Automotive Transmission Market Analysis

Automotive Transmission Market Analysis

The automatic transmission system will be generating more than USD 80 billion revenue by 2026 driven by its advantages over other transmission systems. It is easier to use and more comfortable for drivers compared to manual transmission. Regions, such as North America and Europe, will generate major demand for automatic transmission compared to other regions as it is more expensive. On the other hand, Asian and Latin American countries are expected to see more demand for manual transmission due to low cost.

Automotive transmission market size for electric & hybrid vehicles was over USD 4 billion in 2019 and is projected to observe growth of 15% through 2026. Electric vehicles demand is likely to grow at a very high CAGR during 2020-2026. With new evolving manufacturing technologies, the cost of production will reduce further in future, which will contribute to the increasing demand for electric vehicles. Hybrid and electric vehicles are in the news and in the forefront, every time gasoline increases. Fuel prices are anticipated to grow after reopening the economies, growing fuel prices coupled with increasing environmental concern shall boost the hybrid & electric vehicle demand.
 

Increasing preference for private vehicles due to COVID-19 will accelerate the passenger vehicle demand. Instead of travelling in crowded public transport, people are preferring to buy private vehicles to travel due to safety concerns. Moreover, increasing living standards will have a positive impact on the passenger vehicle demand.
 

5 to 6 gears speed transmission segment accounted for over 30% share in 2019 and is forecast to register 4.4% CAGR between 2020 and 2026. Many cars in Europe and North America, which previously had less than five gears now have 5 to 6 gears. Manufacturers are opting for more speed transmissions/gears owing to fuel economy and performance. Due to increasing environmental regulations, automobile companies are under constant pressure to improve their corporate average fuel economy numbers, greenhouse gas, and carbon numbers, while consumers are demanding better performance.
 

The automotive transmission market is traditionally dominated by OEMs as vehicle owners rarely replace the transmission system. But now many people are preferring to use old vehicles instead of buying new ones due to cash constrains and some due to attachment they have with the vehicle. The after-market share of automotive transmission crossed USD 4 billion in 2019 and is poised to witness 3.5% growth rate up to 2026.
 

The Europe automotive industry spends very high amount on R&D. According to the European Automobile Manufacturers Association, European companies spend around USD 60 billion annually on R&D, which is the highest across the globe. It also accounts for the highest number of patents for self-driving cars for nearly 33% of all applications. These innovations are more customer-centric owing to which European vehicles are known for their class and comfort worldwide have more demand instead of their high cost compared to that of Japanese and Chinese counterparts. Moreover, electric vehicle penetration in the region is growing rapidly from the past few years. The growing demand for electric vehicles will spur the demand for single speed and multi speed transmission in Europe.