Powertrain Market - Global Market Share, Trends, Analysis and Forecast, 2023-2032

The global powertrain market was estimated to be US$ 195.7 Billion in 2022 and is expected to reach US$ 377.84 Billion by 2032 at a CAGR of 6.8%.

The powertrain refers to the system in a vehicle that generates power and transmits it to the wheels, enabling the vehicle to move. It consists of various components that work together to convert energy into mechanical motion. The main components of a powertrain typically include the engine, transmission, driveshaft, differential, and wheels. The engine is the primary source of power and converts fuel (such as gasoline or diesel) into mechanical energy through combustion.

The transmission is responsible for controlling the power generated by the engine and transmitting it to the wheels at the desired speed and torque. It allows the driver to shift gears and adjust the power delivery to match driving conditions. Overall, the powertrain is a critical system in a vehicle that is responsible for power generation, transmission, and ultimately propelling the vehicle forward.

Powertrain Market Growth Drivers

Increasing demand for fuel-efficient vehicles is driving the market growth

Stringent emission regulations are driving the global powertrain market as governments worldwide impose limits on vehicle emissions to combat climate change. Regulations such as the European Union's Euro 6 standards have pushed automakers to invest in advanced powertrain technologies like selective catalytic reduction (SCR) and gasoline direct injection (GDI) to meet the strict emission limits. This has resulted in the development and adoption of cleaner and more efficient powertrain systems.

The increasing demand for fuel-efficient vehicles is another major driver of the global powertrain market. Consumers are increasingly seeking vehicles with higher fuel efficiency to reduce operating costs and environmental impact. Automakers are responding by investing in technologies like turbocharging, direct fuel injection, and start-stop systems to optimize fuel consumption.

Furthermore, the growing adoption of electric and hybrid powertrain technologies is propelled by the need for cleaner and more sustainable transportation. Electric vehicles (EVs) and hybrids provide reduced or zero tailpipe emissions, lower dependence on fossil fuels, and improved energy efficiency. Advances in battery technology have made EVs more practical, with longer driving ranges and faster charging times. These factors collectively shape the trajectory of the global powertrain market.

Component Type Segmentation of Global Powertrain Market

Engine is the largest component type in the market

Based on component type, the largest segment in the global powertrain market is the engine segment. This is because the engine is the primary component that converts chemical energy into mechanical energy, which is then used to power the vehicle. The engine segment is also expected to grow at the fastest rate during the forecast period, due to the increasing demand for more fuel-efficient and powerful engines.

The transmission segment is the second largest segment in the global powertrain market. The transmission is responsible for transferring the power from the engine to the wheels. The transmission segment is expected to grow at a moderate rate during the forecast period, due to the increasing demand for more efficient and advanced transmissions.

The driveshafts, differentials, and axles segments are the smallest segments in the global powertrain market. These components are responsible for transferring the power from the transmission to the wheels. The driveshafts, differentials, and axles segments are expected to grow at a slow rate during the forecast period, due to the increasing use of all-wheel drive and four-wheel drive vehicles.

Regional Trends of the Global Powertrain Market

Asia-Pacific region is a key market for the powertrain industry

Geographically, the global powertrain market is segmented into North America, Europe, Asia-Pacific, Middle East and Africa, and South America.

Following are some of the major trends in these regions –

North America: The powertrain market in North America is characterized by a strong presence of established automotive manufacturers and technological advancements. The region has been witnessing a shift towards more fuel-efficient and environmentally friendly powertrain technologies due to stringent emission regulations.

The demand for electric and hybrid powertrains has been increasing, driven by government incentives, consumer preferences for sustainability, and a growing charging infrastructure. The presence of major automakers, such as General Motors and Ford, has also fueled research and development activities in powertrain technologies in the region.

Europe: Europe is a significant market for powertrain technologies, driven by stringent emission regulations and the push towards electrification. The region has been at the forefront of adopting electric powertrains, with several countries announcing plans to ban internal combustion engine vehicles in the coming years.

As a result, there is a strong emphasis on electric and hybrid powertrains, and many European automakers have introduced electric models to their portfolios. The presence of key automotive players, such as Volkswagen, BMW, and Mercedes-Benz, contributes to the region's leadership in powertrain technology development.

Asia-Pacific: The Asia-Pacific region is a key market for the powertrain industry due to its large automotive market, rapid industrialization, and growing consumer demand. The region is characterized by a diverse mix of powertrain technologies, including conventional, electric, and hybrid systems. The region also witnesses intense competition among automakers, leading to continuous advancements in powertrain technologies to meet customer demands for fuel efficiency, performance, and low emissions.

Middle East and Africa: The Middle East and Africa region has a unique set of dynamics in the powertrain market. The market is predominantly driven by the demand for commercial vehicles, such as trucks and buses, due to the region's infrastructural development and growing logistics sector.

In this region, conventional powertrains, especially diesel engines, continue to dominate due to their high torque output and long-haul capabilities. The region's vast oil reserves also provide an opportunity for exploring alternative fuel technologies, such as natural gas and hydrogen, for powertrains.

South America: The powertrain market in South America has been shaped by factors such as economic conditions, government policies, and consumer preferences. The region has a significant market for flex-fuel vehicles, which can run on either gasoline or ethanol. This has driven the demand for engines capable of operating with different fuel types.

While electric and hybrid powertrain adoption is still relatively limited in the region, there is growing awareness and government support for electric mobility. However, challenges such as limited charging infrastructure and affordability of electric vehicles hinder their widespread adoption in the region.

Key players and market strategies:

Companies operating in the global powertrain market have adopted several growth strategies to stay competitive and capitalize on emerging opportunities.

Some major growth strategies include:

Strategic Partnerships and Collaborations: Companies often form partnerships and collaborations to leverage complementary expertise and resources. For example, in 2020, General Motors (GM) formed a strategic partnership with Honda to jointly develop next-generation powertrain technologies, including advanced fuel cells and battery systems.

Mergers and Acquisitions: Companies pursue mergers and acquisitions to expand their product portfolios, gain market share, or enhance technological capabilities. In 2020, BorgWarner, a global powertrain technology leader, completed the acquisition of Delphi Technologies, allowing them to offer a broader range of propulsion solutions.

Expansion into Electric and Hybrid Powertrains: Many companies are expanding their focus on electric and hybrid powertrain technologies to meet the growing demand for cleaner and more sustainable vehicles. Volkswagen, through its brand Volkswagen Group, has made a significant commitment to electric mobility with its "Roadmap E" strategy, aiming to launch more than 70 all-electric models.

Geographic Expansion: Companies target new markets and regions to expand their customer base and increase market share. For example, Aisin Seiki, a leading global automotive components supplier, has expanded its operations into emerging markets like China and India to tap into their growing automotive industries.

Product Innovation and Differentiation: Companies strive to develop innovative powertrain solutions that offer improved performance, efficiency, and lower emissions. ZF Friedrichshafen, a global technology company, has focused on developing hybrid and electric driveline systems, as well as innovative transmission technologies like the 8-speed automatic transmission.

Aisin Seiki Co., Ltd., BorgWarner Inc., Continental AG, Delphi Technologies, Denso Corporation, Eaton Corporation, Ford Motor Company, General Motors Company, GKN Automotive Limited, Honda Motor Co., Ltd., Magna International Inc., Robert Bosch GmbH, Schaeffler AG, Tenneco Inc., ZF Friedrichshafen AG and many more.

Global Powertrain Market Segmentation:

By Transmission Type:

• Manual Transmission
• Automated Transmission
• Continuously Variable Transmission

By Component Type:

• Engine
• Transmission
• Drive Shafts
• Differentials
• Axles
• Others

By Vehicle Type:

• Passenger Cars
• Commercial Vehicles
• Off-road Vehicles
• Motorcycles

By Technology:

• Conventional Powertrain
• Electric Powertrain
• Hybrid Powertrain

By Region

• North America
  • United States
  • Canada
  • Rest of North America
• Europe
  • Germany
  • United Kingdom
  • Italy
  • France
  • Spain
  • Rest of Europe
• Asia Pacific
  
  • Japan
  • India
  • China
  • Australia
  • South Korea
  • Rest of Asia Pacific
• Middle East & Africa
  •  UAE
  • Saudi Arabia
  • South Africa
  • Rest of the Middle East & Africa
• South America
  • Brazil
  • Rest of South America