Sweden's Autoliv Inc. is buying a Japanese seat-belt manufacturer to strengthen its presence both in Asia and North America while also boosting itself to the world's top belt producer. Once it completes the purchase of ball-bearing maker NSK's seat-belt division, the Stockholm-based company will hold about 25 percent of the global market for seat belts, said Barry Murphy, director of investor relations.
The belts use a variety of plastics, with the polyester webbing as the largest single piece and polypropylene, acetal and ABS used in covers and functional parts.
Autoliv announced the purchase plan Feb. 25. It will buy the business in three steps, beginning with NSK's North American operations by April 1. It plans to complete the purchase in 2003, Murphy said.
Final cost will depend on business performance, but is expected to exceed $72 million. The combined operation will employ more than 1,350 worldwide.
The North American business has annual sales of $70 million, with the rest of the division accounting for another $250 million in sales.
NSK of Fukuoka, Japan, has seat-belt production sites in Japan, Mexico and Thailand and a technical center in Bloomfield Hills, Mich.
The purchase is part of an expansion in Japan, which began in 1998 when Autoliv bought its Tsukuba air-bag assembly plant. Autoliv opened a technical center in the same city last year. The company also launched a joint venture called Autoliv-Nichiyo Co. Ltd. in 1998 with Japanese chemical group NOF to produce air-bag inflators. The Swedish company holds a 60 percent share in this enterprise at Taketoyo.
In addition, this year Autoliv wrapped up the purchase of Japan's second-biggest automotive steering-wheel company from the Izumi Group.
With the addition of the NSK division, Autoliv can offer a complete safety package to Japanese automakers, Murphy said.
"With the seat belts, which was the missing piece, we now have the whole system in place," Murphy said in a Feb. 29 telephone interview.
Autoliv has about $3.5 billion in sales annually to automakers, with more than half of its business in Europe. It has about 12 percent of the North American seat-belt market.
Top global competitor TRW Inc. now is the world's top seat-belt producer, but once Autoliv completes its NSK purchase TRW will lose the leading position, acknowledged Gary Klasen, communications director for Cleveland-based TRW's occupant safety systems in Washington, Mich.
"If they do purchase all of NSK as they announced, it would make them the largest," he said.
TRW would not disclose its current market share. TRW produces seat belts for Japanese automobiles made in the United States and has a sales and engineering office in Japan, but does not have a manufacturing site there, Klasen said.
Autoliv's purchase plan also will allow it to bring a familiar face to European carmakers as they set up partnerships in Asia, Murphy said.
"You want somebody who can promise the same quality pieces worldwide," he said. "We have in fact become part of a global company."
Plastics News European correspondent Richard Higgs contributed to this story.