58% of its China sales, up from around 46% a year ago. India sales grew 29% organically, which the company tied to rising safety content per vehicle.

The company opened a second R&D center in China during the quarter and plans an Investor Day in Shanghai on April 26 and 27, 2027.

Autoliv plans to report fourth-quarter results on Friday, January 29, 2027.

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