STOCKHOLM – At a China seminar this week in Stockholm, Sweden, Jan Carlson, president and CEO of Autoliv, announced that the company has started the construction of a new facility in China that will manufacture propellant for its airbags in the Asian markets. Previously, the propellant for Autoliv’s airbags for the Chinese market have been imported from the U.S. Producing the propellants locally in China will save shipment and inventory costs, the company says.
 
The cost for the new plant is estimated at $33 million, making it the single-largest capital expenditure in the company’s history. The propellant plant will be Autoliv’s 12th manufacturing facility in China.
 
Autoliv said the new plant is needed to meet the strong long-term growth for automotive safety products in China and other Asian markets. This growth is driven by higher vehicle production and the ever-increasing trend toward more airbags in each vehicle. Even though the number of vehicles has increased rapidly in the Asian emerging markets, the vehicles are still few in relation to the population and the geographical size of many of these countries.
 
In China, for instance, there are still only 100 vehicles per 1,000 people compared to 500 in Europe and nearly 900 in the U.S. Frontal airbags have become common in new vehicles sold in China. However, most new vehicles in China still do not have side-impact airbags, and the other emerging markets in Asia have not even come as far as China in their automotive safety developments. This will drive a strong demand for airbags in Asia and is the main reason for this significant investment by Autoliv.