Autoliv (Buy, TP: SEK910.00) - ZF recall could have significant positive impact on Autoliv
Yesterday Autoliv was mentioned in a product recall of 461k cars by Volvo Cars. Although Autoliv made the airbag, the faulty component (inflator) came from its competitor ZF, hence we believe Autoliv bears no responsibility and should see no claims relating to this. The issue with ZF’s inflator seems very similar to those concerning Takata’s inflators, which resulted in substantial recalls in 2014. According to the NHTSA, the air-bag inflator may explode during deployment, resulting in sharp metal fragments striking the driver or other occupants, resulting in serious injury or death. This is due to propellant degradation occurring after long-term exposure to high absolute humidity, high temperatures, and high temperature cycling. When Takata began its recalls in 2014, Autoliv increased its market share from 37% to 50% (take-rate). ZF has a global market share of 17%.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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