The increasing demand for environment-friendly vehicles and increasingly stringent government regulations regarding vehicular emission are expected to favour the demand for automotive powertrains driving the market to reach $ 1.13 tillion by 2025.
According to a new report by Grand View Research, the automotive powertrains market is anticipated to register a CAGR of 11.6% from 2021 to 2025.
The report said that technological advancements in powertrain systems to enhance the vehicle's efficiency will boost market growth prospects over the forecast period.
Major players in the automotive powertrain market include BorgWarner, Continental, Magna International, Marelli, Mitsubishi Electric, Nidec Corporation, Robert Bosch, Schaeffler, Valeo and ZF.
According to Grand View Research, the commercial vehicle segment is expected to expand at the highest CAGR of around 11.7% over the forecast period. It can be attributed to the increasing demand for a unified supply chain network connecting multiple transportation modes, including freight rail, air, and express delivery services, maritime transport, and truck transport.
In terms of propulsion type, the ICE segment dominated the market in 2020 and is anticipated to value more than $ 902.91 billion by 2028. This can be attributed to the price difference between ICEs and EVs and inadequate charging infrastructure.
The Asia Pacific regional market held the dominant market share in 2020, with the China market being a significant contributor. China remains the largest manufacturer of automobiles and automotive markets across the globe. In 2020, China ranked first in terms of the production of passenger cars globally, which stood at nearly 21 million, the research firm said.
The adoption rate and pace of evolution of automotive powertrain vary across regions according to purchase subsidies, regulatory differences, road pricing, fuel taxation policy, state support, and consumer preferences.
Electric Powertrain
In Europe and countries such as China, South Korea, and Japan, stringent regulations are expected to make OEMs shift their focus on electrified powertrain options. Other significant factors that constitute the evolution of powertrain include developing charging infrastructure in different regions globally.
Automated Transmission
Increasing vehicle sales and the growing adoption of automated transmission vehicles in emerging countries such as India, China, Indonesia, Japan, and Brazil, are expected to drive the market. In addition, the substantial rise in the purchasing power of consumers has increased the demand for state-of-the-art motor vehicles, driving the demand for upgraded systems.
All Wheel Drive
The rising use of All Wheel Drive in SUVs in emerging regions is also expected to support the growth of the powertrain market. In addition, the growing demand for AWD-equipped vehicles in the Asia Pacific region is expected to boost the growth of the all-wheel-drive system market.
According to Grand View Research, the COVID-19 pandemic has hampered the growth prospects of several industries in 2020; powertrain manufacturers are facing a year-on-year decline in unit volumes sales and revenues. For instance, BorgWarner, a prominent market player in the electric powertrain market, witnessed a decrease in the e-Propulsion & Drivetrain business segment. However, the demand for vehicles with upgraded safety features is likely to increase post-pandemic. Since automotive powertrain plays a vital role in automobiles, the market could regain momentum. Furthermore, despite the pandemic, the growing demand for electric vehicles is anticipated to boost the demand for automotive powertrains, the market research and consulting company added.
Courtesy: Grand View Research. NB: Photo is representational; courtesy: BMW.