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Automotive All-wheel-drive Market Size (2024 - 2029)

The all-wheel-drive market is experiencing growth driven by advancements in AWD technology and its integration into the expanding electric vehicle sector. Despite setbacks from the COVID-19 pandemic, the market has rebounded as global economic activities and vehicle production have resumed. The demand for AWD systems is particularly strong in North America and Europe due to their enhanced capabilities and performance in cold weather conditions. Additionally, the luxury vehicle market in the Asia-Pacific region is growing rapidly, contributing to the overall market expansion. Improvements in safety, stability, and drive control are attracting interest in AWD systems across various vehicle categories, including smaller passenger and hybrid electric vehicles.

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Market Size of Automotive All-wheel-drive Industry

Automotive All Wheel Drive Market Overview
Study Period 2019 - 2029
Base Year For Estimation 2023
Forecast Data Period 2024 - 2029
CAGR > 7.50 %
Fastest Growing Market Asia Pacific
Largest Market North America

Major Players

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*Disclaimer: Major Players sorted in no particular order

Automotive All-Wheel Drive Market Analysis

The automotive all-wheel-drive market is anticipated to register a CAGR of over 7.5% during the forecast period, 2022-2027.

The COVID-19 pandemic has negatively impacted the market as lockdowns and shutdowns of manufacturing facilities of significant OEMs resulted in decreased production and sales of cars across the globe. However, the market has regained momentum as economic activities resume and vehicle production also rises worldwide.

  • The passenger car sales decreased in 2021 to around 2.39 million units due to the Covid-19 pandemic; as the situation usually gets, the passenger car sales have risen to 2.72 million units.

The developments and improvements in the all-wheel-drive (AWD) system and its penetration into the growing electric vehicles market are the significant factors that are anticipated to propel the growth of the market studied during the forecast period.

  • In June 2022, Hyundai India plans to launch its all-new AWD electric car Hyundai Ioniq 5 in mid of August 2022.

Improvements in the AWD capabilities and the cold weather condition are driving factors for the North American and European regions to anticipate a potential demand for AWD in the future. The market for luxury vehicles has boomed in the Asia-Pacific region. It is expected to continue to increase at the highest pace among all vehicle categories during the forecast period.

Improved safety, stability, and drive control are some of the factors which may accelerate the growth of the market studied. Earlier, these systems were available only in high-end cars, but the introduction of small passenger cars and hybrid electric vehicles has increased global demand.

Emerging players in the automotive industry continuously focus on developing and improving each part associated with the AWD system to enhance the AWD performance and fuel economy further.

Automotive All-Wheel Drive Industry Segmentation

An all-wheel drive vehicle is one with a powertrain capable of providing power to all its wheels, whether full-time or on-demand. The most common forms of all-wheel drive are 44, Reflecting two axles with both wheels capable of being powered.

The automotive all-wheel-drive market has been segmented by Vehicle Type, Propulsion Type, System Type, and Geography. By vehicle type, the market is segmented into passenger cars and commercial vehicles. The market is segmented by propulsion type into ICE and electric vehicles. By system type, the market is segmented into manual AWD and automatic AWD. By geography type, the market is segmented into North America, Europe, Asia-pacific, and the rest of the world.

The report covers the market volume (Units) and revenue (USD Billion) for all the above segments.

Vehicle Type
Passenger Cars
Commercial Vehicles
Propulsion Type
ICE Vehicle
Electric Vehicle
System Type
Manual AWD
Automatic AWD
Geography
North America
United States
Canada
Rest of North America
Europe
Germany
United Kingdom
France
Russia
Rest of Europe
Asia-Pacific
India
China
Japan
South Korea
Rest of Asia-Pacific
Rest of the World
Middle-East and Africa
South America
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Automotive All-wheel-drive Market Size Summary

The automotive all-wheel-drive (AWD) market is poised for significant growth, driven by advancements in AWD technology and its integration into the expanding electric vehicle sector. The market experienced a downturn due to the COVID-19 pandemic, which led to reduced vehicle production and sales globally. However, as economic activities resumed, the market regained momentum. The increasing demand for improved safety, stability, and drive control features has expanded the adoption of AWD systems beyond high-end vehicles to include small passenger cars and hybrid electric vehicles. This trend is particularly pronounced in regions like North America and Europe, where cold weather conditions drive the need for enhanced on-road drivability. The Asia-Pacific region, with its booming luxury vehicle market, is expected to witness the fastest growth in AWD adoption.

The market is characterized by the presence of several key players, including BorgWarner Inc., Toyota Motor Corporation, and Nissan Motor Co. Ltd, who are actively investing in innovative technologies to maintain a competitive edge. The shift from complex mechanical systems to electronically controlled systems has been a significant trend, enhancing AWD performance and fuel economy. The growing popularity of SUVs, which often come equipped with AWD systems, is contributing to market expansion. Additionally, the deployment of AWD in electrified powertrain vehicles, such as hybrid and battery-electric cars, is anticipated to further drive market growth. Companies are also focusing on developing affordable AWD options to capture a broader customer base, as seen with the introduction of models like the Mahindra Thar in India.

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Automotive All-wheel-drive Market Size - Table of Contents

  1. 1. MARKET DYNAMICS

    1. 1.1 Market Drivers

    2. 1.2 Market Restraints

    3. 1.3 Porter's Five Forces Analysis

      1. 1.3.1 Threat of New Entrants

      2. 1.3.2 Bargaining Power of Buyers/Consumers

      3. 1.3.3 Bargaining Power of Suppliers

      4. 1.3.4 Threat of Substitute Products

      5. 1.3.5 Intensity of Competitive Rivalry

  2. 2. MARKET SEGMENTATION

    1. 2.1 Vehicle Type

      1. 2.1.1 Passenger Cars

      2. 2.1.2 Commercial Vehicles

    2. 2.2 Propulsion Type

      1. 2.2.1 ICE Vehicle

      2. 2.2.2 Electric Vehicle

    3. 2.3 System Type

      1. 2.3.1 Manual AWD

      2. 2.3.2 Automatic AWD

    4. 2.4 Geography

      1. 2.4.1 North America

        1. 2.4.1.1 United States

        2. 2.4.1.2 Canada

        3. 2.4.1.3 Rest of North America

      2. 2.4.2 Europe

        1. 2.4.2.1 Germany

        2. 2.4.2.2 United Kingdom

        3. 2.4.2.3 France

        4. 2.4.2.4 Russia

        5. 2.4.2.5 Rest of Europe

      3. 2.4.3 Asia-Pacific

        1. 2.4.3.1 India

        2. 2.4.3.2 China

        3. 2.4.3.3 Japan

        4. 2.4.3.4 South Korea

        5. 2.4.3.5 Rest of Asia-Pacific

      4. 2.4.4 Rest of the World

        1. 2.4.4.1 Middle-East and Africa

        2. 2.4.4.2 South America

Automotive All-wheel-drive Market Size FAQs

The Automotive All-wheel-drive Market is projected to register a CAGR of greater than 7.5% during the forecast period (2024-2029)

BorgWarner Inc., Toyota Motor Corporation, JTEKT Corporation, Nissan Motor Co., Ltd. and Continental AG are the major companies operating in the Automotive All-wheel-drive Market.

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