The global automotive transmission market size was valued at $62.4 billion in 2023 and is expected to reach $4.2 billion by 2028, at a CAGR of 6.2% during the forecast period. The growth in the automotive transmission market is primarily driven by technological advancements leading to more efficient transmission systems and stringent emissions regulations necessitating the adoption of fuel-efficient transmission solutions. Additionally, increasing vehicle production, rising demand for automatic transmissions, and the expanding market for electric and hybrid vehicles contribute to the market’s growth.
Automotive Transmission Market Dynamics
DRIVER: Growing demand for lightweight transmission systems
The introduction of government regulations for safety, carbon emission, and lightweight vehicles is forcing OEMs to use components that will help in an overall weight reduction of the car. Technological advancements play a significant role, with the adoption of lightweight materials such as aluminum, magnesium, and high-strength steel composites in transmission components offering substantial weight reductions without compromising strength or durability. Additionally, additive manufacturing, such as 3D printing, enables the production of complex, lightweight transmission parts with optimized designs. Improved transmission architecture and gear designs further contribute to weight reduction.
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OPPORTUNITY: Increasing adoption of automatic transmissions and development of hybrid drives
The automotive industry is witnessing a significant shift towards automatic transmissions, driven by urbanization, rising disposable income in developing automotive transmission markets, and technological advancements enhancing fuel efficiency and performance. Additionally, government regulations favoring lighter, more efficient vehicles and the integration of automatics with hybrid and electric powertrains further accelerate this trend. Furthermore, the increasing adoption of hybrid drives presents substantial growth opportunities fueled by environmental concerns, government incentives, and the potential for significant fuel savings and performance improvements. With expanding infrastructure and emerging markets, coupled with the potential synergy between automatic transmissions and autonomous driving systems, the future of the automotive industry is poised for transformative growth.
Passenger car segment is estimated to be the largest segment during the forecast period.
According to ACEA, global passenger car production witnessed a notable 8.7% increase in 2022 compared to the previous year. Asia Pacific emerges as the dominant region in the passenger car market, with China and Japan leading the pack. Projections from the International Energy Agency (IEA) highlight a significant surge in passenger car ownership, particularly in India, which is expected to contribute substantially to global vehicle production. The IEA forecasts a staggering 775% increase in passenger car ownership in India over the next 24 years, with the number of vehicles per 1,000 inhabitants rising from 20 to 175. Hatchbacks are popular in Europe and some parts of Asia Pacific due to their practicality, maneuverability, and cost-effectiveness. Traditional automatic transmissions (ATS) with 6-10 speeds are prevalent in the mid-size and large cars segment, prioritizing comfort and handling. Automatic transmissions are gaining popularity in the passenger car market due to their convenience and effortless driving experience, especially in congested urban areas. Advancements in technology have improved fuel efficiency and performance, making them appealing to a broader range of consumers. Options like continuously variable transmissions (CVTs) and dual-clutch transmissions (DCTs) further enhance their appeal, offering seamless acceleration and rapid gear shifts. Certain models like the Toyota Camry and Honda Accord may opt for continuously variable transmissions (CVTs) to optimize fuel efficiency. As consumer preferences evolve towards comfort and convenience, automatic transmissions will continue dominating the market.
The Asia Pacific automotive Transmission market is projected to hold the largest share by 2028
The Asia Pacific automotive transmission market is driven by robust growth, rising disposable incomes, and evolving consumer preferences favoring automatic transmissions. The region’s rapid expansion in vehicle sales, particularly in countries like China and India, fuels demand for transmissions, with a notable shift towards automatics due to increasing urbanization and stringent government regulations on fuel efficiency and emissions. Localization efforts and cost competitiveness further propel this growth as international and domestic transmission manufacturers establish production facilities in APAC to cater to the growing market demand.
Key Market Players
The automotive transmission market companies are Aisin Corporation (Japan), ZF Friedrichshafen AG (Germany), Magna Iternational Inc. (Canada), JATCO Ltd. (Japan), Borgwarner Inc. (US), Eaton Corporation (Ireland), Hyundai Transys (South Korea), Allison transmissions (US), Vitesco Technologies (Germany), Schaeffler AG (Germany), GKN Automotive (UK), and more.
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