Shares of Autoliv (ALV), the leading automotive safety systems company, plunged 5.10% in pre-market trading on Friday, January 31st, 2025.
The sell-off was likely driven by the company's announcement that dealer inventory reductions by major customers resulted in underperformance in the Americas region. This inventory adjustment by Autoliv's key clients appears to have dampened the company's performance and led to investor concerns.
Despite the setback in the Americas, Autoliv provided guidance for 2025, projecting around 2% organic sales growth and an adjusted operating margin of 10-10.5%. The company expects a 2% negative impact from foreign exchange on net sales. Additionally, Autoliv anticipates a challenging year for the automotive industry, with a slight decline in light vehicle production and continued geopolitical risks. However, the company remains optimistic about its strong order intake with domestic OEMs in China, which is expected to lead to a record number of new product launches in the region.
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