Automotive Drivetrain Market Size, Share & COVID-19 Impact Analysis, By Drive Type (Front Wheel Drive (FWD), Rear Wheel Drive (RWD), and All Wheel Drive (AWD)) and By Vehicle Type (Passenger Cars, Commercial Vehicles, and Electric Vehicle), and Regional Forecasts, 2021-2028

The global automotive drivetrain market size was USD 183.26 billion in 2020. The market is projected to grow from USD 191.50 billion in 2021 to USD 311.43 billion in 2028 at a CAGR of 7.2% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with automotive driveline witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a significant decline of -14.3% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

The drivetrain is a combination of parts of the vehicle that work together with an engine for the movement of wheels. This complete system also drives different parts of the car into motion. Component of drivetrain includes differential, transmission, driveshaft, axles, constant velocity joint (CV joints), universal joint (U joint), and wheels.   

Moreover, a vehicle’s drivetrain connects the engine to the wheel by enabling the vehicle to move. As the engine starts running, the vehicle's drivetrain transfers power through the transmission to the drive wheel that can be a rear-wheel, front-wheel, or all wheels. Modern passenger and commercial vehicles have all wheel drive installed. However, in some cases, major cars use a front wheels drive. In addition, the motorcycle & e-mobility drivetrain manufacturers are actively involved to expand their presence & business overseas step by adopting new strategies and collaborations.

Significant Disruption in Manufacturing Process Due to COVID-19 Has Heavily Affected Growth

The COVID-19 pandemic had a major detrimental effect on the overall economy, including automotive business areas. The automotive industry resulted in strong headwinds and volatility due to COVID-19, which significantly impacted the volume decline, recovery rate variability (light vehicle production), and many others.

As a result, the production of drivetrain components witnessed decline due to the world's economic ecosystems. Moreover, for instance, the raw material required to produce components was facing severe challenges. The GKN company had to cease its powder metallurgy business in all the countries. Furthermore, the overall auto industry, including members in value chain faced uncertainty in their respective business. Many suppliers have experienced significant resources bottlenecks in the global supply and logistics chains in the year that had a perceptibly negative effect on their businesses.

Moreover, companies operating in the automotive drivetrain technology market have seen a 17-19% decline in sales. However, government support in recovery incentives has brought hopes to return the sales to normal. Additionally, companies accelerating growth in e drive development focus on strengthening a strong supply chain and maintaining contact with customers & suppliers. These measures allow the business to respond dynamically to rebound.

The market is expected to recover in the second half of 2021 owing to government affairs of some regions such as North America and Europe returning to normal. Similarly, the fastest recovery rates in some regions are also expected to boost the demand for the product in the near period.

LATEST TRENDS

Increased Demnd For Luxury Features And Usage of Advanced Technology To Boost Market Growth

Automotive manufacturers around the globe have started adopting customer-centric needs and changing regional patterns by choices of customers. The consumer is more inclined toward the use of luxury comfort features vehicles, and in recent times, the growth rate of comfort & safety features in vehicles has seen a prominent rise across the globe. Moreover, gasoline-powered vehicles' trend started declining in major regions/countries, and customers were seen to adopt electric vehicles due to the effect of carbon dioxide emission and for an environmental cause. As a result, e-drive component manufactures are seen in most profit margins in developed countries. In addition, to reduce the overall weight of the vehicles and improve overall fuel efficiency, and for better experience while driving in low-cost materials, the automotive component manufacturers are actively investing or using lightweight materials for their future vehicles. Thus, all such parameters and accelerated growth in electric propulsion vehicles are propelling to the growth of the global market.

DRIVING FACTORS

Development Of All Wheel Drive For Future Vehicles And Increasing Technology To Boost Market Growth

The rising developments in all wheel drive (AWD) for upcoming passenger cars and SUVs are driving the growth of the market. The important shift in consumer demand will eventually impact the driveline business offered by different OEMs. North America, China, and European countries have seen significant volume uplifts for the models built with all wheel drives. For instance, German manufacturers, such as Audi, Mercedes Benz, BMW, and many others, continue their penetration in AWD. Audi official has stated that every second, the Audi Quattro model is driven by all-wheel drive. Moreover, the possibility of AWD EVs from Land Rover, Chevrolet (Volt), and the soon-to-appear fourth-generation Toyota Prius that is expected to roll in the market in the coming years will create opportunities for the EV drivetrain market.

The companies are also involved in the new integrated drivetrain system used for advanced vehicles. The downsizing of the engine capacity with the primary focus on efficient mileage has propelled many manufacturers to build tech-savvy products. Similarly, R&D product launches from players for electric, fuel cell commercial vehicles coupled with high torque with increased acceleration, traction, and towing capabilities are projected to drive the market during the forecast period.

RESTRAINING FACTORS 

Associated High Cost and Fluctuating Raw Material Prices May Restrain Market Growth

The cost of any drivetrain equipped in a vehicle varies by the requirements and design. It directly increases the cost of the overall vehicle. Increase in vehicles features and high engine capability lead to rise in cost. Moreover, the other prime factor responsible for increasing this cost is using expensive/advanced raw material and its fluctuation rates in each region. Further, the customers who prefer to upgrade to an advanced drive system also need an additional USD 2,000 - USD 3,500 based on additional parts/components. Thus, the rise in demand for high powered & comfortable vehicles and the cost associated with powder processing & steel to fulfill this need will be limited due to this factor. Thus, these factors are hampering the automotive drivetrain market growth.

SEGMENTATION

By Drive Type Analysis

Front Wheel Drive Segment Dominates Market

The market is segmented on the basis of type into forward wheel drive (FWD), rear wheel drive (RWD), and all wheel drive (AWD).

Front wheel drive is extremely efficient in terms of cost compared to other drive types and has many benefits related to the mass, space, fuel consumption, no friction from the driveshaft, and weight is balanced for traction. Many passenger cars in the world today use front wheel drive and manufacturers also prefer them owing to cheaper manufacturing cost, more space-efficient, and sporty performance in every vehicle. This segment is anticipated to hold the largest market share in the forecast period as many of the recent new cars in 2020 started using this configuration.

RWD is majorly found in school buses, minivans, full-size pickups, truck-based SUVs, high-performance cars, sport & premium vehicles, and sedan and light commercial vehicles. Moreover, many sports cars and luxury vehicles prefer RWD system that allows a better balance of weight. It has also been majorly preferred in the early days of motoring, and it is capable of handling rear wheels in bad weather conditions. Furthermore, rising sales of luxury vehicles and the trucking industry will propel the RWD drivetrain growth in future.

The AWD drive type possess inherent traction advantage in all conditions. It can feed power to each corner, helpful in rapidly changing environment, and improves traction in snow and wet roads. It is commonly used for SUVs as well as cars and minivans. The rising electric vehicle sales and companies' & consumers' preference for AWD in their upcoming vehicles will create a strong demand for AWD type systems in the future.

By Vehicle Type Analysis

Passenger Car Segment Hold Largest Market Share

Based on vehicle type, the market is segmented into passenger cars, commercial vehicles, and electric vehicle.

The global market is dominated by passenger car segment which holds the largest share. This is due to various factors, including rising industrialization, increasing urban population, and commuting needs. Moreover, factors such as a large number of vehicle presence, rising disposable incomes, and changing consumers' preference toward adopting newly advanced cars are altogether responsible for the rising automotive drivetrain market share. Further, rising economic conditions, increasing disposable income of individuals, rapid urbanization, and rising number of higher class sections of the population have increased the spending of individuals on luxuries, which are the factors propelling the growth of the passenger car segment.

In regard to product choice and revenues, the commercial vehicle segment is booming. Many manufacturers making drivetrain for MCV and HCV are focusing on AWD in vehicles with higher power capacity. Therefore, the commercial vehicle segment is projected to rise subsequently over the projected period.

The rising adoption rate of BEV, HEV vehicles across the globe and development related to its components, including e drive system, transmission, and powertrain unit are accelerated due to players' active involvement. Moreover, the rising concern over increasing environmental pollution and their low operating costs will propel the EV-based drive market growth in the coming years.

REGIONAL INSIGHTS

Asia Pacific stood at USD 77.18 billion in 2020 and is anticipated to come out as the fastest-growing region in the projected period. It is expected to dominate the global market with the highest CAGR. A significant factor contributing to the growth of this region is its presence of automotive manufacturers, strong supply chain, and supportive government policies. Furthermore, high population & economically strong countries such as China, India, and South Korea accounting for more than 45% of the global population and various favourable governmental measures aimed at reviving the auto industry, which was battered by COVID-19, are expected to promote market expansion in these countries. Furthermore, rising south Asian sales of AWD and expected EV & ICE sales, high urbanization, and smart cities are anticipated to propel the automotive market growth.

Europe holds the second-largest position in the market, of which Germany ranks first in this regional market as major auto manufacturers are located. Furthermore, they are early adopters of the new trends & technology and also second most manufacturing hub for auto parts across the world. Moreover, rapid adoption of EVs in Norway, Germany, the U.K., and the Netherlands is responsible for the growth of market in Europe.

North America is projected to be the third biggest market in the global market due to rising sales of vehicles and increasing consumer preference for comfort driving experience and pollution-free commute. Furthermore, the regional government is actively looking into the development relating to automotive components, which will support & promote manufacturing and contribute to the growth of the market.

The rest of the world consists of Latin America, the Middle East, and Africa. The Middle East is projected to add considerable growth to the market. The rising import and luxury sales in the region will propel the growth in this region.

KEY INDUSTRY PLAYERS

Investing In Drivetrain Components To Expand In Sustainability Business

Dana Limited is globally known as one of the leader companies in driveline business and e propulsion systems. It is an U.S. based automotive motor part manufacturer. The company has production facilities and technical systems worldwide and a workforce of more than 40,000 employees. The company offers products through off-vehicle, commercial vehicles, power technologies, and light vehicles.

In March 2020, Dana launched medium to large-sized telehandlers for construction equipment. The company focuses more on electric electrification in heavy-duty vocational vehicles and also operates and heavily invests in axles that specify the drivetrain system of conventional vehicles.

LIST OF KEY COMPANIES PROFILED:

• BORGWARNER INC (Michigan, U.S.)


• Aisin Seki Co., Ltd. (Aichi, Japan)


• American Axle & Manufacturing, Inc. (Detroit, U.S.)


• Melrose Industries PLC (London, U.K.)


• ZF Friedrichshafen AG (Friedrichshafen, Germany)


• Magna International Inc (Aurora, Canada)


• Dana Limited (Ohio, U.S.)


• JTEKT Corporation (Aichi, Japan)


• SHOWA CORPORATION (Saitama, Japan)


• Schaeffler AG (Herzogenaurach, Germany)

KEY INDUSTRY DEVELOPMENTS:

• May 2021–  Global tier 1 supplier of driveline company, American Axle & Manufacturing, Inc., has done an agreement with REE automotive to develop a new electric propulsion system for e mobility. The new electric drive units for electric vehicles will be developed at AAM’s Advanced Technology and Development Center in Detroit and deliver them by the end of 2021.

REPORT COVERAGE

The global automotive drivetrain market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, types, and leading product applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market's growth over recent years.

Report Scope & Market Segmentation