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An automotive transmission system is a complex mechanism that facilitates the efficient transfer of power from the engine to wheels. It allows the vehicle to move forward and backward while optimizing fuel economy and drivability. A transmission system consists of gears, shafts, and fluid couplings that shift automatically or manually depending on the gear selection. It helps regulate the RPM of the engine by allowing it to run within its optimal power band. The growing demand for fuel-efficient and comfortable driving experiences is driving the automotive transmission systems market globally.
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. Transmission systems enhance fuel efficiency by allowing engines to run at ideal speeds for different driving conditions. They reduce dependency on expensive and polluting fuels. Manual transmission provides control but automatic transmissions offer comfort and help reduce driver fatigue on longer journeys. This increasing need for optimal power delivery, comfort, and emission control is expected to boost the adoption of newer transmission technologies in the coming years.
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 is one of the leading automotive transmission system manufacturers globally, offering 8-speed and 6-speed transmissions.
The growing demand for fuel-efficient vehicles equipped with advanced automatic transmissions is expected to drive the market during the forecast period. Stringent emission norms aimed at curbing pollution are compelling automakers to adopt more efficient automatic transmissions over conventional manual transmissions.
The market is witnessing increased globalization with key players expanding their manufacturing footprint in developing nations to leverage low labor costs and cater to the growing regional demand. For instance, in 2022, BorgWarner announced plans to invest over US$ 80 million to set up a new transmission system manufacturing plant in India.
Market key trends
One of the key trends in the automotive transmission systems market is the rising adoption of continuously variable transmissions (CVT). CVT provides infinite gear ratios between maximum and minimum to optimize engine RPM for any given speed. This enhances fuel efficiency substantially. Major automakers are increasingly integrating CVT in gasoline-run passenger cars to meet stringent emission targets. The development of dual-clutch transmissions (DCT) that offer the quick shifts of a manual with the convenience of an automatic is another trend expected to surge in the next five years.
Porter’s Analysis
Threat of new entrants: The automotive transmission systems market requires large capital investments in R&D and manufacturing facilities which act as entry barriers for new players.
Bargaining power of buyers: Automotive OEMs are large buyers in this market however individual buyers have limited influence due to availability of alternates.
Bargaining power of suppliers: A few large suppliers exist for specialized components requiring long-term agreements and specialized investments reducing their bargaining power.
Threat of new substitutes: No direct substitutes exist for transmission systems however electric vehicles pose a long-term threat of replacement.
Competitive rivalry: The market is highly competitive with focus on new technologies, integrated solutions and expansion into lucrative global markets.
Geographical Regions
Asia Pacific accounts for the largest share of the global automotive transmission systems market due to presence of major automotive markets like China and India. Growing vehicle production and sales along with focus on fuel-efficient technologies will continue to drive the region’s market.
North America is the fastest growing region for automotive transmission systems market led by the US. Government mandates regarding fuel-economy along with consumer demand for performance and efficiency are propelling transmission technology advancements in the region.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
