The Global Automotive Axle and Propeller Shaft Market size is projected to grow at a CAGR of 3.2% during the 2020-2025 forecast period, acquiring a market size to reach USD 25.4 billion by 2025 from USD 21.7 billion in 2020.
The market is mainly driven by the growing adoption of AWD vehicles, increasing vehicle production, as well as engineering advancements necessitated by automotive OEM’s.
The majority of the automobiles use steel alloy for propeller shafts and axles. However, due to the increasing stringency of fuel-efficiency regulations, suppliers are focusing on implementing lightweight materials in their products; without compromising on strength. The use of aluminum and carbon fiber has been limited in these components due to the higher cost. With the increasing demand for fuel-efficiency, lightweight materials are expected to witness rising adoption in the automotive industry. However, in the present market scenario, the rising demand for premium passenger cars and light-duty vehicles would also become a growth opportunity for the players, which manufactures axles and propeller shaft made up of lightweight materials.
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Some of the key players in the automotive axle and propeller shaft market are ZF Friedrichshafen AG (Germany), Dana Incorporated (US), GKN PLC (UK), American Axle & Manufacturing, Inc. (US), Meritor, Inc. (U.S.), Showa Corporation (Japan), Hyundai Wia Corporation (South Korea), JTEKT Corporation (Japan), and GKN plc (UK).
The global demand for commercial vehicles has shown significant growth in recent years. According to OICA statistics, commercial vehicle sales had increased from 23 million units in 2014 to 27 million units in 2019. The growth can be attributed to factors such as increasing infrastructure spending, rising import-export trade, and growing e-commerce activities. Most of the heavy trucks and semi-trailers in Europe and North America are equipped with more than two live axles and tandem axles. Thus, rising commercial vehicle sales have further fueled the demand for axles in the coming years.
The global automotive axle and propeller market have also been witnessing growth, as these components are integral to vehicle. Innovation in these components would continue, given the growing need for improvement in fuel efficiency by lowering weight and technological advancements related to higher torque delivery guided by step-wise innovation introduced by large Tier I suppliers. This modernization would be driven by the need for new products by OEMs that are continually striving to improve fuel-efficiency and minimize energy losses. Owing to engineering advancements and increasing commercialization, the multi-piece propeller shaft market is projected to gain significant traction in the coming years.
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Growing adoption of advanced technologies and strategic developments and R&D activities will enable global as well as regional manufacturers, such as ZF Friedrichshafen, American Axle & Manufacturing Inc, Dana Incorporated, GKN Automotive, and Showa Corporation to gain business opportunities from existing as well as untapped markets in the automotive axle and propeller shaft market.
- In February 2020, Dana Launched the production of the Spicer Electrified eS9000r e-Axle for class 4 and class 5 commercial vehicles in North America and is the only supplier to manufacture all components in a system such as an axle, motor, gear, and invertor.
- In January 2020, GKN Automotive and Delta Electronics Inc. announced their collaboration on the joint development that is expected to enable the rapid acceleration of next-generation integrated 3-in-1 eDrive systems of power classes from 80kW to 155kW. The joint development of advanced eDrive technology is expected to see inverters supplied by Delta Electronics Inc. integrated with GKN Automotive’s eMotor and gearbox systems in a 3-in-1 solution.
- In May 2019, Meritor announced plans to acquire AxleTech for approximately USD 175 million. The addition of AxleTech will enhance Meritor’s growth platform, bringing a highly complementary global product portfolio across the off-highway, defense, specialty, and aftermarket segments. AxleTech’s offerings include a full product line of independent suspensions, axles, braking solutions, and drivetrain components. These capabilities will enable Meritor to offer global customers a more comprehensive array of differentiated products and solutions while further diversifying the company’s portfolio.
- In February 2019, ZF’s AxTrax AVE electric portal axle was awarded the 2019 EBUS Award in the category “Drives for Battery Buses.” AxTrax AVE electric portal axle makes it easier for bus manufacturers and public transport authorities to switch over to quiet, zero local emission drives. This driven axle can be operated by all-electric not only by battery or overhead lines but also in hybrid or fuel cell configurations. The flexibility in configuration options and the selection of energy source makes it the ideal solution for almost any urban environment.
- In April 2018, American Axle Manufacturing (AAM) and Liuzhou Wuling Automobile Industry Co. Ltd., a subsidiary of Guangxi Automobile Group Co., Ltd., entered into a joint venture agreement to manufacture driveline systems. Liuzhou AAM plans to provide both conventional and electric drive axles in China. Independent rear axles and drive heads by Liuzhou AAM will meet the needs of the fast-growing segments of multi-purpose vehicles and crossovers, including vans, minivans, and sport utility vehicles.
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Covid-19 Impact On Automotive Axle and Propeller Shaft Market:
The automotive axle and propeller shaft market includes major Tier I and II suppliers like ZF, GKN Automotive, Dana Incorporated, Meritor, Automotive axle & manufacturing, and others. These suppliers have their manufacturing facilities spread across various countries across the Asia Pacific, Europe, North America, South America, and Middle East & Africa. COVID-19 has impacted all of its businesses globally; these players have announced a temporary shutdown of production due to lockdown and also to protect the safety of their employees, which basically created lowered demand and supply chain disruptions in US, France, Germany, Italy, and Spain during the COVID-19 pandemic. As a result, the demand for overall automotive production has decline, which directly affects the automotive axle and propeller shaft market in 2020. Going forward, manufacturers are likely to adjust production to prevent bottlenecks and plan production according to demand from OEMs and tier 1 manufacturers.
Major OEM manufacturers lost revenues in Q1 and Q2 2020, in Q3 2020. Vehicle production is likely to resume, however, not at full capacity due to the severity of the pandemic, due to which, especially in the US and major European countries, tier 1 players suspect a further decline in revenue in the remaining quarters of 2020.