Autoliv says poised to boost capacity after Takata expands recall

STOCKHOLM (Reuters) - Swedish auto safety gear maker Autoliv (ALV.N) (ALIVsdb.ST) said on Wednesday it was ready to boost production capacity to meet increased demand as Japanese competitor Takata Corp (7312.T) recalls an additional 17 million airbag inflators.

Takata said separately it had doubled a recall of potentially lethal airbags to 34 million vehicles, making it the largest automotive recall in U.S. history.

"Exactly what this means for us is a bit early to say, but we are of course ready to increase our capacity and deliver to the industry as quickly as we can as we see an increased need," Autoliv spokesman Thomas Jonsson told Reuters.

Shares in Autoliv, the world's biggest maker of airbags and seatbelts, gained 3.7 percent on news of the Takata recall while the broader Stockholm All Share index (.OMXSPI) shed 0.2 percent.

The Swedish group said in January it targeted an additional production capacity of up to 25 million airbag inflators for delivery in 2015 and 2016 as a result of earlier Takata recalls.

In December last year, Autoliv said it would also supply replacement airbag inflators to Honda in the United States.

Jonsson said deliveries to Honda had begun in the second quarter and would increase gradually during the second half of the year and continue into 2016.

Autoliv shares are up 31 percent so far this year while the Stockholm All Share index has gained 13 percent.

(Reporting by Oskar von Bahr; editing Niklas Pollard)