Market Trends of Automotive Differential Industry
Passenger Car Holds the Highest Share in the Market
Passenger cars have gained immense popularity among drivers over the past few years due to features such as stylish design, compact size, and economic value. Passenger cars are the most common mode of transportation in numerous advanced countries. The improving lifestyles, increasing power purchase parity disposable income, raising brand awareness, and improving the economy are leading to customer preference changes across the globe, resulting in high sales of passenger cars.
According to the Society of Indian Automobile Manufacturers, sales of passenger cars increased from 14,67,039 to 17,47,376 units during 2022-2023.
Moreover, with the increase in global demand, electric car sales have grown exponentially due to falling costs, improving technology, and government support, contributing to passenger car growth. For instance, according to the International Energy Agency, over 2.3 million electric cars were sold in the first quarter of 2023, about 25% more than in the same period last year.
Also, a rise in the demand for sports utility vehicles (SUVs) creates profitable opportunities for the market players. It acts as a significant driving factor for the global passenger car market growth.
The differential, which helps send power to the shafts, is witnessing exponential growth with the high demand for passenger cars and a rise in demand for advanced features. The companies are working to launch new models and technological advancements to cater to the market. For instance,
In November 2023, Toyota filed a patent application for a variable limited-slip differential that can change its characteristics based on the driving environment using a new kind of differential consisting of a casting that contributes to the market growth.
Asia-Pacific Holds the Highest Share in the Market
Asia-Pacific is expected to grow significantly over the coming years. The demand for automotive differential in the area is mainly supported by increasing sales of passenger and commercial vehicles across China, India, and other countries. Various automakers invest in developing new technologies for autonomous, hybrid, and electric cars, positively impacting the market.
It will also result in new market opportunities for the automotive differential industry. For instance, in April 2023, Modern Automotives, an Indian motor vehicle parts manufacturing company, got approval to deliver a differential pinion shaft to BMW AG.
The Government of India is also encouraging the use of electric vehicles. By the end of 2035, the government will convert all fuel-run vehicles into whole or semi-electric-run vehicles. The automotive differential market in India is expected to have a bright future due to government policies such as the 'Make in India' initiative to improve the manufacturing sector. Automotive component manufacturers invest more in India through various investments or new regional product launches.
With positive manufacturing growth in the automotive components in Asia-Pacific, the automotive manufacturers are focusing on expanding their differential production as the market is utilized in electric and gasoline vehicles and is experiencing a huge demand.
In March 2024, Sona BLW Precision Forgings Ltd, a provider of differential solutions, reached production milestones for producing 400 million differential gears and 6 million differential assemblies to cater to the market demand of countries like India and China, contributing to the market growth.
