Automotive Transmission Systems Market is thriving with Increased Production of Electric Vehicles

 

Automotive transmission systems enable smooth and efficient transmission of power from the engine to the wheels. They play a crucial role in transferring torque while allowing the vehicle to maintain different speed ratios. Automotive transmission systems allow gear shifts to occur automatically based on the engine revolutions per minute (RPM) and vehicle speed for better performance and drivability. Manual transmissions give drivers more control over gear selection but lack the convenience of automatics.

The Global Automotive Transmission Systems Market is estimated to be valued at US$ 43.40 Bn in 2024 and is expected to exhibit a CAGR of 6.3% over the forecast period from 2023 to 2030.

The automotive transmission market has seen steady growth over the past decade owing to the rising vehicle production globally and increasing uptake of automatics over manuals. Consumer preference for automatic transmissions has been a key factor due increasing traffic congestions in developing nations which necessitate ease-of-driving. Moreover, automatic transmissions help improve fuel efficiency with optimized gear selection. Manufacturers are investing in lightweight materials and more gear ratios to provide better performance and higher mileage. With Original Equipment Manufacturers prioritizing electrification, demand is gaining traction for lightweight and efficient EV transmissions as well.

Key Takeaways

Key players operating in the Automotive Transmission Systems are ZF Friedrichshafen AG, Aisin Seiki Co., Ltd., BorgWarner Inc., and Eaton Corporation plc. ZF Friedrichshafen AG offers a range of 8-speed and 9-speed transmissions suitable for passenger cars and commercial vehicles. Aisin Seiki Co., Ltd. is a leading supplier of automatic transmissions to Toyota Motor Corporation.

The global automotive transmission market is primarily driven by rising passenger car production in Asia Pacific with countries like India and China among the top auto manufacturing hubs. Expanding middle-class population and increasing disposable income have accelerated vehicle ownership. As more people embrace car ownership, demand for newer vehicles with advanced transmissions continues to surge.

Leading OEMs are increasingly localizing production to cater to local demand. For instance, major transmission manufacturers like ZF and Aisin have established manufacturing bases in Central Europe, North America, China, and India to reduce logistics cost and ensure timely supplies. This allows them to leverage economic incentives and production-linked incentives by respective governments.

Market Key Trends

One of the major trends gaining traction in the automotive transmission market is the rise of electric vehicles. With stringent emission regulations and increasing focus on sustainable mobility, EV adoption is growing rapidly across major automotive markets. This has stimulated R&D around developing new-age transmissions optimized for EV powertrains. Manufacturers are investing in single-speed transmissions and gears dedicated for electric cars with improved efficiencies. Lightweight and compact designs with lower part counts are paving the way for next-gen EV gearboxes.

Porter’s Analysis
Threat of new entrants: The automotive transmission systems market requires high R&D investments and manufacturing experience which makes entry difficult for new players.

Bargaining power of buyers: Individual customers have low bargaining power due to availability of various brand and model options. However, OEMs have significant bargaining power due to their high purchase volumes.

Bargaining power of suppliers: The presence of many component manufacturers reduces the bargaining power of individual suppliers in this market.

Threat of new substitutes: There are no close substitutes for transmission systems in vehicles currently.

Competitive rivalry: The market is dominated by a few major global players intensifying the competitive rivalry.

The automotive transmission systems market in Asia Pacific is concentrated in China, Japan and India due to high vehicle production volumes in these countries. The region accounted for over 50% of the global market share in 2022. North America is projected to witness the fastest growth during the forecast period due to increasing demand for luxury and sports vehicles with advanced automatic transmissions in the US and Canada.

The automotive industry in Europe faces stricter emission norms encouraging higher adoption of efficient automatic transmissions replacing manual ones. However, declining car sales amid economic slowdown pose challenges. In South America, countries like Brazil and Argentina are likely to drive the market owing to recovering economies and expanding middle-class population aspiring for private vehicles. Overall, emerging economies with rising disposable income and robust automotive sector will fuel the future Automotive transmission systems demand globally.

 

About Author:

Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials,  etc

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it