The airbag industry is growing so rapidly that the overall picture of its suppliers is continuing to develop. Currently there is a large number of second- and third-tier manufacturers supplying the airbag industry. There is a question-mark over whether some of the smaller manufacturers of individual airbag components will be able to survive or perhaps be swallowed up by the larger systems suppliers. The eventual structure of the industry will depend upon the best economies of scale. This extract from just-auto’s report on the global airbag and restraint market looks at market share developments.

At a news conference in December 1999, Autoliv’s president and chief executive, Lars Westerberg, said: “The battle is to be fought between six players among which Autoliv and TRW are clearly dominating. The growing consolidation among the vehicle producers is forcing a similar process on the automotive safety companies, which have to think about meeting clients’ demands in terms of volume, price and global coverage.” He added that the small companies are facing a risky future. “The future of a number of small and medium size firms in Europe, Japan and South America is in jeopardy.”

Consolidation continues as leaders enter new geographic markets

In an effort to get a foothold in the Japanese safety equipment market, Delphi recently joined forces with the Osaka-based seatbelt manufacturer, Ashimori. This latest move will allow Delphi to leverage its skills in electronics, airbags and seatbelts into its so-called Integrated Safety System, enabling it to compete with the other independent safety equipment manufacturers.

Until recently, Autoliv was underrepresented in Japan, employing just 200 people in the country last year, compared to nearly 7,000 in the US. However, Autoliv’s acquisition of NSK’s seatbelt business earlier this year coupled with the purchase of Japan’s second largest steering wheel manufacturer fills an important gap. Furthermore, Autoliv’s acquisition of 51% of Estonian seatbelt maker Norma Group further provides the Swedish group with a low-cost production base and entry ticket into the Russian market. Autoliv’s major priorities going forward are further improvements in seatbelts and steering wheels in North America. Its acquisition of NSK’s North American seatbelt will surely bolster its market position.

TRW also recently strengthened its automotive safety systems technology base in Russia through signing a technology licensing agreement with SAVVA Group to produce seatbelts for the Russian vehicle market. SAVVA will use TRW seatbelt technologies and manufacturing techniques at its seatbelt manufacturing plant in Russia’s Republic of Chuvashia. TRW will incorporate SAVVA’s transportation and logistics expertise in its business in Russia and the Commonwealth of Independent States (CIS). SAVVA supplies seatbelts to Russian vehicle manufacturers, AvtoVAZ, GAZ and Moskvich.

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In an interview with Dan Kinnavy, TRW’s occupant safety systems’ vice president of planning told us: “Without being too specific, the seatbelt technology that we are intending to offer the Russian carmakers, through SAVVA, is current technology used in North America, including advanced features such as pretensioners. Certainly, Renault in Moscow or Ford in St Petersburg will want to equip their vehicles with standard technology, which they are used to in the west. But whether the indigenous Russian carmakers will adopt our advanced technology remains to be seen.”

In November 2000, Autoliv entered into a joint venture with the Korean components producer, Mando Corporation, to make and sell airbags and seatbelts to local carmakers. Autoliv owns 65% of the new venture, known as Autoliv Mando Corporation. The partners expect to soon supply smart airbags and rollover protection systems to Korean carmakers. Operations are due to start early 2001 and annual sales are expected to reach $200m by 2005 as the main portion of new contracts that Autoliv has secured in Korea will be transferred to the new company.

On the flipside, the Japanese safety equipment producer, Takata gained a significant foothold in Europe overnight when it acquired the majority of the capital of German airbag manufacturer Petri AG, based in Aschaffenburg in June 2000. The acquisition effectively elevated Takata to the third biggest airbag manufacturer in the world. Takata says it plans to make quality airbags but cut their production costs. As a system developer of occupant protection systems, Petri’s product portfolio includes airbag steering wheels, airbag modules, airbag systems, airbag contact units, airbag inflators, steering wheels, horn buttons, and injection-moulded plastic components.

In 1985 Petri started mass production of contact units for airbag systems and, in 1993, passenger airbag safety systems. From 1995 Petri started the production of side airbags. It now manufactures approximately 5m airbags and 5m contact units per year. Petri employs 3,500 people at three plants in the Aschaffenburg area of Germany, the main one in Aschaffenburg itself, and the branches at Aschaffenburg-Nilkheim and Bad Kissingen-Albertshausen. An engineering centre for automotive safety is located in Berlin. Petri also has subsidiaries or associated companies in the Czech Republic, Poland, Romania, Turkey, Spain, France, Portugal, Italy, Brazil, India, the UK and the US.

World market shares

Autoliv shares global leadership positions in many areas with TRW Automotive. These two companies are estimated to hold around 60% of the automotive safety product market, with the remainder being taken by competitors such as Takata, Delphi and Breed.

During 1999 Autoliv manufactured 48m complete seat belt systems, of which almost 25m were fitted with pretensioners. TRW, meanwhile, produced 71m seatbelts in 1999 (compared to 70m seatbelts in 1998). Also during the year, Autoliv produced 37m airbag modules, including 13m side impact airbags. TRW produced over 24m airbags in 1999 (compared to 21m airbags in 1998), of which 400,000 were curtain airbags. Thanks to its three-stepwise acquisition of NSK earlier this year, which had a 7% share of the global seatbelt market, Autoliv has overtaken TRW as the world’s number one supplier of seatbelts, measured by market value rather than volume. We estimate Autoliv enjoys a 30% share of the global seatbelt market, only one percentage point ahead of TRW. This margin will widen as Autoliv completes its acquisition of NSK by April 2003.

Shares in the global automotive safety equipment market, 2000 (US$ market value)

North American shares

Autoliv’s position in the North American seatbelt market will inevitably improve as it completes each step of its phased 100% acquisition of NSK. Autoliv’s share of North America’s seatbelt business is currently around 10%. NSK has a 5% share of the seatbelt market in North America. A spokesman for Autoliv told just-auto.com that the company is planning to increase its share to 25% by 2004 through organic growth. He said: “There are not many more companies that we can acquire in the US. The market is fairly well consolidated.” He added that Autoliv was not interested in buying Breed Technologies.

Shares in the US automotive safety equipment market, 2000 (US$ market value)

European market shares

Autoliv is the clear market leader in Europe, accounting for approximately 50% of seatbelt sales and 45% of airbag sales. Autoliv’s main seatbelt competitors in Europe are TRW, Breed and Takata and, for airbags only, TRW, Takata (following its recent acquisition Petri AG) and Delphi. Competition from the major US manufacturers, however, is intensifying. In September 1999 Delphi announced it had won its first major airbag contract in Europe for VW and GM-Opel. Both contracts are for global vehicle programmes. Breed Technologies is included in the “others” group for seatbelts, supplying to Fiat and Opel.

Shares in the European automotive safety equipment market, 2000 (US$ market value)

Asia-Pacific market shares

In the Asia-pacific region, Takata dominates the airbag market followed by Tokai-Rika and TRW. In Japan, Autoliv reckons it has a strong position in the airbag inflator market with a share exceeding 40%. For complete airbags, its market share is still under 10% because local assembly of these products did not begin until 1998.

In Japan, South Korea and Australasia, Takata is said to lead the seatbelt market followed by Autoliv (thanks to its recent acquisition of NSK earlier this year), Tokai-Rika and Ashimori. Ashimori has a 15% share of the Japanese seatbelt market. Competition in Korea will intensify following Autoliv’s joint venture with Mando Corporation, noted above. Autoliv claims that the new venture will have a 35% share of the Korean market for seatbelts and airbags. Although Toyoda Gosei leads the Japanese airbag market, virtually all of its output is delivered to Toyota’s car plants. The Toyota affiliate has no seatbelt business.

Shares in the Japanese automotive safety equipment market, 2000 (US$ market value)

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