Toyota's (NYSE:TM) series of recalls creates opportunities for investors. Automotive stocks are a clear play, but investors should also consider automotive safety system providers like TRW Automotive (NYSE:TRW). The automotive systems designed to keep us safe are becoming more complex as drivers are tempted to focus more on their cell phones than on the road ahead.

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Driver Safety
Have you ever fallen asleep at the wheel? Do you swerve a little while texting and driving? What about the time you changed lanes thinking that your blind spot was empty, realizing at the last moment that it wasn't? TRW is working to combine technology and sensing capabilities in order to alert drivers of these events before they happen. For example a vibrating steering wheel for drowsy drivers and a lane change assist/blind spot assist system to alert drivers of danger when changing lanes are current TRW products.

Lower Vehicle Production Hurts
TRW's net sales stalled for the first nine months of 2009, coming in at $8.2 billion and representing a 32.4% drop from the prior year. TRW's operating income of $60 million for the period versus $424 million a year ago also reflects the crushing effect of depressed automotive sales. Revenue's for TRW's Chassis systems for braking and steering, its largest contributor to revenues, dropped by $2 billion during the period. (For related reading, check out The Impact Of Recession On Businesses.)

Impact of the Big Three
Ford
(NYSE:F), Chrysler and General Motors are major customers of TRW Automotive systems. The major changes in the automotive industry still have an unclear impact on their future viability as primary customers. Investors should not be dismayed entirely since North America represented 30% of TRW's 2008 sales while Europe, Asia and the rest of the world generated 56%, 9% and 5% in comparison. North American sales will remain a significant driver, but the global reach of TRW offers growth opportunities beyond US shores. (For related reading, check out Going International)

Right on Track
I believe TRW is on the right track by focusing its growth initiatives around its electronics segment since more electronic content and passive safety systems are key selling points for car buyers.

Competition
Sweden based Autoliv (NYSE:ALV) also delivers automotive safety systems while focusing on airbag and seatbelt products. For the full year 2009 Autoliv sales also felt the weight of decreased automotive production as sales fell 21% to $5.1 billion. While those numbers reflect the market in Europe, North America and Japan, sales actually increased by 14% to $897 million in rest of the world including China and India. Autoliv also noted that Ford along with Asian and European automakers increased production in the fourth quarter of 2009.

Why Now Is Better Than Later
High unemployment, low consumer confidence and tight credit markets are the headlines of today - keeping auto buyers at home. A reversal of slow economic conditions and sustained positive growth stories from domestic and foreign automakers will likely lift the performance and stock of automotive safety system suppliers higher. (For more, check out Analyzing Auto Stocks.)

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