width=398Autoliv, the world's biggest maker of air bags and seat belts, has seen stable demand despite expectations for slower car production in the second half of the year, its top executive said on Friday.

The Swedish company, whose customers include many of the world's leading auto makers such as GM, Renault-Nissan and Ford, expects to report its best quarterly result on October 26, nearly two years after reporting its first-ever quarterly loss.

Car production volumes have returned to pre-crisis levels and Autoliv has continued to profit from its cost-cutting and restructuring program, which it accelerated during the global downturn.

Autoliv Chief Executive Officer Jan Carlson repeated in a Reuters interview the firm's outlook for sales and operating margin for the third quarter, as well as the full year.

There is really no difference in the guidance we have communicated, we stick to that. And according that guidance, this will be the best quarter ever for us, he said.

Sales are seen rising almost 25 percent in the third quarter and by at least 35 percent for the full year, while the operating margin is expected to reach at least 10 percent in the quarter and more than 11 percent in 2010.

Autoliv's operating margin stood at 12.7 percent in the second quarter and came in at 3.9 percent last year.

Industry research body IHS said global production is still seen down 2.5 million units in the second half of this year, compared with the first half.

However, in mid-August IHS raised its forecast for global car production for the year, saying it was seen up 8 percent compared with the 7 percent forecast from mid-July.

This really is no surprise to us. We said when we gave our outlook that we thought they were on the cautious side, Autoliv Information Director Mats Odman said.

Carlson noted production forecasts for the second half of 2010 have been fairly stable since January and said uncertainty concerning fourth-quarter global vehicles production remained.

We don't see any slowdown in demand in our production system and as far as we can tell production volumes are not coming down. But the fourth quarter still remains, and it is still an open affair, he said.

(Editing by Sharon Lindores)