Autoliv has accounted for virtually all of the major technological breakthroughs
in our industry over the last twenty years. This has contributed to establishing
Autoliv as the industry's global sales leader. Now the pursuit of new cost-efficient
safety technologies promises to secure Autoliv's leadership position and superior
profitability.
Autoliv's research, development and customer application engineering
(R,D&E) focuses both on inventing completely new technologies and on implementing
further improvements and cost-savings in existing products.
Despite the advent of airbags, safer vehicles and safer roads, there
still remains a compelling need for improved automobile safety. According to
estimates by the World Heath Organization, over one million people are killed
in traffic accidents every year throughout the world. By 2020, twice as many
will perish if nothing is done, and road traffic accidents will become the third
leading cause of death - compared to the ninth position today.
In addition to human suffering, traffic accidents cost societies
hundreds of billions of dollars annually for care, rehabilitation and lost income.
Global resources
To identify the types of traffic accidents to which we might apply Autoliv's
safety expertise, we research accident databases (such as CCIS in the
U.K, and NASS-CDS in the U.S). Our research and development also draws
on Autoliv's internal tests and trials, as well as on the vast expertise
that our specialists have gathered over many years. Autoliv's research
is also conducted in consultation with the vehicle manufacturers and the
Autoliv Technical Advisory Board, which consists of four world-leading
professors in safety and biodynamics from Europe, Japan and North America.
With 3,800 people in R,D&E and 20 crash tracks in nine
countries, Autoliv has more technical resources in automotive safety than
any competitor. We crash test hundreds of new vehicles every year, perform
several thousand sled tests and do tens of thousands of crash simulations
on computers. All of these tests give us unique insight into the way
vehicles and car occupants behave during crashes, enabling us to develop
new ideas for products and product improvements. It also enables us to
become better advisors to our customers and to design better software for
our electronic airbag controllers. Some of the crash tests are funded
externally by vehicle manufacturers or other external customers.
Corporate research is conducted by some 30 dedicated
specialists at our Swedish Safety Center. Corporate development projects
are assigned to Autoliv's leading tech centers in France, Germany, Japan,
Sweden and the United States. Application engineering projects are
completed locally in each major subsidiary. In total,
Autoliv currently has more than 2,000 R,D&E projects. The vast
majority of these projects (and associated costs) relate to application
engineering on existing products based on supply contracts from customers.
No single project accounts for more than 1% of Autoliv's total R,D&E
spending.
Total
Safety Concept
Our R,D&E stretches all the way from pre-crash projects to in-crash and
post-crash projects.
Post-crash systems include, for instance, "mayday systems" such
as Autoliv's On-Call System, which automatically calls an emergency center after
a crash. New in-crash systems are Autoliv's Pedestrian Protection Airbag
(PPA) and our Active Hood, which deploys upward to provide a flexible
surface when the pedestrian's head hits the vehicle hood.
Pre-crash systems include Autoliv's Active Seat Belt, which
pulls in a few inches of webbing when sensors indicate that a crash is likely.
It also releases the webbing if the driver manages to avoid the impact.
In addition to these projects and products in passive safety that
are aimed at injury prevention, Autoliv is developing a series of active safety
systems aimed at accident prevention. These systems intervene before the pre-crash
phase when the crash is still potentially avoidable. In this area, which is
relatively new to our industry, Autoliv is developing such systems as an infrared-based
Night Vision System and a Pre-Crash Radar that could be used in
combination with the Active Seat Belt and/or frontal airbags. Even if
this pre-crash system gives just a few more milliseconds to inflate the airbags,
it could open the possibility to make the airbags "softer" during deployment
without compromising their protection capability.
Patents and Trademarks
The number of patent applications from Autoliv has increased by 50% over the
past few years, partly as a result of a new policy to obtain stronger and broader
patent protection. Patent applications increased in all product and component
areas.
Autoliv holds over 3,000 patents covering a large number of innovations,
such as the Inflatable Curtain, rollover sensing, the one-piece-weaving
technology for airbags, the buckle pretensioner principle, the seat-mounted
thorax side airbag, the anti-whiplash seat principle and a vast number of other
systems and technologies. The patents expire on varying dates through the year
2023. The expiration of any single patent is not expected to have any material
adverse effect on Autoliv's financial position.
Autoliv also holds some trademarks, but trademarks are typically
not as important as patents in Autoliv's industry, since the products are not
sold directly to consumers.
During 2003, total gross expenditures for R,D&E (research,
development and customer application engineering) rose by 25% to $417
million, corresponding to 7.9% of sales. Since 1999, this R,D&E ratio
has increased from 6.6% with a low of 6.4% in 2000.
Of the 2003 amount, $112 million was related to customer-funded
engineering projects and crash tests. Net of this income, Autoliv spent
$305 million corresponding to 5.8% of sales. During the last five years,
this net ratio has increased from 5.2% with a low of 4.8% in 2000.
