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The global automotive differential gear market size is estimated to grow by USD 5.65 billion at CAGR of 4.36% between 2023 and 2028. The market's growth is influenced by several factors, including the uptick in SUV sales, the growing consumer preference for all-wheel drive (AWD) and front-wheel drive (FWD) vehicles, and the rising demand for luxury vehicles. These trends reflect shifting consumer preferences toward larger, more versatile vehicles with enhanced performance and comfort features. Additionally, the market's growth is bolstered by the increasing availability of SUV models from various manufacturers, catering to a wide range of consumer preferences. The rise in consumer purchasing power, especially in emerging markets, has contributed to the increasing sales of SUVs and luxury vehicles. Furthermore, advancements in technology and design have made SUVs more appealing to a broader audience, further driving their popularity and market growth.
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The market share growth by the aftermarket segment will be significant during the forecast period. Aftermarket includes replacements, collisions, looks, and performance parts. The aftermarket offers a wide range of parts of varying quality and price for almost all vehicles and models.
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The aftermarket segment was valued at USD 10.97 billion in 2018. The automotive aftermarket is a secondary submarket that includes the manufacturing, reproduction, distribution, retailing, and installation of all vehicle parts, chemicals, equipment, and accessories after the OEM has sold the car to the consumer.
APAC is estimated to contribute 67% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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Improved and stabilized socioeconomic conditions in APAC countries, especially China and India, are contributing to the growth of the regional automotive industry. A large consumer base, increasing per capita income, and the ease of availing of auto financing services have been fueling the demand for passenger and commercial vehicles in the region. Apart from the rising demand for e-commerce logistics, the expansive construction sector and the expanding mining industry are the major factors driving the demand for commercial vehicles in the region.
The market is vital for various vehicle types, including premium SUVs, sedans, heavy-duty engines, and commercial vehicles. It encompasses components such as traction motors, electric compressors, and power electronics, essential for vehicle performance. Differentials like Electronic Limited Slip Differential (ELSD) and Torque Vectoring Differential play a crucial role in front-wheel drive and rear-wheel drive vehicles, improving traction and handling. As the demand for electric vehicles rises, the market for electric motors and batteries used in differentials is growing. Manufacturers are focusing on innovative solutions to enhance the efficiency and performance of trucks and buses, including advanced epicyclic trains and locking differentials. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The increase in sales of SUVs is one of the key factors driving the market growth. The demand for SUVs is being driven by various factors, including the introduction of compact and mini-SUVs, the decreased cost of SUVs, and improved comfort and higher safety in new-generation SUVs. Additionally, there is interest in electric motors, electric compressors, batteries, sedans, and premium SUVs in the automotive market. For instance, in the 2021 fiscal year, SUVs accounted for about 45% of global vehicle sales, 35 million units more than the sales in 2020. Higher seating capacity resulting in a relatively higher weight of SUVs demands adequate power delivery to each wheel for safe and effective driving.
Thus, manufacturers prefer differential gears that deliver adequate power distribution to each wheel. Gear arrangement in differentials varies with the type, make, and application of the SUV. Thus, all these factors of SUVs will drive the market growth during the forecast period.
The development of hub motors is one of the key market trends propelling the market growth. A wheel hub motor is an advanced solution for powering EVs. It is an electric motor directly installed in the vehicle wheel to power the vehicle. A hub motor directly drives the vehicle wheel and eliminates the need for a gearbox, differential, and other power transmission components. Thus, it directly reduces vehicle weight and enhances vehicle efficiency. A decrease in the speed of automobiles with hub motors, an increase in the unsprung weight of the vehicle leading to reduced vehicle stability, and complexities with harness designing are hampering the adoption of hub motors in vehicles.
Hub motors are not yet fitted in any commercially available vehicle. Several vehicle manufacturers, such as Protean Electric and GM, are working on the development of vehicles featuring wheel hub motors. This may result in the development of technologically advanced wheel hub motors in the future. Such a need to develop hub motors may propel the automotive differential gear market growth during the market forecast period.
Product recall is one of the factors hampering the market growth. The integration of automatic transmission systems in premium vehicles involves advanced algorithms that contribute to the design and development of such complex systems. Automobilessold in developed automotive markets, such as the US, use advanced electronics and sensors that aid in effective cornering. Thus, any issue in or malfunction of even a single drivetrain system component can lead to high repair costs and vehicle recalls.
For instance, in March 2022, Volkswagen AG announced Atlas SUVs were recalled in the US and Canada to address airbags, windows, brakes, and other issues. The leakage was caused by the excessive wear of the differential gears, which led to excessive noise generation and significant loss of torque. The R&D, production, maintenance, and high repair costs of differential gears of recalled vehicles are add-on expenses, which have a severe impact on the financial stability of involved parties and limit the scope of automotive differential gear market forecasting growth.
Companies are implementing various strategies by analyzing factors such as strategic alliances, market growth analysis, partnerships, market research and growth, mergers and acquisitions, market growth and forecasting, geographical expansion, and product or service launches, to enhance their presence in the market.
The report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
American Axle and Manufacturing Holdings Inc., AmTech International, Bharat Gears Ltd., Circle Gear and Machine Company Inc., Dana Inc., Eaton Corp. Plc, FA.TA. Ricambi S.p.A., Gear Motions Inc., GKN Sinter Metals Engineering GmbH, Hitachi Ltd., Linamar Corp., Neapco Holdings LLC, NSK Ltd., Perfect Gears Pvt. Ltd., Polaris Inc., and Shandong Heavy Industry Group Co. Ltd.
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
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The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion " for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The market is crucial for heavy-duty engines and a variety of vehicles, including heavy commercial vehicles, light commercial vehicles, and heavy trucks. These components manage engine power distribution between drive wheels and enable functionalities like Limited Slip Differential (LSD) and Locking Differential, improving traction and control. They are essential for various drivetrain configurations, such as Front Wheel Drive and Rear Wheel Drive, ensuring optimal performance of automotive vehicles, especially in off-road and high-speed curve conditions. As vehicles evolve towards electrification and autonomy, differential gears play a key role in enhancing response time, efficiency, and traction control, contributing to safer and more efficient passenger and commercial vehicles.
Moreover, the market is vital for various vehicles, including Heavy duty engine and Bus, ensuring smooth power distribution to the drive wheels. These gears, part of the epicyclic train within the differential, manage rotation and torque between the shafts and rear axle, crucial for autonomous vehicles. Advancements focus on enhancing braking system, and reducing component size and weight for lighter and quieter operation. This technology benefits multi utility vehicles and off road vehicles with all-wheel-drive, improving traction and control in challenging terrains. As the industry progresses towards autonomous and electric vehicles, differential gears will play a key role in managing slippage and enhancing stability during high-speed curves, ensuring safer and more efficient passenger and commercial vehicles.
Market Scope |
|
Report Coverage |
Details |
Page number |
174 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.36% |
Market growth 2024-2028 |
USD 5.65 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
4.11 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 67% |
Key countries |
US, China, Japan, India, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
American Axle and Manufacturing Holdings Inc., AmTech International, Bharat Gears Ltd., Circle Gear and Machine Company Inc., Dana Inc., Eaton Corp. Plc, FA.TA. Ricambi S.p.A., Gear Motions Inc., GKN Sinter Metals Engineering GmbH, Hitachi Ltd., Linamar Corp., Neapco Holdings LLC, NSK Ltd., Perfect Gears Pvt. Ltd., Polaris Inc., and Shandong Heavy Industry Group Co. Ltd. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Channel
7 Market Segmentation by Vehicle Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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