Autoliv, Inc.

What does it do?

Autoliv makes the safety equipment inside your car that you hope you never need — airbags and seatbelts. If you've driven pretty much any car in the last decade, you've likely sat in front of an Autoliv airbag without knowing it. They supply these systems to nearly every major car manufacturer in the world, from Toyota to Volkswagen to Ford. Think of them as the invisible safety net behind every car brand you already know.

How does it make money?

Autoliv makes money by selling airbag modules, seatbelt systems, and steering wheels directly to automakers — these are physical components bolted into cars on the assembly line, so revenue tracks closely with how many vehicles get built globally. In 2023, they generated $10.8B in revenue, up from $10.4B the prior year, showing steady growth even in a choppy auto production environment. Their profit margins are relatively thin for a manufacturer — net income was $0.7B on $10.8B in sales — because raw materials, labor, and R&D costs are high. They essentially win long-term contracts with car manufacturers, locking in revenue streams for the life of a vehicle model, which can last 5 to 7 years.

Why do investors care?

The core growth story is simple: more safety rules globally mean more airbags and seatbelts per car, so Autoliv's revenue per vehicle is rising even if total car production stays flat. Emerging markets, particularly China and India, are tightening safety standards rapidly, which is opening up a large new customer base that previously bought fewer or cheaper safety systems. For the thesis to work, global auto production needs to stay reasonably healthy, and Autoliv needs to keep winning new contracts as automakers launch electric vehicle platforms. Their dominant market position — they hold roughly 40% global market share in their core products — makes them difficult for automakers to replace.