The automotive transmission system is an integral component that transmits the power from an engine to the wheels. It consists of mechanisms like gearboxes, drive shafts, differentials and axles. These systems play an important role in determining a vehicle's performance, as they help select appropriate gear ratios for optimal acceleration and speed. Manual transmission systems rely on clutch plates and gear shifts, while automatic transmission systems use hydraulic pressure and torque converters for smooth gear changes without interrupting traction. Demand for Automotive transmission systems is rising due to traffic congestion in cities and consumer preference for convenience.

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 2023 to 2030.

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 player providing a broad product portfolio of manual and automatic transmissions.

The growing demand for vehicles across the world owing to increasing per capita income and changing lifestyle is fuelling the automotive transmission systems market. Asia Pacific region especially India and China are witnessing high vehicle production due to large population and rapid urbanization which is driving the need for transmission systems.

Leading transmission system manufacturers are expanding their global footprint to cater to the rising demand. For instance, in 2022, BorgWarner inaugurated a new production facility in India to support increasing transmission system requirements from domestic automakers. The company also plans to invest over USD 110 million in its European manufacturing and product development by 2025.

Market Drivers

Strict emission regulations forcing automakers to enhance fuel efficiency of vehicles is a key factor propelling the demand for advanced automatic transmission systems. Compared to manual transmissions, automatic transmissions help improve fuel economy by enabling optimum gear shifts based on engine load and speed. The technology is evolving with innovations such as nine-speed and ten-speed transmissions focused on low-cost and compact design for mass adoption. This, along with increasing vehicle production globally, is expected to drive the automotive transmission systems market during the forecast period.

The current geopolitical situation is impacting the growth of the automotive transmission systems market. The ongoing Russia-Ukraine conflict has disrupted supply chains and increased raw material costs. Both Russia and Ukraine are major suppliers of key transmission components like steel and palladium. Constraints in their supply have stressed manufacturers' operations and margins. Rising energy costs too have inflated production expenses.

The conflict has also stalled European economic activity, dampening automotive demand in the critical region. Most automakers had to suspend operations at their plants in Ukraine. Exports from other Eastern European nations have been disrupted due to infrastructure damage and sanctions. Manufacturers must localize their supply chains and seek alternative material sources to minimize risks from future geopolitical events. Diversifying manufacturing footprints across regions can boost resilience against localized disruptions.

North America accounts for the largest share of the global automotive transmission systems market in terms of value. The region has strong production volumes led by the US, where transmission system makers extensively cater to domestic sales as well as exports. Europe is another major regional market, driven by the presence of leading German automakers and their supplier base. However, the ongoing conflict has weakened near-term growth prospects in Europe.

Meanwhile, the Asia Pacific region is emerging as the fastest growing market for Automotive transmission systems. Rapid motorization across developing economies like China and India is propelling transmission demand. Local production is increasing to fulfill rising in-country needs as well as cater to worldwide automotive exports from Asia. Manufacturers are investing significantly in the region to develop transmissions tailored for commercial and passenger electric vehicles.

About Author:

Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials,  etc

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it