Autoliv (ALV) is a "rare" auto supplier benefiting from market dominance and a clear path to significant earnings growth, RBC Capital Markets said in a report emailed Friday.

The company's inflator technology is the "secret sauce," while business from Chinese automakers expanding into Europe could help offset weaker exposure to domestic original equipment manufacturers in China, RBC said.

The company has a roughly 45% share worldwide of both air bags and seat belts, far ahead of its nearest rival at about 20%, making scale a central part of its investment case, according to the note.

A key driver of Autoliv's "market share dominance" is its air bag inflator technology, a low-cost but high-risk component where safety failures can be catastrophic, the report said.

RBC has an outperform rating on Autoliv, with a price target of $144.

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