I think if you look at our [indiscernible], I think many of them rather have actually increased prices on the core side. Then – what you’re referring to there, but I think in a broader extent, I think there is no doubt about that the industry as such are aware of what needs to be done here to compensate the value chain to make sure that we have a sustainable value chain in the industry. So in my discussions with our customers, that’s not a factor that we are considering here. We are looking at the facts around inflationary components hitting the value chain here and that’s what we are negotiating around.Mattias Holmberg Thank you.Operator We’re now going to take our next question. And the questions come from the line of Dan Levy from Barclays.
Please ask your question.Dan Levy Hi good afternoon to you. Thank you. First, I think this was slightly alluded to, but maybe you could just talk about on the cash flow, specifically the working capital dynamic, which was quite negative and just the swing of receivable that was a $200 million decline. Could you just explain that movement what we should expect going forward on the working capital fund?Fredrik Westin Yes. I mean, it was a bit of an unusual, say, first quarter that sounds that it was a very high month of a month ago, started from January then into December – into March, sorry. And that created a fairly large receivable balance at the end of the quarter. Whereas the other two working capital components, inventory and payables were, they follow us a normal pattern but the very significant sales increase towards the end of the quarter drove up the receivables.
But this should normalize then as also the, yes, and we do not expect the same type of growth profile for the next quarter that we have now within the first quarter, and then that working capital buildup should revert somewhat.Dan Levy Okay. Great. Okay. Thank you. So the working capital should reverse; great. And then just, want to go to the questions on inflation and specifically your release talked about inflation pressures in Europe, which didn’t flag Europe specifically in the past. Maybe you could just walk through the inflation dynamics by region and specific to labor, how labor is evolving, and what has been the tone and tenor of conversations with automakers to compensate on labor?Mikael Bratt Yes. I think if I start with the negotiator, I think it is just, what we’ve said before here, that when, I mean, it’s, I would say, it’s never easy to discuss and negotiate the price increases with our customers.
We were successful in those discussions during 2022 related to raw materials, and we are making progress also here in the non-raw material area. Of course it becomes a little bit more complicated in this space because in difference to the raw material side you don’t have the same type of reference points as you have on the raw material side, meaning that each plant and each site and each country are unique. So you need to go through much more of a even more detailed discussion with [indiscernible] that decide, it’s very much the same as on the raw material side; so we are making progress in that area.Fredrik Westin Yes. I mean, on the, how the inflation is hitting up; in general it’s no different from all the data you can get publicly. So it’s yes, there’s not much to say other than that.
I mean, we on the labor cost side there have been some countries where minimum wages have increased significantly or been raised significantly in Mexico. So that has a larger impact, but then also Turkey, where we have large operations is pretty significantly impacted by inflation, of course. But in generally you can look at where these industries are and they’re publicly available, and we typically follow them also for the countries that we operate in.Dan Levy Okay. And then Europe specifically is there some unique dynamic in Europe?Mikael Bratt I think in Europe, of course the war in Ukraine has impacted to some extent here. Of course the energy and also on freight, as the consequence of that, so yes, I mean, each region has their own region so to speak, and we hope the challenge within Europe.Fredrik Westin Yes.
But on that, and of course energy has been a much larger topic in Europe and also driving them up, the prices of purchase components from our supply base. So that has been significantly more of the challenge in Europe than it has been in other regions.Dan Levy Got it. Thank you.Mikael Bratt Thank you.Operator Due to time constraint we will now end the question-and-answer session here. And hand back the conference to the President and CEO, Mr. Mikael Bratt for closing remarks. Please go ahead.Mikael Bratt Thank you, Rafiya. Before we end today’s call, I would like to say that we are continuing to execute on productivity and cost reduction activities relying on our strong company culture. Our actions are creating both short-term and long-term improvements, and additionally we are evaluating ways to improve our footprint and to reduce our cost structures.
We believe these actions will enable us built an even strong position? Autoliv continue to focus on our vision of saving more lives, which is our most important direct contribution to sustainable society.Our second quarter earnings call is scheduled for Friday, July 21, 2023.Thank you everyone for participating in today’s call. We sincerely appreciate your continued interest in Autoliv. Until next time, stay safe.Operator Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect your lines. Thank you.
