The global automotive transmission systems market has witnessed significant growth in the past few decades. Some key factors driving the demand for automotive transmission systems include growing vehicle production and sales, focus on improving vehicle performance and fuel efficiency. Automotive transmission systems help transfer power from the engine to drive wheels by providing gear ratios in manual or automatic transmissions. Manual transmissions allow the driver to select gears manually using a clutch and gearshift, while automatic transmissions offer automated gear changes for convenience. Common transmission systems deployed in vehicles include manual transmission system, automatic transmission system, continuously variable transmission system, dual-clutch transmission system, and automated manual transmission system. CVT and DCT systems are gaining adoption due to their improved fuel efficiency compared to traditional automatic transmissions.

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.

The demand for fuel-efficient and high-performance vehicles has been increasing steadily over the past few years. Transmission systems play a crucial role in improving fuel efficiency and performance of vehicles. Their ability to deliver optimal gear ratios for varied driving conditions is a key factor boosting their adoption.

Leading transmission system manufacturers are expanding their global footprint to capitalize on the growing vehicle production and sales across key automotive markets. They are investing in emerging economies in Asia Pacific and Latin America which are expected to witness high vehicle growth over the coming years.

Market drivers

Stringent emission norms mandated by regulatory bodies across countries is a key factor driving OEMs to focus on improving the fuel efficiency of vehicles. Since transmission systems have a significant influence on fuel consumption levels, adoption of advanced systems like CVT and DCT is growing. Their ability to deliver optimized gear ratios for varied driving speeds enhances fuel efficiency compared to conventional automatic or manual transmissions. This rising focus on reducing vehicular emissions is expected to propel the automotive transmission systems market over the forecast period.

Impact of geopolitical situation on the growth of Automotive Transmission Systems Market

The global Automotive Transmission Systems Market is currently experiencing fluctuations in growth due to the ongoing geopolitical tensions and economic uncertainties across major regions of the world. The ongoing Russia-Ukraine conflict has severely disrupted automotive supply chains and manufacturing operations in Eastern Europe. Prices of raw materials like aluminium, steel, and palladium used in transmission system production have witnessed a significant rise. This has increased production costs for automakers and transmission system manufacturers in the short term. Supply chain issues caused by port closures and sanctions on Russia have also delayed vehicle delivery timelines, impacting sales.

Rising fuel prices and overall inflation have dampened consumer spending power in key markets of North America and Europe in 2022. This can potentially weaken demand for new vehicles and premium transmissions over the forecast period. However, focus towards fuel-efficient automatic transmissions and EVs is expected to support medium term growth. Governments across regions are promoting domestic manufacturing through incentives. Localizing critical component supply will help stabilize production costs and make automakers less dependent on imports amid ongoing geopolitical risks. Adapting manufacturing footprint and supplier networks according to changing trade regulations will be important for long term growth in this dynamic market.

Geographical regions concentrating value in Automotive Transmission Systems Market

The Automotive Transmission Systems Market continues to be dominated by Asia Pacific region in terms of value, accounting for over 40% share globally. China, India, and Japan represent major vehicle producing and exporting nations driving high transmission system demand within APAC. North America follows as the second largest regional market, led by the US. Focus on pickup trucks, SUVs and automatic transmissions has sustained market value growth in the region over the past decade. Europe is currently the third largest market concentrated around Germany, France and UK. However, premium automakers in Europe are aggressively pushing for electrification which may impact demand for conventional transmissions in the long run.

Fastest growing region in Automotive Transmission Systems Market

South America has emerged as the fastest growing regional market for Automotive Transmission Systems globally. After facing economic difficulties and weak automotive sales in recent years, the region is slowly recovering. Governments in Brazil and Mexico are offering Production Linked Incentive schemes to attract investments in domestic auto and auto components manufacturing including transmissions. As South American nations strive for self-reliance in automotive manufacturing, demand for technologically advanced transmissions from local vehicle OEMs is surging at a much faster pace compared to mature markets of North America and Europe. Emerging economies led by Argentina and Colombia are also fuelling overall transmission system demand growth across South America.