Automotive Transmission Market Size to Hit USD 259.88 Bn By 2032

The global automotive transmission market size is expected to hit USD 259.88 billion by 2032 from USD 150 billion in 2022 with a registered CAGR of 5.70% from 2023 to 2032.

Automotive Transmission Market Size 2023 to 2032

The automotive transmission market’s growth is proportional to the growth of the automotive sector because it is used in every vehicle. The demand for automotive transmission systems is expected to increase as global automotive production increases. By transferring the optimal power from the engine to the wheels through the gearbox, the automotive transmission system ensures a smooth and comfortable ride.

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The automotive transmission systems are widely combined with the electric vehicles, passenger vehicles, light weight commercial vehicles, and heavy weight commercial vehicles. The wide range of automotive transmission systems are used to make driving experience of passengers more comfortable, which will increase demand for such systems in coming future.

The rising commercial vehicle demand in the Asia Pacific region is also a major driver for the global automotive transmission system. Furthermore, North America and Europe are major markets for luxury cars and sports cars, and are expected to grow at a steady rate during the forecast period. Aftermarket transmission system demand is high in North America and Europe, which may have a positive impact on the global automotive transmission market.

Market Dynamics

Drivers

Surge in demand for automatic automotive transmission system

The automotive transmission system is used to increase the comfort level of the vehicles for smooth and easy driving. Due to surge in road traffic, the road accident numbers have increased over the period of time. This has created strong emphasis in the installation of automotive transmission systems in the vehicles. The key market players have started utilizing electric engines in the vehicles for increasing efficiency of the automobiles. Thus, the surge in demand for automatic automotive transmission system is driving the growth of market during the forecast period.

Restraints

Increasing adoption of electric vehicles

The automobile industry is transitioning from traditional gasoline vehicles to electric vehicles all around the world. When compared to traditional fuels burning within internal combustion (IC) engines, an electric vehicle does not require gears because the electric engine generates more force at zero revolutions per minute (RPMs). The electric engine generates a magnetic field that causes the engine to pivot, which in turn moves the electric vehicle’s steering wheel. As a result, clutch mechanism may not be necessary in any electric vehicle. Thus, the increasing adoption of electric vehicles is restricting the growth of automotive transmission market during the forecast period.

Opportunities

Rising adoption of automatic manual transmission systems (AMT) in commercial vehicles

The rising urbanization, industrialization, and better road infrastructure are paving way for the growth of logistics business globally. In addition, the rise of commercial vehicles is aided by the evolution of Information Technology (IT) sector and the industries such as mining and construction. The automatic manual transmission (AMT) system can be combined with dual-clutch transmission (DCT) system in commercial vehicles. Thus, the rising adoption of automatic manual transmission (AMT) system in commercial vehicles will create lucrative opportunities for the growth of automotive transmission market during the forecast period.

Challenges

Economic slowdown

Recession is another term for economic slowdown. Every business sector is affected by the recession. Companies suffer massive losses during this time. Companies lay off employees and workers in order to recoup losses or reduce costs. The market suffers as a result of this. Consumer purchasing power is dwindling. To reduce costs, day-to-day operations have been halted. Economic slowdown has an impact on developing or underdeveloped countries. As a result of the economic slowdown in various countries, the expansion of the automotive transmission market faces significant challenges.

Regional Snapshot

Asia-Pacific is the largest segment for automotive transmission market in terms of region. The increasing penetration of electrified transmission systems due to increased focus on hybrid vehicles and major impact on fuel emissions and economy are the factors contributing for the growth of Asia-Pacific automotive transmission market during the forecast period.

North America region is the fastest growing region in the automotive transmission market. Automotive transmission market has lot of prospects in North America region with increased use of heavy commercial vehicles. The vehicles have transformed their engines from semi-automatic engine to fully automatic engines. The integration of sub-modules and peripheral parts into automotive transmission systems has resulted in more compact, light, and reliable combinations.