Automotive Transmission Market

Growing Demand for Automatic Automotive Transmission to Drive market growth

The rapid use of cutting-edge technologies in the automotive industry drives market CAGR. Traveler cars typically have automatic transmissions because of the growing need for comfort, more noticeable comfort, and ease of usage. Similarly, increasing traffic worldwide presses purchasers to acquire "Please pass on our automobiles with an automated system. Major auto manufacturers are investing much research to build technologies to satisfy the growing need for an eco-friendly and enjoyable driving experience. The growing popularity of robotization and better, technologically sophisticated cars benefits the market's growth.

Globally, the logistics sector is expanding due to rising urbanization, industrialization, and better road infrastructure. Additionally, the expansion of commercial vehicles is fueled by changes in the mining, construction, and IT sectors and an ever-increasing population. The AMT has two slopes. By pressing the gear lever to upshift and pulling it back to downshift, the driver may adjust the automatic or switch to the manual system as needed.

For instance, In February 2021, ZF announced a $200 million investment in North American commercial vehicle gearbox production. The ZF Powerline 8-speed automatic gearbox will be produced in Grey Court, South Carolina, at the company's state-of-the-art manufacturing facility starting in 2023. The Marysville, Michigan factory of ZF received an about USD 6 billion axle contract in July 2021 to provide beam axles and axle drives for pick-up trucks through 2027. Thus, driving the automotive transmission market revenue.

The Global Automotive Transmission Market Industry is poised for substantial growth, with projections indicating a market size of 66.2 USD Billion in 2024 and an anticipated increase to 116.6 USD Billion by 2035. This growth reflects a compound annual growth rate (CAGR) of 5.27% from 2025 to 2035, driven by factors such as technological advancements, rising vehicle production, and the increasing adoption of electric vehicles. The market's expansion is indicative of the automotive industry's ongoing evolution, as manufacturers adapt to changing consumer preferences and regulatory demands.

The Global Automotive Transmission Market Industry is witnessing a marked increase in demand for fuel-efficient vehicles. As consumers become more environmentally conscious, manufacturers are focusing on developing advanced transmission systems that enhance fuel economy. For instance, the integration of continuously variable transmissions (CVTs) and dual-clutch transmissions (DCTs) is becoming prevalent. This shift is projected to contribute to the market's growth, with the industry expected to reach 66.2 USD Billion in 2024. The emphasis on reducing carbon emissions aligns with global regulatory frameworks, further driving innovation in transmission technologies.

The Global Automotive Transmission Market Industry is significantly influenced by the rising adoption of electric vehicles (EVs). As governments worldwide implement stringent emission regulations, the shift towards electrification is accelerating. EVs often utilize simplified transmission systems, which could lead to a transformation in traditional transmission manufacturing. This transition may result in a reallocation of resources and investments towards developing specialized transmission solutions for electric drivetrains. The growing popularity of EVs is expected to reshape the market landscape, potentially contributing to a compound annual growth rate (CAGR) of 5.27% from 2025 to 2035.

The Global Automotive Transmission Market Industry is closely tied to the overall growth in vehicle production and sales. As emerging economies continue to industrialize, there is a notable increase in vehicle demand. Countries such as India and China are experiencing rapid urbanization, leading to higher vehicle ownership rates. This surge in production necessitates the development of efficient transmission systems to meet consumer expectations for performance and reliability. The anticipated growth in vehicle sales is likely to bolster the market, supporting projections of reaching 66.2 USD Billion in 2024.

The Global Automotive Transmission Market Industry is significantly impacted by stringent regulatory compliance and emission standards. Governments are increasingly enforcing regulations aimed at reducing greenhouse gas emissions, compelling manufacturers to innovate and adopt cleaner technologies. This regulatory landscape drives the development of advanced transmission systems that optimize fuel consumption and minimize emissions. As a result, manufacturers are investing in research and development to create compliant transmission solutions. This trend is expected to contribute to the market's growth trajectory, with projections indicating a market size of 116.6 USD Billion by 2035.

Technological innovation plays a pivotal role in shaping the Global Automotive Transmission Market Industry. The advent of electric vehicles (EVs) and hybrid models necessitates the development of sophisticated transmission systems that can efficiently manage power delivery. Innovations such as automated manual transmissions (AMTs) and advanced electronic control systems are gaining traction. These advancements not only improve vehicle performance but also enhance driver experience. As the market evolves, it is anticipated that the industry will grow to 116.6 USD Billion by 2035, reflecting the increasing integration of technology in automotive transmissions.

By region, the study provides market insights into North America, Europe, Asia-Pacific and Rest of the World. Asia Pacific dominates the global automotive transmission market due to rising sales of electric cars in the area are predicted to help the industry flourish. The demand for commercial vehicles equipped with automated manual transmissions (AMT) is predicted to expand in the Asia-Pacific region, which will likely boost the automotive transmissions market.  Additionally, it is projected that rising automobile sales, particularly in nations like China, India, Japan, and South Korea, would favorably affect the expansion of the regional market throughout the projection period.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: Global Automotive Transmission Market Share By Region 2022 (USD Billion)

Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

North America's automotive transmission market accounts for the second-largest market share due to rising demand for commercial vehicles, another key factor in the worldwide automotive gearbox system. Additionally, North America is a significant market for luxury and sports cars, and these segments are anticipated to grow steadily during the projection period. The market for automobile transmissions may grow due to North America's increased demand for aftermarket transmission systems. Further, the US automotive transmission market held the largest market share, and the Canadian automotive transmission market was the fastest-growing market in the European region.

The Europe Automotive Transmission Market is expected to grow at the fastest CAGR from 2023 to 2032. Due to the growing emphasis on hybrid cars and their good effects on fuel economy and emissions, Europe will likely experience substantial growth with the increased penetration of electric gearboxes.  Further, the German automotive transmission market held the largest market share, and the UK automotive transmission market was the fastest-growing market in the European region.

Leading market players are investing heavily in research and development to expand their product lines, which will help the automotive transmission market, grow even more. Market participants are also undertaking various strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. The automotive transmission industry must offer cost-effective items to expand and survive in a more competitive and rising market climate.

Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers use in the global automotive transmission industry to benefit clients and increase the market sector. In recent years, the automotive transmission industry has offered some of the most significant medical advantages. Major players in the automotive transmission market, including Allison Transmission Inc., Aisin Seiki Co. Ltd., Continental AG, BorgWarner Inc., Eaton Corporation PLC, GKN Plc, Jatco Ltd, Magna International Inc., ZF Friedrichshafen AG, Schaeffer AG, and others, are attempting to increase market demand by investing in research and development operations.

Allison Transmission Inc. is an American company with a rich history dating back to 1915 when James A. Allison founded the company. It is headquartered in Indianapolis, Indiana, USA. The company initially started as a provider of aircraft engines and race car components. However, it later shifted its focus to automatic transmissions for commercial vehicles. For instance, In April 2022, The off-highway component machining business of the Madras Export Processing Zone (MEPZ) and the off-highway transmission division of India-based AVTEC were both acquired by Allison Transmission.

Allison's product line will be positioned for strategic expansion in the off-highway category in India and other international markets that require purpose-built products that provide higher performance, durability, reliability, and productivity.

Jatco Ltd, also known as Japan Automatic Transmission Co., Ltd, was established in 1969 as a joint venture between Nissan Motor Co., Ltd and Mazda Motor Corporation. The company's headquarters are located in Fuji City, Shizuoka, Japan. Jatco is a major player in the automotive transmission market and has expanded its operations globally, with production facilities and offices in various countries. The company is known for producing various automatic transmissions for passenger vehicles, including conventional automatic transmissions and continuously variable transmissions (CVT).

For instance, in June 2021, For medium and large FWD vehicles, JATCO created a new continuously variable gearbox called "CVT-X" with improved environmental performance and maneuverability. More than 90% gearbox efficiency is reportedly attained, previously considered unattainable for a CVT.