Automotive Gears Market Size, Share & Analysis

[290 Pages Report] The global automotive gears market is expected to grow by USD 42.7 billion in 2024 to 50.8 billion in 2030, projected to grow at a CAGR of 3.0% in the forecasted period. The rising global vehicle production is expected to drive the market. The rising demand for SUVs and premium vehicles has increased in developed and developing countries, with increasing disposable income, consumer demand for ride quality, and rising brand awareness. Global vehicle production has risen ~10% in the past four years, from 84.8 million units in 2020 to 93.5 million in 2023. As the market is directly linked to the automotive gears market, vehicle production will drive the growth of automotive gears.

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Market Dynamics

Driver: Rising production of passenger cars and light commercial vehicles.

There has been significant growth in the production of passenger cars and light commercial vehicles in recent years. The production of passenger cars has increased to 68.1 million units in 2023 from 55.9 million units in 2020. The production of light commercial vehicles increased from 16.9 million units in 2020 to 21.4 million units in 2023. Passenger cars lead the transmission gears market because of the multiple transmission options available (manual, automatic, DCT, and AMT) in various gear ratios. Also, passenger cars use non-metallic gears for sunroofs, ORVMs, and power windows, which will drive the automotive gears market for non-metallic gears. Light commercial vehicles lead the market for differential gears as all of these vehicles are rear-wheel drive and are equipped with differentials.

Restraint: Rising popularity of electric vehicles

The shift in consumer preference towards electric vehicles will restrain the automotive gear industry—the lack of transmission and differentials in pure electric vehicles, which are major gear applications. According to IEA, 14 million new electric vehicles were registered in Europe in 2023, China produced 8.1 million electric vehicles, and the US reached 1.4 million in 2023. Due to the shift towards electric vehicles, there will be a drastic reduction in number of gears used in vehicles.

Opportunities: Increasing adoption of plastic/polymer gears in automotive applications.

Gear materials can be categorized into two types: metallic gears and non-metallic gears. Non-metallic gears are made of polymers/plastics used in applications like sunroofs, ORVMs, power windows, and automatic tailgates. These gears have benefits like lower noise less vibration, are lightweight, and are low in cost. These gears are corrosion and maintenance-free, making them an ideal choice for light-duty applications. The increase in consumer demand for comfort and convenience features will make the use of non-metallic gears more prominent.

Challenges: High costs of advanced and lightweight gears

The high cost of lightweight and advanced gears is associated with multiple factors like materials used, manufacturing techniques employed, and product performance requirements. Advanced and lightweight materials like carbon fiber composites, aluminum alloys, and high-strength steels are expensive compared to other materials. The precision required for lightweight materials also increases costs, making it difficult for gear manufacturers. Although the initial costs for manufacturing advanced and lightweight gears are high, they have long-term benefits like more efficiency, less emissions, and lower maintenance.

Automotive Gears Market Ecosystem.

The major manufacturers in the automotive gears market have the latest technologies, diversified portfolios, and strong global distribution networks. The major players in the market are American Axle & Manufacturing Holding, Inc. (US), GKN Powder Metallurgy (US), Bharat Gears Ltd. (India), JTEKT Corporation (Japan), and Robert Bosch GmbH (Germany). The ecosystem analysis highlights various players in themarket, primarily representing component providers, manufacturers, and automotive OEMs.

The bevel gears are estimated to have the largest share in the differential gears market by type.

For the differential market by gear type, bevel gears are expected to hold more than 60% of the market. Bevel gears are used in all kinds of differentials across all vehicle types. Bevel gears are used in FWD transaxles and RWD, AWD, and 4WD differentials, except for differentials of very heavy trucks with Torsen differentials. The demand for bevel gears has increased due to rising sales of SUVs with 4WD/AWD drive configurations in Europe and North America. The countries such as China, Japan, US, Canada, and South Korea lead the premium SUVs market, contributing more than 90% of total production globally. In 2023, the production of luxury SUVs in the US out of total luxury cars was around 75%. Developing countries such as China, Brazil, and India have grown tremendously in SUV demand during previous years. These premium cars and SUVs are offered with AWD/ 4WD systems consisting of AWD/4WD systems comprised of two differentials: front and rear. North America also has a higher demand for pick-up trucks, which are usually rear-wheel driven. Also, the growing axle configuration in the heavy trucks segment across all regions will boost the differential units, increasing demand for bevel gears. The differentials market is expected to grow with the increasing vehicle production of passenger cars and the increased production of multi-axle trucks available in 6x4 and 8x4 configurations that use double differentials.

Dual-clutch transmission (DCT) is estimated to be one of the fastest-growing transmission gear markets under the review period.

In the transmission gears market, by transmission type, DCT is estimated to be one of the fastest-growing segments. Customers are looking for comfortable and performance-driven technology to tackle regular traffic conditions, which is why the market for DCT is growing to provide a smoother driving experience. The DCT offers fast gear shifting with negligible lag between two consecutive gears, resulting from its design allowing for pre-selection of gears. North America dominates the largest gear market for DCT owing to the advantages appealing to the regional customers due to its rapid gear shifting capabilities and enhanced driving dynamics. Further, the market trend for DCT is rapidly changing in Asia Pacific due to the shift in consumer preference towards high-quality driving experience. Many OEMs in the region have begun offering this transmission in their vehicles. Passenger cars, mostly mid-size SUVs and sedans, are provided with DCT transmission. Global OEMs such as Porsche, Volkswagen, Ford, Chrysler, Hyundai, and Kia have integrated DCT into their existing models. As several OEMs are leading this transition while integrating DCT systems to enhance performance and cater to evolving consumer preferences, the demand for helical gears will continue to remain upward in the future.

The differential system is estimated to hold the largest market share in the hybrid vehicle gears market during the forecast period

Hybrid SUVs offered in RWD/AWD configurations are expected to lead the automotive gears market for differential systems. The market penetration of hybrid cars with RWD/AWD is low, but the market share is expected to grow owing to its advantages. The RAV4 Hybrid and Prius AWD have an advanced AWD-i system to secure handling in slippery conditions. Major PHEV OEMs such as Lexus, Toyota, Hyundai, Volvo, and Ford will launch RWD and 4WD/AWD PHEV models in the coming years. This will prompt demand for differentials and gears installed in this vehicle segment.

Further, The RWD or 4WD/AWD cars are mostly equipped with locking or limited slip differentials (LSD) that improve vehicle balance and provide sufficient traction on any surface, leading to enhanced driver confidence. Differentials are installed with bevel, pinion, hypoid, and helical spur gears. The demand for hybrid SUVs with RWD/AWD driving modes will drive the market for differential gears.

Asia Pacific region will dominate the global automotive gears market.

In the Asia Pacific region, the car industry is primarily responsible for global production, covering nearly 60% of the worldwide output. In the region, there are companies like Toyota Motor Corporation (Japan), Hyundai Motor Co., Ltd. (South Korea), Tata Motors Ltd. (India), Suzuki Motor Corporation (Japan), and Mahindra and Mahindra (India) which have been leaders in car production and also manufacturers of automotive components. The region accounted for about 50% of the global SUVs production in 2023, most of which were equipped with AWD/4WD systems. As a result, this will create demand for differential gears. Apart from that, the consumer mindset in the market, which is winging towards dual-clutch transmissions and automatic manual transmissions, is the factor driving the demand for gears such as transmission ones.

Moreover, riding comfort has dramatically been affected by the rapidly increasing demand for smooth gear shifting. As a result, people have started preferring dual-clutch transmissions and automated manual transmissions, so the transmission gear market has improved. Moreover, the with the growing disposable income of the population and demand for comfort features like sunroofs, power windows, and ORVMs keep rising in countries like China, India, Japan, and Korea. This will act as a driving factor for the non-metallic gears used in such applications, supporting the region's automotive gears market growth.

ASIA PACIFIC: AUTOMOTIVE GEARS MARKET

Key Market Players

Global players dominate the automotive gears market and comprise several regional players. The key players in the market are American Axle & Manufacturing Holding, Inc. (US), GKN Powder Metallurgy (US), Bharat Gears Ltd. (India), JTEKT Corporation (Japan), and Robert Bosch GmbH (Germany)

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Scope of the Report

Along with the given market data, MarketsandMarkets offers customizations in accordance with the company’s specific needs.

The study segments the automotive gears market:

Application Type

• Transmission system
• Differential system
• Steering system
• Other automotive applications

By Vehicle Type

• Passenger Car
• Light commercial vehicle
• Heavy commercial vehicle

By Material type

• Metallic
• Non-metallic

By Gear Type

• Planetary gears
• Bevel gears
• Rack and pinion gears
• Hypoid gears
• Worm gears
• Helical gears
• Spur gears
• Pinion gears
• Non-metallic gears

Hybrid vehicle gears market by application

• Transmission system
• Differential system
• Steering system
• Other automotive applications

Differential gears market by gear type

• Bevel gears
• Hypoid gears
• Worm gears
• Spur gears
• Pinion gears
• Helical gears

Transmission gears by transmission type

• Automatic transmission
• Automated manual transmission
• Manual Transmission
• Dual-clutch transmission

By Region

• Asia Pacific
• North America
• Europe
• Rest of the World [RoW]

Recent Developments

• In May 2023, AAM invested USD 10 million in the Global Strategic Mobility Fund, a venture capital fund by EnerTech Capital. Due to this investment, AAM has access to Enertech's vast network of mobility businesses, which will help enhance AAM's products.
• In April 2023, Dowlais Group announced the demerger of GKN Automotive, GKN Powder Metallurgy, and GKN hydrogen business from Melrose Industries plc into Dowlais Group Plc. Dowlais Group plc acquired the above three companies from Melrose Industries Plc in this demerger.
• In August 2022, in response to the growth of electric vehicles, JTEKT developed JTEKT Ultra Compact Diff., a differential for Electric vehicles eAxle. The differential is small in size and is highly durable. The new differential features high torque density and durability. Despite the compact, the differential strength is the same for JUCD (JTEKT Ultra Compact Differential).

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