The report “Automotive Transmission Market by Transmission Type (Manual Transmission, Automatic Transmission, CVT, DCT, AMT), Fuel Type, Vehicle Type, Hybrid Vehicle, Two-Wheeler Transmission, Number of Forward Gears and Region – Global Forecast to 2027″, is projected to reach USD 80.8 billion by 2027 from USD 59.9 billion in 2022, at a CAGR of 6.2% during the forecast period. Technological advancements in current generation automotive transmissions, Increasing customer preference for convenience, premium transmissions are further expected to drive the automotive transmission market. Overall, the changing preferences of buyers, improved standards of living, and focus of OEMs to provide comfort and convenience are also expected to drive the growth of the automotive transmission market.
Market Dynamics:
Driver: Growing demand for light weight transmission systems
The introduction of government regulations for safety, carbon emission, and lightweight vehicles is forcing OEMs to use components that will help in an overall weight reduction of the vehicle. There is constant pressure on OEMs to reduce emission levels of the automobiles. Globally, consumers in developed countries, are more inclined towards purchasing modern fuel-efficient, eco-friendly cars with reduced emission levels and enhanced performance. The permissible NOx emissions from a diesel vehicle have dipped ten times through six legislations (Euro 1 to Euro 6), And new emission norms are under development that will be known as Euro 7 likely to be introduced by 2025. Lightweight cars are capable of meeting these requirements. Manufacturers are majorly focusing on weight reduction of various parts of the automobile to further reduce the weight of the entire vehicle.
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Opportunity: Increasing adoption of automatic transmissions and development of hybrid drives
The popularity of automatic cars is on the rise due to the wide adoption of AMT. Better fuel efficiency, worsening traffic conditions, and gradual dispelling of misconceptions about automatic cars have contributed to this trend. Automatic transmission delivers gentle and smooth gear changes, and reduced fuel consumption is delivering additional driving comfort. As drivers can concentrate more on the road and less on driving, automatic transmission is a safer option than manual transmission.
Increasing number of electric and hybrid vehicles is also expected to occupy big share of the manual transmission market. Developments in hybrid automatic transmission technologies to achieve top performances may further erode market share. For instance, in 2019, ZF Friedrichshafen AG designed its new generation 8-speed automatic transmission for hybrid drives. This hybrid system enables mild, full, and plug-in hybrid drives to achieve top performances between 24 kW and 160 kW. ZF will begin manufacturing this 8-speed automatic transmission in Saarbrücken, Germany, by 2022, and launch it in China and the US thereafter.
Challenge: Reduction in costs for light weight and efficient transmissions
The dilemma faced by the automotive industry is between technological innovation and cost reduction. Vehicle weight is inversely proportional to the fuel economy of the vehicle. Many OEMs are currently focusing on the overall weight reduction of their vehicle models in order to achieve the targets set in the coming years. Huge fluctuations in raw materials prices could make the market less competitive. Weight reducing alloys and lightweight materials are expensive but are useful in manufacturing efficient and lightweight transmissions. Lightweight transmission systems proportionately reduce the weight of the automobile which ensure that the vehicle complies with the stringent emission and fuel efficiency norms. However, these weight reducing alloys and lightweight materials are expensive in nature which further increases the cost of manufacturing of lightweight and efficient transmission systems. Along with this, this high price fluctuation can also account for quality deviation that can adversely affect the automotive transmission market all over the world. The challenge therefore is to come up with such transmissions that are efficient and economical at the same time.
Key Market Players
ZF Friedrichshafen (Germany), MAGNA International (Canada), Aisin Corporation (Japan), Eaton Corporation(Japan), Hyundai Transys(South Korea), Allison transmissions(US), Vitesco Technologies(Germany), Schaeffler AG(Germany), BorgWarner(US), GKN Automotive(UK), and Jatco (Japan) and more.
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