Owing to the rising demand for airbags in China and other
Asian markets, leading developer of automotive safety systems
) announced that it will be investing roughly $50 million to
build a textile center in China. Autoliv will enjoy a competitive
advantage by cutting supplier costs through vertical integration.
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Within the textile center, there will be a weaving plant, an
airbag cushion plant and a development center for airbag cushions
and textiles. The weaving plant will span across over 8,000
square meters and will employ 150 workers. Autoliv will be
producing airbags deploying 'one-piece-woven' (OPW) technology in
this plant. This technology will assist in making the airbag
cushions ready-made on the weaving loom.
Autoliv will also build another manufacturing building in this
site as an existing plant in Shanghai will be relocated here. The
move will expand production capacity and will provide employment
opportunity to around 1000 employees. The company also intends to
produce woven fabric for traditional 'cut and sewn' cushions in
The development center will be focusing on standardized designs
for the Asian region. With the completion of the project, Autoliv
will also boast of having in-house manufacturing of OPW in all of
its Europe, America and Asia regions once this center is
Last year, Autoliv produced 70 million airbag cushions in-house
and purchased 40 million from external suppliers for its total
production of 110 million airbags. This textile center will
increase the level of in-house component sourcing and standardize
designs globally. It will also enable shortening and streamlining
of Autoliv's supply chain.
Autoliv carries a Zacks Rank #3 (Hold).
Other stocks that are performing well in the industry include
Magna International Inc.
Johnson Controls Inc.
). Visteon and Magna carry a Zacks Rank #1 (Strong Buy), while
Johnson Controls has a Zacks Rank #2 (Buy).