U.S. Automotive Transmission Market Size, Share & Industry Analysis, By Vehicle Type (Passenger Car (Class A, Class B, Class C, Class D, Class E, SUV and Class M), LCV, and HCV), By Transmission Type (Automatic Transmission (AT), Manual Transmission (MT), Automated Manual Transmission (AMT), Continuously Variable Transmission (CVT), and Dual Clutch Transmission (DCT)), By Propulsion Type (ICE, HEV, and BEV), and Country Forecast, 2025-2032

The U.S. automotive transmission market size was valued at USD 20.43 billion in 2024. The market is projected to grow from USD 21.13 billion in 2025 to USD 36.87 billion by 2032, exhibiting a CAGR of 8.3% during the forecast period.

The U.S. automotive transmission market encompasses the production, sales, and technological development of systems responsible for transmitting engine power to vehicle wheels, ensuring optimal speed and torque conversion. These systems include automatic, manual, continuously variable (CVT), dual-clutch (DCT), and automated manual transmissions (AMT), used across passenger cars, light commercial vehicles, and select heavy-duty applications. Vehicle transmissions play a pivotal role in enhancing fuel efficiency, driving comfort, and overall vehicle performance, making them a critical component in both traditional ICE and emerging electric and hybrid vehicles.

Market growth is primarily driven by rising consumer demand for fuel-efficient and performance-oriented vehicles, along with rapid advancements in transmission technologies. The widespread adoption of 8-10-speed automatic transmissions, lightweight materials, and electronic control systems has significantly improved drivability and reduced emissions. Additionally, the expansion of e-commerce logistics and last-mile delivery fleets has increased the adoption of automatic and AMT systems in LCVs. At the same time, regulatory emphasis on efficiency and carbon reduction continues to accelerate innovation across OEMs and component suppliers.

Key players dominating the U.S. automotive transmission market include Allison Transmission Holdings Inc., Aisin Corporation, ZF Friedrichshafen AG, Magna International Inc., and BorgWarner Inc. These companies maintain their leadership through extensive OEM collaborations, diverse transmission portfolios, and continuous R&D investments focused on hybrid and electric driveline integration.

MARKET DYNAMICS

MARKET DRIVERS

Rising Adoption of Automatic and Electrified Transmissions Drives Market Growth

The U.S. automotive market has experienced a significant transformation in transmission technology preferences, with automatic and semi-automatic systems rapidly replacing traditional manual gearboxes. This structural shift is primarily driven by evolving consumer expectations for superior driving comfort, seamless gear shifts, and enhanced vehicle performance. As a result, automatic transmissions (ATs) account for nearly the maximum share of new passenger vehicle sales in the country, emphasizing the dominance of automatic systems and the technological adoption of the U.S. automotive industry.

Major domestic and international automakers, including General Motors, Ford, Toyota, and Stellantis, are progressively equipping their vehicle lineups with 8-speed to 10-speed automatic gearboxes to strike an optimal balance between power delivery, smooth acceleration, and fuel efficiency. These advanced multi-speed units enable improved torque management and better compliance with Corporate Average Fuel Economy (CAFÉ) standards.

For Instance, in April 2025, General Motors announced a production expansion at its Toledo, Ohio, transmission facility, reallocating resources from EV drive-unit assembly to the production of conventional transmissions for gasoline-powered vehicles. The plant primarily supports light-duty truck models produced in Fort Wayne, Indiana, indicating continued increasing demand for traditional automatic transmissions, especially within the profitable light truck and SUV segments. This development is expected to boost the U.S. automotive transmission market growth during the forecast period.

MARKET RESTRAINTS

Declining Demand for Traditional Transmissions Due to Increasing Adoption of EVs

One of the most significant challenges faced by the market is the accelerating shift toward electric vehicles (EVs), which is reducing demand for conventional multi-speed transmissions. Unlike internal combustion engine (ICE) vehicles that require complex gearboxes, most EVs utilize single-speed transmissions due to electric motors' wide torque range and high efficiency at various speeds.

Leading suppliers, including ZF Friedrichshafen and Aisin Seiki, which previously dominated the 8- and 10-speed automatic transmission market, are now forced to pivot toward e-drive systems. For instance, in 2024, ZF announced that it will phase out production of certain ICE transmissions by 2027, redirecting investments into EV-compatible 2-speed gearboxes and integrated drive units. Similarly, Jatco, a major CVT supplier for Nissan, has seen a 30% decline in orders as Nissan accelerates its EV transition, including the 2024 Ariya SUV, which uses a single-speed reducer.

MARKET OPPORTUNITIES

Rising Demand for Hybrid and Electrified Transmissions Drives Market Growth

The transition toward hybrid powertrains continues to offer a compelling growth avenue for transmission suppliers and OEMs, particularly in the U.S. market. As regulatory pressure mounts and consumer preference shifts toward more fuel-efficient and lower-emission vehicles, hybrid drivetrains are gaining demand. Importantly, these hybrid systems still require advanced transmission architectures/designs, such as electronic continuously variable transmissions (eCVTs) or specialized hybrid gearbox integrations, which create opportunities for suppliers beyond the BEV single-speed system.

According to the U.S. Energy Information Administration, in Q1 2025, 22% of U.S. light-duty vehicle sales were hybrid, battery electric, or plug-in hybrid, up from 18% a year earlier. This increase was driven mainly by increased hybrid sales, while battery electric and plug-in hybrid sales remained flat.

Hybrid vehicles often demand unique or additional transmission/mechatronic components compared with pure ICE vehicles, such as power-split devices, electric motor integration, and more complex control units, which increase per-vehicle content and add value for suppliers.

U.S. AUTOMOTIVE TRANSMISSION MARKET TRENDS

Adoption of Lightweight and Sustainable Materials Emerging as a Key Market Trend

The growing emphasis on vehicle weight reduction, energy efficiency, and sustainability has become a major trend shaping the design and manufacturing of automotive transmissions in the U.S. market. With stricter federal Corporate Average Fuel Economy (CAFE) and Greenhouse Gas (GHG) regulations, automakers and Tier 1 suppliers are increasingly adopting lightweight and eco-friendly materials to enhance transmission efficiency and reduce lifecycle emissions.

Modern automatic, dual-clutch, and hybrid advanced transmission systems comprise numerous components, including casings, shafts, clutch packs, and gears, that have traditionally relied on heavy ferrous metals. However, OEMs and suppliers are now transitioning toward aluminum alloys, high-strength steels, and advanced composites to reduce overall mass without compromising structural rigidity or thermal stability.

MARKET CHALLENGES

Accelerating Electrification and Technological Transition is a Challenging Factor for the Market

The most significant structural challenge in the U.S. automotive transmission market is the rapid acceleration of vehicle electrification. Traditional internal combustion engine (ICE) vehicles, which rely on multi-speed automatic, manual, or dual-clutch transmissions, are steadily losing market share to battery electric vehicles (BEVs) that primarily use single-speed reduction gears or direct-drive systems. This transition is fundamentally altering the product landscape and long-term revenue base for U.S. transmission suppliers. Major domestic manufacturers, such as Allison Transmission, Eaton Corporation, and BorgWarner, are being forced to balance the decline of legacy ICE and AMT product lines with significant capital deployment into electrified propulsion systems.

Supplier Outlook

Segmentation Analysis

By Vehicle Type

LCV Segment Dominates Market Due to E-Commerce Expansion and Fleet Modernization Initiatives

On the basis of vehicle type, the market is classified into passenger car, LCV, and HCV.

The LCV segment dominates the market due to the expansion of e-commerce, last-mile delivery, and fleet modernization programs across the U.S. Automakers are increasingly adopting automated manual transmissions (AMTs) and torque converter-based ATs to enhance operational efficiency, reduce driver fatigue, and improve payload performance.  

For instance, in 2024, according to the U.S. Census Bureau, U.S. e-commerce sales reached approximately USD 1.19 trillion, marking a significant year-over-year increase driven by rising digital adoption and expanding online retail infrastructure. The sector’s growth was further supported by a high e-commerce penetration rate during Q2 2024, as leading platforms such as Amazon, Walmart Marketplace, and TikTok Shop continued to capture a growing share of total retail sales.

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By Transmission Type

Automatic Transmission (AT) Segment Leads Market Owing to Rising Demand for Driving Comfort and Efficiency

In terms of transmission type, the market is categorized into automatic transmission (AT), manual transmission (MT), automated manual transmission (AMT), continuously variable transmission (CVT), and dual clutch transmission (DCT).

The automatic transmission (AT) segment holds the largest U.S. automotive transmission market share, primarily driven by the growing consumer inclination toward convenience, seamless driving experience, and enhanced vehicle efficiency. Modern AT systems provide superior performance, smoother gear transitions, and better fuel economy compared to traditional manual transmissions, making them the preferred choice among U.S. consumers. The adoption of 8-10-speed automatic transmissions across SUVs, sedans, and pickup trucks has become a benchmark for many automakers, offering an optimal balance between power delivery and fuel efficiency. Major OEMs such as Ford, General Motors, Toyota, and Stellantis have standardized multi-speed ATs in their vehicle lineups to cater to consumer expectations for comfort, refinement, and reduced emissions. Additionally, advancements in electronic control units (ECUs) and adaptive shift technologies have further enhanced the responsiveness and durability of AT systems, reinforcing their dominance in the U.S. market.

By Propulsion Type

ICE Segment Leads Market Owing to Established Fleet Base and Strong Demand for Conventional Powertrains

Based on propulsion type, the market is segmented into ICE, HEV, and BEV.

The Internal Combustion Engine (ICE) vehicle segment continues to hold a substantial share of the U.S. automotive transmission market, supported by a well-established vehicle fleet, extensive fueling infrastructure, and a deeply entrenched consumer preference for conventional powertrains. The U.S. market, characterized by its vast geographical spread and diverse driving conditions, continues to favor ICE-powered vehicles, particularly in categories such as pickup trucks, SUVs, and commercial vehicles that require high torque, extended driving range, and quick refueling capabilities. This sustained demand for ICE vehicles not only reinforces their strong position in the U.S. transmission market but also drives continuous innovation in transmission technologies tailored for gasoline and diesel applications.

COMPETITIVE LANDSCAPE

Key Industry Players

Wide Range of Transmission Technologies and Strong OEM Partnerships Strengthen Market Positions of Leading Players

The U.S. automotive transmission market exhibits a moderately consolidated structure, characterized by the presence of several global manufacturers alongside a few regional suppliers catering to niche applications. Major companies are emphasizing technological advancements, product diversification, and collaboration with OEMs to strengthen their market presence and meet evolving vehicle efficiency and emission standards.

Prominent players, including Allison Transmission Holdings Inc., Aisin Corporation, ZF Friedrichshafen AG, BorgWarner Inc., and Magna International Inc., hold significant market shares in the U.S. market. Their leadership is supported by extensive product portfolios that span automatic, AMT, CVT, and dual-clutch systems, as well as strong partnerships with leading automakers, including General Motors, Ford, Stellantis, and Toyota. These companies leverage advanced manufacturing capabilities, robust after-sales networks, and a strong focus on R&D for lightweight and energy-efficient transmission systems.

LIST OF KEY U.S. AUTOMOTIVE TRANSMISSION COMPANIES PROFILED

• Aisin Corporation (Japan)
• ZF Friedrichshafen AG (Germany)
• Allison Transmission Holdings Inc. (U.S.)
• Magna International Inc. (Canada)
• BorgWarner Inc. (U.S.)
• Eaton Corporation (U.S.)
• Jatco Ltd. (Japan)
• Hyundai Transys Inc. (South Korea)
• Continental AG (Germany)
• GKN Automotive (U.K.)

KEY INDUSTRY DEVELOPMENTS

• In September 2025, ZF announced that the company is presenting the further developed ‘8HP evo’ automatic transmission as a response to the global boom in hybrid drives. Based on the benchmark 8-speed transmission and equipped with numerous further developments, the 8HP evo is designed for a wide range of hybrid platforms and manufacturer requirements. The 8-speed automatic transmission is one of ZF's most successful products.
• In April 2025, General Motors ramped up transmission production at its Toledo, Ohio, facility, shifting its focus from electric vehicle drive unit manufacturing to components for gasoline-powered vehicles. The plant supplies transmissions for light-duty trucks produced at GM’s Fort Wayne, Indiana, assembly plant, as well as other manufacturing facilities.
• In October 2024, Magna introduced its innovative Dual Clutch Transmission Eco (DCT Eco) solution for a European OEM. This contract marks the first high-volume award for the new transmission family, supporting various models in global markets with ICE transmissions.
• In February 2024, Magna announced that the company had been awarded a new contract by a North American-based OEM to supply a specialized primary rear eDrive system for one of its high-end niche vehicle platforms. The highly complex system, a variant of Magna’s 800V eDS Duo, delivers exceptional power and performance typically found in only a few vehicles.
• In January 2024, Continental and Aurora Innovation announced that they had achieved a key development milestone in commercializing autonomous trucks at scale. The companies have finalized the design and architecture of the future fallback system and hardware for the Aurora Driver, an SAE (Society of Automotive Engineers) Level 4 autonomous driving system that Continental plans to start producing in 2027.

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