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The Automotive Four-Wheel Drive Vehicle Market size is forecast to increase by USD 82.3 billion, at a CAGR of 3.61% between 2023 and 2028. Multiple advantages associated with the four-wheel drive system is driving the market growth, however operational issues and high maintenance costs might impede the market growth. The market is witnessing substantial growth driven by an increasing focus on vehicle safety and stability. Component suppliers are crucial in the development of manual AWD, propeller shaft, and final drive systems, crucial for power transfer in battery electric vehicles and luxury vehicles. In response to stringent emission regulations and the imperative to reduce road accidents, the automotive industry is adopting advanced technologies. All-wheel drive systems, including rear-wheel drive and front-wheel drive systems, play a crucial role in enhancing vehicle safety
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The market is witnessing significant growth driven by advancements in technological developments and emissions standards. A Pestle analysis reveals both opportunities and challenges, influencing patent filings and vendor analysis. Key trends include the shift towards electric vehicles and the integration of vehicle connectivity. Passenger vehicles are designed to provide comfort, safety, and efficiency for everyday transportation, incorporating advanced technologies and features to meet diverse consumer needs and enhance the overall driving experience. The current market scenario highlights the demand for efficiency and sustainability, highlighting the role of electric vehicles in shaping the overall market trajectory. Our researchers analyzed the data with 2023 as the base year and the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Various advantages associated with the four-wheel drive system are driving the market growth. Slippery roads are a leading cause of road crashes, with over 73% of collisions occurring under such conditions. This system helps reduce the probability of a vehicle losing control on slippery roads by allowing all four wheels to have the maximum traction. An AWD system engages all wheels full-time, providing superior driving dynamics and comfort while traversing through different terrains.
Furthermore, an I-AWD system is an advanced form of four-wheel drive, used in luxury SUVs and sedans. It collects information through sensors and adjusts torque to the wheel before losing traction, offering a higher level of safety and convenience. A four-wheel drive system improves off-road capability and performance, maintains traction on rough terrains, and improves the vehicle's safety level and dynamics, driving the growth of the global market.
Replacement of drive shafts and mechanical differentials with electric drive axles is a major trend in the market. Automotive OEMs are replacing heavy mechanical parts with electrical and electronic components to meet fuel economy regulations such as the CAFE standards. Four-wheel drive SUVs are estimated to reduce fuel economy by almost one mpg.
Furthermore, a mobile application provides users with convenient access to a wide range of services and features directly from their smartphones, enhancing functionality and engagement through intuitive interfaces and real-time updates. Axles are mechanical components that transfer torque from the motor to the wheels. Electric drive axles developed by ZF and GKN eliminate the need for heavy propeller shafts in AWD, turning an I-AWD system into a hybrid system, reducing weight, and fuel consumption while being relatively inexpensive to integrate.
Operational issues and high maintenance costs due to poor fuel efficiency are some major challenges in the market. Advancements in automotive technologies have transformed the industry with the introduction of smart and intelligent vehicles. Advanced electronic systems and components are enhancing the driving experience, but industry experts express concern over the durability and reliability of modern systems. Rough use or exceeding permissible limits can result in high mechanical stress on the system, leading to operational issues.
Moreover, maintenance costs increase due to the frequent oil changes and wear and tear of crucial components such as clutch drums, transfer case gaskets, and solenoids. Rust and corrosion can also affect the operability. Four-wheel drive systems consume more fuel, making them less fuel-efficient than two-wheel drive vehicles, with an average of 15%-20% less efficiency. The dimensions and weight of the vehicle and the four-wheel drive system's fitment also affect fuel efficiency. These challenges pose a threat to the growth of the global market.
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The automotive all-wheel drive (AWD) vehicle market share growth by the SUVs and crossovers segment will be significant during the forecast period. Consumer preference in the global SUV and crossover segment has shifted towards compact and small-size SUVs in the last five years. This has led to the introduction of more affordable vehicles in this market by automakers to the SUV market.
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The SUV and crossovers segment showed a gradual increase in the market share with USD 274.70 billion in 2018. SUVs equipped with four-wheel drive systems are gaining popularity, with automakers offering these as standard or optional fitments. The increasing use of four-wheel drive systems in SUVs and crossovers is expected to positively impact the global market during the forecast period.
APAC is estimated to contribute 38% 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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Another region offering significant growth opportunities to companies is North America. The consumer preference for large and big vehicles, such as SUVs and pickup trucks, drives the market growth of vehicles in North America. The US, Canada, and Mexico are the major enablers of this market. Declining gasoline prices per gallon, the growing availability of easy credit, the emergence of new models, and better leasing options have further fueled the SUVs and pickup market in the North American automotive industry. Moreover, consumer preference for vehicles with high ground clearance, off-road capability, and towing capacity are some of the additional factors that fuel the market for SUVs, crossovers, and pickup trucks in North America. This, in turn, boosts the growth of the market in the region.
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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. Some of the major companies in the market include:
Volkswagen AG- The company offers autonomous vehicles such as advanced driver assistance systems.
The report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
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. Furthermore, it is also quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
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 evolving with advancements in electric and hybrid technologies and a focus on vehicle stability and weight reduction. The trend towards smart connectivity and fuel-efficient vehicles is accelerating, driven by the urbanization trend and the demand for premium vehicles. Traction battery packs are essential for hybrid vehicles and plugin hybrid, enhancing torque vectoring AWD and automatic AWD systems. Part-time AWD and full-time AWD configurations cater to diverse terrain demands, influencing downstream manufacturers, wholesalers, and retailers. Car rental services offer flexible transportation solutions by providing a variety of vehicles for short-term use, catering to different customer needs ranging from leisure travel to business trips, and allowing for convenient access to vehicles without the long-term commitment of ownership. The market also sees growth in luxury and premium segments, with factory gate values reflecting the value chain dynamics in emerging economies.
Market Scope |
|
Report Coverage |
Details |
Page number |
177 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 3.61% |
Market growth 2024-2028 |
USD 82.3 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
3.35 |
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 38% |
Key countries |
US, China, Canada, Japan, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Bayerische Motoren Werke AG, BYD Co. Ltd., Ford Motor Co., General Motors Co., Honda Motor Co. Ltd., Hyundai Motor Co., Isuzu Motors Ltd., Mahindra and Mahindra Ltd., Mazda Motor Corp., Mercedes Benz Group AG, MG Motor India Pvt. Ltd., Mitsubishi Motors Corp., Nissan Motor Co. Ltd., Renault SAS, Stellantis NV, Suzuki Motor Corp., Tata Motors Ltd., Toyota Motor Corp., and Volkswagen AG |
Market dynamics |
Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for Market 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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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
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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