Automotive Drivetrain Market by Application, Vehicle Type and Geography - Forecast and Analysis 2023-2027

Automotive Drivetrain Market Forecast 2023-2027

The automotive drivetrain market size is estimated to increase by USD 68.89 billion and grow at a CAGR of 5.89% between 2022 and 2027. The growth of the market depends on several factors including an increase in demand for commercial vehicles, increasing demand for passenger cars, and increasing demand for comfort and safety for vehicles.  Notably, developed markets in North America are experiencing a notable rise in sales, particularly for versatile vehicles like pickup trucks, prized for their utility in various commercial applications. Concurrently, in the Asia-Pacific region, improving socioeconomic conditions and infrastructural developments are stimulating demand for commercial vehicles, spanning from medium to heavy-duty trucks, to cater to diverse industries such as logistics and construction. This growing demand underscores the critical role of advanced drivetrain systems in enhancing efficiency and performance across both electric and gasoline-powered vehicles. These systems play a pivotal role in addressing environmental concerns like carbon dioxide emissions while meeting the diverse requirements of smart mobility services.

What will be the size of the Automotive Drivetrain Market During the Forecast Period?

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Segmentation

This market report extensively covers market segmentation by application (forward wheel drive, rear wheel drive, and all wheel drive), vehicle type (passenger car and commercial vehicle), and geography (APAC, Europe, North America, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

By Application

The forward wheel drive segment is estimated to witness significant growth during the forecast period. A front-wheel drive car transfers engine power exclusively to the front wheels. Front-wheel drive is lighter than rear- or four-wheel drive. This lighter weight results in better fuel efficiency. Growing demand for sport utility vehicles (SUVs) and crossovers will benefit from the adoption of front-wheel drive.

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The forward wheel drive segment was the largest segment and was valued at USD 89.66 billion in 2017. Most SUVs are equipped with solid off-road capabilities and heavy-duty suspension that provide consumers with optimal comfort even on difficult terrain. Front-wheel drive for cars is offered by automakers on SUVs and crossovers as standard or optional equipment, with implementations varying by car manufacturer, model, and geographical area. Thus, such front-wheel drive applications will drive the segment during the forecast period. 

By Regions

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APAC is estimated to contribute 53% 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. Countries such as China, Japan, Korea, and India have a strong demand for commercial vehicles, which is contributing to the growth of the market in APAC. Besides, developed auto markets such as Japan, Korea, and Australia are the leading auto export markets in APAC.

Moreover, factors such as low wages, easily available materials and human resources, and related transportation services, as well as a low value of the local currency, are driving the automotive transmission industry in countries such as China and India. The passenger car segment in the region is expected to grow at a rapid pace, in line with the developing economies of China and India. An increase in a customer's disposable income leads to an increase in car ownership. As a result, the increasing production and sales of passenger cars in APAC will increase demand for the market in the region during the forecast period. 

Market Dynamics and Customer Landscape

The market is witnessing substantial growth, driven by the rapid evolution of electric cars and advancements in vehicle control and drivetrain systems. With a focus on reducing carbon dioxide emissions and addressing environmental issues, automotive manufacturers are investing heavily in innovative battery technology and efficient electric vehicle drivetrains. Technologies like AXE series e-axle and in-wheel hub drives are revolutionizing the automotive landscape, enhancing power electronics and ignition control for optimal performance. As the shift towards electric vehicles accelerates, the market sees a surge in demand for smart mobility services and luxury comfort features, reshaping the automotive industry and promoting sustainable transportation solutions. 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.

Key Market Driver

The market is experiencing robust growth, fueled by the surging demand for commercial vehicles globally. Developed markets in North America witnessed a significant uptick in sales, particularly of vehicles like pickup trucks, driven by their utility in commercial applications. Meanwhile, in APAC, improving socioeconomic conditions and infrastructure spur demand for commercial vehicles, including medium and heavy-duty trucks, supporting various industries like logistics and construction. This growing demand underscores the importance of advanced drivetrain systems in ensuring efficiency and performance in electric and gasoline-powered vehicles, addressing environmental concerns such as carbon dioxide emissions while meeting the diverse needs of smart mobility services. 

Significant Market Trends

Increasing demand for luxury vehicles is the primary trend in the market. Sales of high-performance luxury vehicles are expected to increase, with customer preference indicating a shift. Customer preferences for premium comfort and incentivizing functionality in vehicles will determine the design language of the market for the next decade. The SUV is designed for off-roading and has excellent traction control in a variety of terrains. An off-road vehicle can suffer severe road shock.

Furthermore, the demand for luxury vehicles is increasing in emerging markets such as China and India due to stable economic conditions and rising disposable incomes of consumers. Consumers in these countries are willing to spend money on luxury cars with premium safety and comfort features. The growing demand for high-end vehicles, such as luxury cars, will further increase the demand. Hence, the growing demand for luxury vehicles will fuel the growth of the market during the forecast period. 

Major Market Challenge

Uncertainty in the automotive industry is the challenge that affects the growth of the market. Automakers around the world have been closing their production units as the COVID-19 pandemic has severely impacted the industry, especially during 2020 and early 2021. Furthermore, the lack of customers attending auto showrooms due to the implementation of strict containment measures has resulted in the closure of auto manufacturing units around the world.

Moreover, the automotive industry suffered many negative effects during the Russia-Ukrainian war. Due to the war, automakers in many parts of the world were unable to source spare parts from Russia and Ukraine. Rising energy prices and the unavailability of key components such as semiconductors used in car manufacturing are hampering vehicle production. Hence, these challenges are expected to impede the growth of the market during the forecast period. 

Market Customer Landscape

The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market Customer Landscape

Who are the Major Automotive Drivetrain Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

• ZF Friedrichshafen AG: The company offers automotive drivetrains such as ADM 2 automatic drive train management and modular drive system for off road vehicles.

The research report also includes detailed analyses of the competitive landscape of the market and information about 12 market companies, including:

• American Axle and Manufacturing Holdings Inc.
• BorgWarner Inc.
• Continental AG
• Dana Inc.
• JTEKT Corp.
• Magna International Inc.
• Melrose Industries Plc
• Mitsubishi Corp
• Nidec Corp.
• Robert Bosch GmbH
• Schaeffler AG

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.

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Application Outlook 
  • Forward wheel drive
  • Rear wheel drive
  • All wheel drive

• Vehicle Type Outlook 
  • Passenger car
  • Commercial vehicle

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • APAC
    • Chile 
    • Brazil 
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview

The market is witnessing dynamic growth, propelled by the rapid adoption of electric cars and the evolution of vehicle control and drivetrain systems. Advancements in battery technology and the emergence of electric taxis address environmental issues by reducing carbon dioxide emissions and promoting sustainable transportation solutions. Key innovations such as the AXE series e-axle and in-wheel hub drives revolutionize the automotive landscape, while power electronics and electric motors optimize electric vehicle performance. With a focus on EV infrastructure and government tax breaks, the market caters to diverse segments, including cargo rail, air transport, and truck-based SUVs. As hybrid and electronic automobiles gain traction alongside smart mobility services, automotive drivetrain manufacturers and OEMs adapt to meet evolving consumer demands for luxury comfort features and low carbon footprint vehicles.

Also, the market is experiencing significant evolution driven by the rapid rise of electric vehicles (EVs) and the increasing demand for environmental cause solutions. Drivetrain components like axles, driveshafts, and constant velocity (CV) joints play pivotal roles in electric vehicle drivetrain systems, catering to the needs of e-car manufacturers and motorcycle & e-mobility drivetrain manufacturers alike. With a focus on emission regulations and environmental sustainability, the market witnesses a surge in e-drive component manufacturers and integrated drivetrain systems, catering to diverse segments, including sports vehicles, luxury comfort features vehicles and heavy-duty vocational vehicles. As autonomous vehicle technologies and fuel cell drivetrains gain momentum, the Automotive Drivetrain Market anticipates substantial growth in the coming years.

The electric vehicle drivetrain system is at the core of EVs (Electric Vehicles), incorporating components such as the electric motor, cooling system, and driveshaft. In sea transport, front wheel drive (FWD), rear wheel drive (RWD), and all-wheel drive (AWD) configurations are utilized, each relying on driveshafts and constant velocity joints (CV joints) or universal joints (U joints) to transmit power. These systems contribute to minimizing carbon dioxide emissions, especially when integrated into an integrated drivetrain system. Whether it's front wheel drive (FWD), rear wheel drive (RWD), or all-wheel drive (AWD), the drivetrain plays a crucial role in propelling vehicles forward while efficiently managing power distribution.

Hexagon's contributions to drivetrain technologies are particularly notable, with advancements in both front-wheel drive (FWD) and rear-wheel drive (RWD) configurations. Whether it's high-performance vehicles or eco-friendly e-cars, Hexagon's drivetrain solutions, including constant velocity joints (CV joints), ensure optimal power delivery and vehicle dynamics for a superior driving experience. As the automotive industry continues to evolve, Hexagon remains at the forefront of innovation, driving the transition towards electric and sustainable transportation solutions. With a commitment to excellence and a focus on performance, safety, and sustainability, Hexagon is shaping the future of mobility, one breakthrough at a time.

Automotive Drivetrain Market Scope
Report Coverage	Details
Page number	159
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 5.89%
Market growth 2023-2027	USD 68.89 billion
Market structure	Concentrated
YoY growth 2022-2023(%)	5.57
Regional analysis	APAC, Europe, North America, South America, and Middle East and Africa
Performing market contribution	APAC at 53%
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., BorgWarner Inc., Continental AG, Dana Inc., JTEKT Corp., Magna International Inc., Melrose Industries Plc, Mitsubishi Corp, Nidec Corp., Robert Bosch GmbH, Schaeffler AG, and ZF Friedrichshafen AG
Market dynamics	Parent market analysis, Market forecasting, 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.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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