June 21, 2024
All Wheel Drive Market

All Wheel Drive Market is Estimated to Witness High Growth Owing to Rising Demand for Higher Vehicle Traction and Safety

The all wheel drive market consists of automotive drivetrain systems that provide torque to all road wheels on a motor vehicle simultaneously. These systems offer advantages such as enhanced traction, control and safety on surfaces with different coefficients of friction. The growth in demand for sport utility vehicles, crossovers and passenger cars with off-road capabilities has significantly driven the adoption of all wheel drive systems globally.

The Global all wheel drive market is estimated to be valued at US$ 38.24 Bn in 2024 and is expected to exhibit a CAGR of 7.9% over the forecast period 2024 To 2031.

Key Takeaways

Key players: Key players operating in the All Wheel Drive Market Growth are AB Volvo, American Axle Manufacturing, Inc., BorgWarner Inc., Continental AG, Dana Incorporated, GKN Plc, Honda Motor Company Ltd., JTEKT Corporation, Magna International Inc., Nissan Motor Co., Ltd.,, Tesla, Inc., Valeo SA, ZF Friedrichshafen AG. These players are focused on adopting strategies such as partnerships, new product development and mergers & acquisitions to gain traction in the all wheel drive market.

Key opportunities:

The growing demand for lucury and performance SUVs, crossovers and sports cars offers significant opportunities for all wheel drive system manufacturers and OEMs to expand their product portfolio and revenue stream. In addition, the development of electric vehicles with enhanced traction and handling capabilities will further boost the demand.

Global expansion: Leading automakers are focusing on expanding their all wheel drive offerings globally, especially in developing markets of Asia Pacific and Latin America. Manufacturers are also localizing their production processes to cater to the regional requirements. Strategic collaborations with OEMs and tier I suppliers plays a major role in facilitating international expansion.

Market drivers:

Increased safety regulations mandating advanced traction control technologies on passenger cars have significantly contributed to the growth of the all wheel drive market. In addition, consumer demand for higher performance, stability and handling especially in adverse weather conditions has further fuelled adoption. This is expected to remain a major driver over the forecast period.

Market Key Drivers:

Rising demand for higher vehicle traction and safety will continue to be a major growth driver for the all wheel drive market over the forecast period. Tougher emissions norms and safety regulations have increased adoption of AWD technologies globally. Consumer demand for advanced all-wheel-controlled vehicles offering enhanced stability, traction and handling has also fueled market expansion. OEM focus on incorporating optional AWD in more vehicle segments to increase average selling price is another key factor driving revenues in the global market.

PEST Analysis

Political: The regulations for emission control and safety standards set by governments across regions will influence the demand for all-wheel drive vehicles. Stricter norms will boost adoption.

Economic: A rise in disposable incomes and preference for leisure vehicles possessing all-wheel capability will support market expansion during the forecast period. Higher GDP growth and spending capability of consumers act as growth lever.

Social: Growing demand for luxury, off-road and recreational vehicles that offer all-wheel drive propagation will fuel market gains. Consumers seek efficient and safer modes of private transportation.

Technological: Automakers focus on introducing lightweight all-wheel drive systems with lower fuel consumption. Advanced traction control and torque vectoring allow precise power distribution. Electronics assist intelligent handling even in challenging terrains and weather conditions.

The all-wheel drive market in terms of value is majorly concentrated in North America and Europe. North America, being an early technology adopter, accounted for the largest market share in 2024 owing to higher preference for SUVs and crossover vehicles that offer an enhanced driving experience in various weather conditions. Europe stands as the second largest regional market driven by demand from Germany, United Kingdom, and France.

The Asia Pacific region is poised to be the fastest growing market for all-wheel drive during the forecast period. Factors such as increasing sales of luxury and premium vehicles along with supportive infrastructural development are pushing the demand higher in countries such as China, Japan, and South Korea. Country-wise, China holds maximum future growth potential attributed to rising per capita income and accelerating sales of passenger and commercial vehicles.

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