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SEC Correspondence with Autoliv Inc. - June 2006

June 28, 2006

Securities and Exchange Commission

Division of Corporate Finance

100 F. Street, N.E

Washington, D.C. 20549

Attention:  David R. Humphrey, Branch Chief

		Re:

      Autoliv Inc.

Form 10-K for the fiscal year ended December 31, 2005

filed February 28, 2006

File No. 1-12933

    	Dear Mr. Humphrey,

On behalf of Autoliv, Inc. ("Autoliv", the "Company" or "we"), we are writing to respond to the comments set forth
		in your letter to Mr. Magnus Lindquist, dated June 15, 2006, with respect to the above referenced filing of the Company.

		Set forth below are the responses to the Staff's comments, which have been provided in each case following the text of the
		comment in the Staff's letter. The Company does not propose to file an amendment to its 2005 Form 10-K.

		FORM 10-K (Fiscal Year December 31, 2005)

 Item 2. Properties

		Comment No. 1: For each of your facilities, please indicate whether the property is owned or leased.

Response: The Company will revise its future filings to specify which of its properties are owned or leased.

 Item 3. Legal Proceedings

		Comment No. 2: With respect to the December 2003 award to a supplier of Autoliv ASP, expand your disclosure to
		describe the nature of the underlying commercial dispute.

Response: The Company will revise its future filings to specify that the dispute relates to purchase
		commitments.  The Company does not believe a more detailed level of disclosure is required by Item 103 of Regulation S-K,
		and notes that, per Instruction 2 to Item 103 of Regulation S-K, disclosure of the dispute is not required since the amount
		of the claim for damages involved, exclusive of interest and costs, does not exceed 10 % of the Company's current assets.

		Autoliv Annual Report 2005

 Cash Requirements

		Comment No. 3: It is unclear why you have a policy that your working capital should not exceed 10% of your sales.
		Please expand your disclosure to explain why this target is a meaningful financial metric for investors to consider when
		evaluating your ability to meet your cash requirements.

Response: In view of the Staff's comments on the "CASH REQUIREMENTS" section of the Annual Report, we will
		in future filings rename the main caption to "CAPITAL STRUCTURE". We believe the policy that working capital should not
		exceed 10% of sales is an important financial metric for investors because it provides guidance on how we expect to manage
		cash generation. This cash generation is used to return funds to investors via dividends and share buybacks. In response to
		investor requests to clarify how our working capital may develop over time, management reviewed the relevant parameters and
		defined the policy that working capital was targeted not to exceed 10%. We believe the 10% benchmark is a realistic target
		for helping to manage our overall liquidity position. This target has been discussed as part of our financial results calls
		for analysts and investors over the last several years. In addition, the target is used internally as part of management's
		review of our internal business units.

		Please note that the definition of working capital that we use for this purpose is different than the traditional
		definition. We will further discuss our definition of working capital in response to Comment 11 below. Based on our
		conclusions in response to Comment 11, we will, in future filings, rename this measure "operating working capital".

		Comment No. 4: Similarly, explain the rationale behind your policies regarding your leverage ratio and your interest
		coverage ratio. Also, indicate whether these ratios are consistent with compliance covenants, if any, contained in your
		Revolving Credit Facility or other debt instruments.

Response: As part of the analysis of the Company's capital structure, both credit and equity investors
		desire guidance from the Company regarding the extent to which it would be prepared to leverage its operations. The Company
		has therefore defined a debt limitation policy consisting of a leverage ratio and an interest coverage ratio. The measures
		utilize generally accepted standards in the debt capital markets among credit analysts. Until December 2004, the measures
		corresponded to the financial covenants in our Revolving Credit Facility. As described on page 43 of the 2005 Annual
		Report, the Company no longer has financial covenants included in its Revolving Credit Facility, nor does it have such
		financial covenants included in any other debt instruments.

		Please note that we consider the definition of "net debt" that we use for this purpose to be a non-GAAP measure. We will
		further discuss our definition of net debt in response to Comment 10 below.

		Comment No. 5: In the context of your cash requirements, please explain how depreciation (including amortization)
		will cover anticipated capital expenditures.  In this regard, it is unclear how these non-cash charges will provide the
		cash required to fund your capital expenditures.

Response: The Company recognizes that depreciation and amortization do not provide cash. Our intention in
		this type of discussion is to provide the reader information as to our anticipated future capital expenditure levels. We
		will revise our disclosure in future filings substantially to the following effect, updated as appropriate:

"Furthermore, we expect capital expenditures over the next few years to approximately correspond to depreciation (including amortization)."

		Management's Discussion and Analysis

 Important Trends

		Comment No. 6: See the last sentence in the second paragraph under the heading "Component Costs". Supplementally
		tell us, and in future filings explain, the amount and nature of the certain costs that were reclassified in 2005 from
		'costs of sales' to R,D&E expense that resulted in an improvement to your gross margin. Tell us facts and circumstances
		that led to the reclassification in 2005 rather than in an earlier period, and advise why this was not considered to be a
		correction of an error.

Response: During the last several months of 2004, we completed a process to more clearly define our method
		of allocating, between cost of sales and RD&E, costs related to shared activities, such as quality, industrial engineering
		and purchasing.

		As a result of that process, we began in the first quarter of 2005 to report these costs in a more precise and consistent
		manner. As we did in our 2005 Annual Report MD&A, we disclosed the impact on margins during each of the quarters of 2005 in
		our Form 10-Q filings. The impact in each quarter was proportionally similar to the full year 2005 impact (i.e.
		approximately 0.3 percentage points on gross profit margin). We believe this to be more of a refinement of our existing
		accounting practice, rather than an error and consequently have reflected it as being analogous to a reclassification or
		reallocation on a prospective basis. We considered making a conforming presentation for all periods presented, but
		concluded that since this refinement did not have a significant impact, the effort to collect the necessary information for
		2004 and 2003 was not warranted on a cost/benefit basis.

		The Company will include disclosure in its future filings substantially to the following effect, updated as appropriate:

		"The gross profit margin increased by approximately 0.3 percentage points due to the prospective reclassification or
		reallocation from cost of sales of certain shared quality, industrial engineering and purchasing costs to R,D&E expense.
		This reallocation resulted from completion of a process by the Company to more clearly and consistently define its
		methodology for allocating such shared costs."

		Items Affecting Comparability

 Non-U.S. GAAP Measures

		Comment No. 7: Please expand to identify the non-GAAP measures that are presented in the discussion. Also, expand to
		identify how these measures are used by management, and disclose that the measures may not be comparable to similarly title
		measures used by other companies.  Tell us why a reasonable investor would not be able to use your GAAP financial
		statements in order to independently compute any necessary performance measures to analyze trends in your business. We
		suggest you give consideration to eliminating the non-GAAP measures to the extent they are not used by management or not
		critical to an understanding of your business.

Response: Rather than significantly expand on the discussion in response to this comment, we believe it
		generally would be more useful to the readers of our Annual Report to clearly identify and include tabular reconciliation
		presentations in the sections of the Annual Report in which the non-GAAP measures first appear. Please see our responses to
		Comments 8, 10, 11 and 13 below.  In addition, we would propose to include the following additional wording in the Non-U.S.
		GAAP Measures section of our Annual Report:  "These Non-U.S. GAAP Measures have been identified as applicable in each
		section of this Annual Report with a tabular presentation reconciling them to U.S. GAAP.  It should be noted that these
		measures, as defined, may not be comparable to similarly titled measures used by other companies."

		Year Ended December 31, 2005 versus Year Ended December 31, 2004

 Net Sales

		Comment No. 8: We assume your use of the term "organic sales" represents one of the non-GAAP measures used. As such,
		we suggest you either delete this measure, or provide a tabular presentation that identifies the sources of your sales
		growth, as well as any decreases, as reconciled to the consolidated total of "net sales".  In this way, you have identified
		and have an opportunity to discuss your sales growth in total, based on comparable sales volume or price from year-to-year,
		currency effects, and the impact of acquisitions and divestitures.

Response: We have used the term "organic sales" for a number of years to represent the underlying
		performance of our business, excluding the effect of changes in exchange rates and the impact of acquisitions/divestments.
		We believe that the term "organic sales", as we define it, is widely used in the financial community for companies whose
		operations are sensitive to currency fluctuations. Given that approximately 75% of our sales are denominated in currencies
		other than the U.S. dollar, we do not believe it is possible to understand developments in our business without an analysis
		of this sort. Further, we do not believe that it is possible for a reader of our financial statements to derive these sales
		values from the U.S. GAAP basis financial statements. The Company will include disclosure in its future filings
		substantially to the following effect, updated as appropriate:

    	Component of net sales increase (decrease) in 2005

    	Organic sales growth
		0.2%

    	Impact of acquisitions/divestments
		0.4%

    	Effect of exchange rates
		0.4%

    	Reported net sales change
		1.0%

Operating Income

		Comment No. 9: Discuss in detail the nature and costs incurred related to plant closures and other restructuring
		activities incurred during each year in which statements of income are presented and clarify that these costs have been
		reflected in the operating expense line item of "other income (expense), net."  We note you describe elsewhere in MD&A that
		your total headcount had decreased during 2005 by nearly 1,000. Disclose the total costs associated with this headcount
		reduction.

Response: In future filings, we will include a discussion in our MD&A of restructuring costs similar to that
		presented in Footnote 10 "Restructuring and Other Liabilities" in the "Notes to Consolidated Financial Statements", which
		also incorporates employee related restructuring costs.  With respect to the 2005 versus 2004 discussion, we will replace
		the term "Other expense, net" with the exact name of the caption in the "Consolidated Statements of Income (i.e. "Other
		income (expense), net") and clarify that these costs have been reflected here.

 Interest Expense, Net

		Comment No. 10: Reference is made to your disclosure of "net debt", as defined under the Liquidity section as
		"short-term and long-term debt and debt-related derivatives less cash and cash equivalents."  This appears to be a non-GAAP
		measure that should be deleted from the filing.  We also note you include this measure in Selected Financial Data under the
		measures of "Financial Position."  Please supplementally explain why this measure has been included in the filing, its
		specific purpose as used by management, and how your disclosure complies with Item 10(e) of Regulation S-K for presenting
		non-GAAP measures.

Response: The Company, as part of its funding strategy, always evaluates in which market and in which
		currency it is most cost efficient to raise funds. As part of efficiently managing our overall cost of funds, the Company
		enters into "debt related derivatives" or "DRDs". U.S. GAAP requires the fair market value of the DRDs to be accounted and
		reported for separately from the underlying borrowing being economically hedged. By adjusting for DRDs in the "net debt"
		definition, the Company discloses the total economic liability without grossing it up or down by currency or interest fair
		values that are offset by DRDs reported in other balance sheet captions.

		We believe that debt, adjusted for DRDs, is the relevant credit metric in terms of measuring refinancing risk, interest
		expense development, etc. This is how the debt management of the Company is run and this is also how the credit markets
		analyze the Company. This is most notably evidenced by the fact that the 16 banks participating in the Revolving Credit
		Facility, for which the Company provided financial covenants up until 2004, used the measure. Since it is not possible to
		derive this metric from the basic financial statements, we will, in future filings, include disclosure substantially to the
		following effect, updated as appropriate:

    	US$ in millions
	    December 31, 2005
	    December 31, 2004

		Short-term debt
    	$508.4
	    $313.8

		Long-term debt
	    757.1
	   	667.1

		Total debt
	    $1,265.5
		$980.9

		Cash and cash equivalents
	    (295.9)
		(229.2)

		DRD adjustment
	    (92.7)
		(152.5)

		Net debt
	    $876.9
		$599.2

		Please note that we recognize that the reduction of total debt by cash and cash equivalents", and thus presenting "net
		debt" is not essential to reflect the impact of the DRD adjustments. However, given the general lack of restrictions in
		dividending or lending cash internally, we believe that a presentation/discussion of "net debt" and of interest expense,
		net of interest income, in our MD&A is meaningful for investors and users of our financial statements. In fact, the metric
		used in our previous financial covenants used the "net debt" definition above. Accordingly, we do not see any compelling
		reason/benefits to "grossing-up" this presentation/discussion. Please see also our discussion below to Comment 11
		concerning working capital.

Liquidity and Capital
		Resources

Cash From Operations

Comment No. 11: Refer to your discussion of the amounts of working capital. Please expand to disclose your
		definition of working capital, as it appears your calculation includes or excludes items other than total current assets
		less total current liabilities. This appears to be a non-GAAP measure that should be revised to present a GAAP basis
		definition of working capital. To the extent you would like to highlight certain items on your balance sheet, we would not
		object to such a discussion within the context of GAAP basis working capital. Please advise and revise in future filings.

		Response: As indicated in the Staff'