[220 Pages Report] The automotive differential market is estimated to grow from USD 20.0 billion in 2022 and reach USD 23.7 billion by 2027, at a CAGR of 3.5%. The growth of the automotive differential market includes the advanced comfort and automatic safety features premium SUVs offer and the benefits like better maneuverability, larger space, and better comfort compared with sedans, which are drawing the consumer inclination towards SUVs in developing and developed countries. On the other hand, as heavy-duty engine demand is growing in construction and infrastructure projects, there is a tremendous growth opportunity for the differential in the heavy trucks segment. Rising farm mechanization level leads to agricultural tractors, rapid urbanization, and growing e-commerce and logistics activities boosted the forklift market. Subsequently, growth in these off-highway vehicles would bring immense growth potential to the differential manufacturers for this segment
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The demand for heavy commercial and light commercial vehicles has increased globally in recent years due to increased logistics and transportation activities, industrialization, rising e-commerce demand, and the growing economic growth of developed and developing countries. Asia Pacific dominates the heavy trucks market contributing around ~79% of total global demand. The growth is mainly driven by rising industrialization, infrastructure development, and manufacturing growth in these countries, and demand is expected to remain strong in the future. The demand for light commercial vehicles and heavy trucks is expected to increase, ultimately creating the demand for the automotive differential in the coming years.
Most heavy trucks are rear-wheel drives, and in some models, it comes with all-wheel drive/4WD drive options such as 4x4, 6x4, 8x4, 8x6, etc. The differentials in commercial vehicles are always fitted on live/drive axles. Hence, the number of drive axles is directly proportional to the number of differentials used in vehicles. FWD and RWD require one differential, whereas, in all-wheel drive/ 4-wheel drive, there is a requirement of 2-3 differential owing to the high number of live axles. Commercial vehicle manufacturers such as Volvo Trucks, EZ Trac, and Tata Motors are producing 4WD and AWD heavy commercial vehicles. Some heavy commercial trucks with AWD/4WD systems are Tata Novus, Volvo FMX, and Freightliner M2.
Thus, demand for automotive differentials would simultaneously increase with the growing market of heavy trucks with AWD/4WD systems across all regions. This will create an opportunity for the automotive differential in the heavy-duty commercial vehicle segment.
Electric vehicles use differentials that are different from the traditional mechanical differential used in traditional ICE vehicles as these are heavy-weight and unsuitable for EVs. Usually, automatic limited-slip, automatic locking, and electronically selectable locking differentials are used in electric vehicles. These differentials work with command signals from the steering wheel, throttle position, and motor speed. This helps supply each wheel with desired torque to provide adequate power. Thus, rising EV adoption may negatively impact the market growth of traditional differential suppliers for ICE vehicles.
The rise in electric and hybrid vehicle sales has created a demand for various electrical components such as electrical differentials, traction motors, electric motors, electric compressors, batteries, power electronics, and e-beam axles. In conventional vehicles, multi-speed transmission is required, whereas, in electric vehicles, single-speed transmission is used. The gearbox transfers the power from the electric motors to the wheels of the electric vehicle. In contrast, the differential used in electric vehicles provides variable torque to rotating wheels at different speeds during turning. Furthermore, the mechanical differential is getting replaced by an electronically controlled differential. Using electronic control unit, an electric limited slip differential can provide sufficient torque to different wheels of vehicles. This system is most suitable in a slippery road where the extra torque is required for the wheels with the most traction. The system offers better handling during high-speed curves and lane changes. For instance, Mitsubishi's Active Center Differential allows drivers to choose specific presets for driving on the road, gravel, and snow. American Axle & Manufacturing offers a portfolio of TracRite differentials that help enhance comfort and improve battery electric vehicles' performance, including pickup trucks and SUVs. Other global tier-1 suppliers such as Eaton, Dana Inc. and American Axle have started focusing and developing differentials for electric vehicles. Thus, with increasing electrification of the vehicle, the demand of differentials for electric vehicles would grow rapidly which subsequently lucrative business opportunities for differential suppliers by developing ELSD, automatic locking differentials, and torque-vectoring differentials etc. for the OEMs.
Established and prominent players such as Eaton Plc, Dana Inc., American Axle & Manufacturing Company, Linamar Corporation, and GKN driveline offer a wide range of differential products and other driveline components for the OE market. These companies are actively looking after sales service support for this product. With rise in passenger cars and heavy commercial vehicles the opportunity of automotive differential would also increase.
In addition to these established players some local and regional players such as Amtech International, Auburn Gear, and PowerTrax are also operating in automotive differential components for passenger cars, commercial vehicles, and buses. These local and regional players mainly focus on aftermarket demand of automotive differential, creating competition for established companies. Local or regional players offer differential and its component at a lower cost than well-established players, creating a challenge for developed/well-established companies. Similarly, increasing adoption of electric vehicles will replace the mechanical or traditional differential by electrical differential, which will impact the revenue of companies who manufacture mechanical differential for ICE vehicles.
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Heavy Trucks are projected to register the fastest growth rate for automotive differential under the review period. These trucks carry heavy loads and require the best pulling capacity, and the drivers must achieve better control over the vehicle than passenger cars. Differential installed in trucks varies based on trucks' axle configuration, and the number of differentials depends upon the number of live axles in trucks. Due to this, every heavy truck is rear-wheel drive, and most trucks and semi-trailers up to 25-30 tons is a rear-wheel drive configuration. Additionally, few OEMs, such as Freightliner, Acela Truck, Mercedes Benz, Volvo, and MAN Trucks, among others, are offering 4WD/AWD trucks in Europe and North American countries. Hence, rising industrialization and growing e-commerce and logistics activities will boost the heavy trucks and differentials market simultaneously for this segment
Plug-in hybrid vehicles are estimated to hold the largest share of the electric & hybrid vehicle differential market. The plug-in hybrid fulfills the gap between ICE and electric cars with optimum fuel performance and improved performance with substantial comfort and safety features. Major PHEV manufacturers such as Toyota Motor Corporation (Japan), Volkswagen AG (Germany), Mercedes-Benz (Germany), BMW Group (Germany), Mitsubishi Motors (Japan), BYD Company Ltd. (China), Li Auto (China), have launched several plug-in hybrid SUVs that have a high demand in the market. Toyota RAV4 was the best-selling PHEV outside China, followed by Mitsubishi Outlander in 2021. These plug-in hybrid SUVs and premium cars are RWD or AWD/4WD and are usually installed with open differentials and have an installation rate of ELSD and torque vectoring differentials. The RAV4 Hybrid and 2019 Prius AWD are some models equipped with an advanced AWD-i system to secure handling in slippery conditions. Thus, with the expected upcoming PHEVs promised by leading European and American OEMs, the market for differentials from PHEVs is expected to boost.
Two-wheel drive tractors lead the differential market for this segment owing to the high demand of small tractors in major countries, China, India, and the USA. These countries have small farming land and lower mechanization rates, especially in China and India, due to which two-wheel drive tractors are highly preferred. Two-wheel drive tractors are installed with a single unit of differential. With lack of skilled farm labor, increasing labor costs, and a rising need for operational efficiency and profitability are expected to drive the differentials in the two-wheel drive tractors segment.
The market growth in Asia Pacific countries such as China, Japan, and India can be attributed to the increasing demand for vehicles owing to changing consumer preferences, increasing per capita income of the middle-class population, and cost advantages to global OEMs. Due to the increased vehicle production and sales, China is estimated to be the largest market for automotive differentials. As demand for passenger cars is growing, the consumer preference for comfort and advanced safety features has increased. Further, OEMs in this region offer SUVs and medium to premium range sedan cars at competitive pricing, which resulted in shifting consumer preference towards feature-rich vehicles at a higher price tag. Further, the demand for heavy commercial vehicles has also increased due to increasing government infrastructure spending, growing road, construction, and real estate investments, and increasing e-commerce activities. Thus, rising vehicle production and consumer inclination for advanced safety and comfort features will bring more lucrative growth opportunities for automotive differential market in the coming years.
GKN Driveline (UK), Eaton Plc (Ireland), American Axle & Manufacturing Company (US), Dana Incorporation (US), Linamar Corporation (Canada) and BorgWarner Inc. (US). These companies adopted new product launches and expansion to gain traction in the automotive differential market
|Market size available for years||2018–2027|
|Base year considered||2021|
|Forecast units||Value (USD Million/Billion)|
|Segments covered||By Differential Type (ICE), By Drive Type (ICE), By Vehicle Type (ICE), By Component (OE & Aftermarket), Electric & Hybrid Vehicle (By Differential Type & EV Type), Off-Highway, By Equipment Type and Region|
|Geographies covered||Asia Pacific, Europe, North America, and ROW|
|Companies covered||GKN Driveline (UK), Eaton Plc (Ireland), American Axle & Manufacturing Company (US), Dana Incorporation (US), BorgWarner Inc. (US), Linamar Corporation (Canada), Schaeffler AG(Germany), JTEKT Corporation (Japan), ZF (Germany), and Hyundai Wia Corporation (South Korea)|
This report categorizes the automotive differential market based on Differential Type, Drive Type, Vehicle Type, Component, Electric & Hybrid Vehicle differential By Differential Type, Component (Aftermarket), Off-highway differential market By Equipment Type, and Region.
What is the current size of the global automotive differential market?
The global automotive differential market is estimated to be USD 20.0 billion in 2022, with Asia Pacific dominating the market.
Which differential type is currently leading the automotive differential market?
Open differential segment is leading differential type in the automotive differential market.
Many companies are operating in the automotive differential market space across the globe. Do you know who are the front leaders, and what strategies have been adopted by them?
GKN Driveline, Eaton Pl, American Axle & Manufacturing Company, Dana Incorporation, BorgWarner Inc and Linamar Corporation. These companies adopted new product launches and expansion strategies to gain traction in the automotive differential market.
How is the demand for differential varies by region?
Asia Pacific is estimated to be the largest market for automotive differential. The Asia Pacific region has emerged as a hub for automotive production in recent years. Europe and North America are also expected to grow at a decent pace during the forecast period due to the increasing demand of luxury and premium vehicles with AWD/4WD drive system in the region.
What factors would drive the aftermarket demand?
Rising average vehicle driven range would create more wear and tear of differential components such as differential bearings, seals, and gears. To prevent the considerable damage, it needs to be replaced over fixed interval of time which will create aftermarket demand for differential component.
What are the revenue shifts which would be observed be observed in this market?
Rising sales of electric vehicles would create the demand for electronically controlled differential for EVs. Advancement in differential technology would create the demand for electric limited slip differential and torque-vectoring differential.
What are the drivers and opportunities for the automotive differential manufacturer?
Rising sales of passenger cars and heavy trucks, increasing demand of luxury and premium SUVs and Cars, advancements in mobility solutions and increase in demand of electric vehicles. .
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TABLE OF CONTENTS
1.2 MARKET DEFINITION
1.2.1 INCLUSIONS & EXCLUSIONS
1.3 MARKET SCOPE
1.3.1 YEARS CONSIDERED IN THE STUDY
1.4 SUMMARY OF CHANGES
2 RESEARCH METHODOLOGY
2.1 RESEARCH DATA
2.2 SECONDARY DATA
2.2.1 KEY SECONDARY SOURCES FOR VEHICLE PRODUCTION AND ELECTRIC VEHICLE SALES
2.2.2 KEY SECONDARY SOURCES FOR MARKET SIZING
2.2.3 KEY DATA FROM SECONDARY SOURCES
2.3 PRIMARY DATA
2.3.1 SAMPLING TECHNIQUES & DATA COLLECTION METHODS
2.3.2 PRIMARY PARTICIPANTS
2.4 MARKET SIZE ESTIMATION
2.4.1 BOTTOM-UP APPROACH
2.4.2 TOP-DOWN APPROACH
2.4.3 FACTOR ANALYSIS FOR MARKET SIZING: DEMAND AND SUPPLY SIDE
2.5 MARKET BREAKDOWN AND DATA TRIANGULATION
2.6 FACTOR ANALYSIS
2.7 ASSUMPTIONS & ASSOCIATED RISKS
2.8 RESEARCH LIMITATIONS
3 EXECUTIVE SUMMARY
3.2 REPORT SUMMARY
4 PREMIUM INSIGHTS
5 MARKET OVERVIEW
5.2 MARKET DYNAMICS
5.3 TRENDS/DISRUPTIONS IMPACTING BUYERS
5.4 AUTOMOTIVE DIFFERENTIAL MARKET SCENARIO
5.4.1 REALISTIC SCENARIO
5.4.2 LOW-IMPACT SCENARIO
5.4.3 HIGH-IMPACT SCENARIO
5.5 PORTER’S FIVE FORCES ANALYSIS
5.5.1 THREAT OF SUBSTITUTES
5.5.2 THREAT OF NEW ENTRANTS
5.5.3 BARGAINING POWER OF BUYERS
5.5.4 BARGAINING POWER OF SUPPLIERS
5.5.5 INTENSITY OF COMPETITIVE RIVALRY
5.6 AUTOMOTIVE DIFFERENTIAL MARKET ECOSYSTEM
5.7 SUPPLY CHAIN ANALYSIS
5.8 AVERAGE PRICE TREND
5.8.1 BY REGION
5.9 CASE STUDY ANALYSIS
5.10 TRADE ANALYSIS
5.11 PATENT ANALYSIS
5.12 KEY CONFERENCES & EVENTS IN 2022-2023
5.13 KEY STAKEHOLDERS & BUYING CRITERIA
5.14 REGULATORY LANDSCAPE
5.15 TECHNOLOGY TRENDS
6 AUTOMOTIVE DIFFERENTIAL OE MARKET, BY DIFFERENTIAL TYPE (ICE)
6.1.1 RESEARCH METHODOLOGY
6.1.3 INDUSTRY INSIGHTS
6.2 OPEN DIFFERENTIAL
6.3 LOCKING DIFFERENTIAL
6.4 LIMITED SLIP DIFFERENTIAL
6.5 ELECTRONIC LIMITED SLIP DIFFERENTIAL
6.6 TORQUE-VECTORING DIFFERENTIAL
Note: The chapter represents OE market for On-highway (ICE) Vehicles (Passenger Cars, Light Commercial Vehicles, Trucks and Buses).. The chapter would be provided in terms of volume & value at regional level (Asia Pacific, Europe, North America, and Rest of World)
7 AUTOMOTIVE DIFFERENTIAL OE MARKET, BY DRIVE TYPE (ICE)
7.1.1 RESEARCH METHODOLOGY
7.1.3 INDUSTRY INSIGHTS
7.2 FRONT WHEEL DRIVE
7.3 REAR WHEEL DRIVE
7.4 ALL WHEEL DRIVE/FOUR WHEEL DRIVE
Note: The chapter represents OE market for On-highway (ICE) Vehicles (Passenger Cars, Light Commercial Vehicles, Trucks and Buses). The chapter would be provided in terms of volume & value at regional level (Asia Pacific, Europe, North America, and Rest of World)
8 AUTOMOTIVE DIFFERENTIAL OE MARKET, BY VEHICLE TYPE (ICE)
8.1.1 RESEARCH METHODOLOGY
8.1.3 INDUSTRY INSIGHTS
8.2 PASSENGER CAR
8.3 LIGHT COMMERCIAL VEHICLE
Note: The chapter represents market for On-highway (ICE) Vehicles. The chapter would be provided in terms of volume & value at regional level (Asia Pacific, Europe, North America, and Rest of World).
9 ELECTRIC & HYBRID DIFFERENTIAL OE MARKET, BY EV TYPE
9.1.1 RESEARCH METHODOLOGY
9.1.3 INDUSTRY INSIGHTS
Note The chapter represents market for On-highway (Electric & Hybrid) Vehicles. The chapter would be provided in terms of volume & value at regional level (Asia Pacific, Europe, North America, and Rest of World)
10 ELECTRIC & HYBRID DIFFERENTIAL OE MARKET, BY DIFFERENTIAL TYPE
10.1.1 RESEARCH METHODOLOGY
10.1.3 INDUSTRY INSIGHTS
10.2 OPEN DIFFERENTIAL
10.3 LOCKING DIFFERENTIAL
10.4 LIMITED SLIP DIFFERENTIAL
10.5 ELECTRONIC LIMITED SLIP DIFFERENTIAL
10.6 TORQUE-VECTORING DIFFERENTIAL
Note The chapter represents market for Electric & Hybrid Vehicle (Passenger Cars (BEV, PHEV, and FCEV). The chapter would be provided in terms of volume & value at regional level (Asia Pacific, Europe, North America, and Rest of World)
11 AUTOMOTIVE DIFFERENTIAL OE MARKET, BY COMPONENT
11.1.1 RESEARCH METHODOLOGY
11.1.3 INDUSTRY INSIGHTS
11.2 DRIVE PINION
11.2 DIFFERENTIAL HOUSING
11.3 SIDE GEAR
11.4 RING GEAR
11.5 DIFFERENTIAL BEARINGS
Note: The chapter represents market for On-highway (ICE) Vehicles (Passenger Cars, Light Commercial Vehicles, Trucks and Buses). The chapter would be provided in terms of volume at regional level (Asia Pacific, Europe, North America, and Rest of World)
12 AUTOMOTIVE DIFFERENTIAL AFTERMARKET, BY COMPONENT
12.1.1 RESEARCH METHODOLOGY
12.1.3 INDUSTRY INSIGHTS
12.2 DIFFERENTIAL BEARING
12.3 DIFFERENTIAL GEAR
12.4 DIFFERENTIAL GASKETS
12.5 DIFFERENTIAL SEALS
Note: The chapter represents market for On-highway (ICE) Vehicles (Passenger Cars, Light Commercial Vehicles, Trucks and Buses). The chapter would be provided in terms of volume & value at regional level (Asia Pacific, Europe, North America, and Rest of World)
13 AUTOMOTIVE DIFFERENTIAL OE MARKET, BY OFF-HIGHWAY VEHICLE TYPE
13.1.1 RESEARCH METHODOLOGY
13.1.3 INDUSTRY INSIGHTS
13.2 AGRICULTURE TRACTORS
Note: The chapter represents market for off-highway (ICE) based on production. The chapter would be provided in terms of volume & value at regional level (Asia Pacific, Europe, North America, and Rest of World)
14 AUTOMOTIVE DIFFERENTIAL OE MARKET, BY REGION (ICE)
14.1.1 RESEARCH METHODOLOGY
14.1.3 INDUSTRY INSIGHTS
14.2 ASIA PACIFIC
14.2.4 SOUTH KOREA
14.2.6 REST OF ASIA PACIFIC
14.3.8 REST OF EUROPE
14.4 NORTH AMERICA
14.4 REST OF THE WORLD
14.4.3 REST OF ROW
Note: The chapter represents market for On-highway (ICE) Vehicles (Passenger Cars, Light Commercial Vehicles, Trucks and Buses). The chapter would be covered in terms of volume and value
16 COMPETITIVE LANDSCAPE
16.2 AUTOMOTIVE DIFFERENTIAL MARKET SHARE ANALYSIS, 2021
16.3 REVENUE ANALYSIS OF TOP LISTED/PUBLIC PLAYERS
16.4 COMPETITIVE EVALUATION QUADRANT-DIFFERENTIAL SUPPLIER
16.4.3 EMERGING LEADERS
16.5 COMPETITIVE EVALUATION QUADRANT- DIFFERENTIAL COMPONENT SUPPLIER
16.5.3 EMERGING LEADERS
16.6 COMPETITIVE SCENARIO
16.6.1 NEW PRODUCT LAUNCHES
16.7 KEY PLAYER STRATEGIES/RIGHT TO WIN, 2018–2022
16.8 COMPETITIVE BENCHMARKING
17 COMPANY PROFILES
17.1 AUTOMOTIVE DIFFERENTIAL MARKET - KEY PLAYERS
(Business overview, Recent Financials, Products offered, Recent Developments, MNM view (for top 5 companies)) *
*Details on Business overview, Recent Financials, Products offered, Recent Developments, MNM view might not be captured in case of unlisted companies.
17.1.3 AMERICAN AXLE & MANUFACTURING INC.
17.1.4 DANA LIMITED
17.1.5 BORGWARNER INC.
17.1.6 LINAMAR CORPORATION
17.1.7 SCHAEFFLER AG
17.1.8 JTEKT CORPORATION
17.1.9 ZF FRIEDRICHSHAFEN AG
17.1.17 HYUNDAI WIA CORPORATION
17.2 AUTOMOTIVE DIFFERENTIAL MARKET – ADDITIONAL PLAYERS
Companies in this section would include Founded year, Headquarter city & country, ownership, total revenue, employee count, business overview. Product/solutions offered, and geographical presence as per information availability on public domain
17.2.2 NSK LTD
17.2.3 BHARAT GEARS LTD
17.2.4 NEAPCO HOLDINGS LLC
17.2.5 MAGNA INTERNATIONAL INC.
17.2.6 AUBURN GEAR
17.2.11 JIANGSU PACIFIC PRECISION FORGING CO., LTD
17.2. 12 COMMERCIAL GEAR & SPROCKET COMPANY, INC.
17.2.13 AMTECH INTERNATIONAL
17.2.14 MERITOR INC.
17.2.15 SHOWA CORPORATION
18.1 KEY INSIGHTS OF INDUSTRY EXPERTS
18.2 DISCUSSION GUIDE
18.3 KNOWLEDGE STORE: MARKETSANDMARKETS SUBSCRIPTION PORTAL
18.4 RELATED REPORTS
18.5 AUTHOR DETAILS
The study involves four main activities to estimate the current size of the automotive differential market. Exhaustive secondary research was done to collect information on the market, such as differential type, drive types and differential components. The next step was to validate these findings, assumptions, and market analysis with industry experts across value chains through primary research. Bottom-up approach was employed to estimate the complete market size for different segments considered under this study. Thereafter, market breakdown and data triangulation processes were used to estimate the market size of segments and subsegments.
Secondary sources referred to in this research study include international automotive differential manufacturer organizations and published articles; corporate filings (such as annual reports, investor presentations, and financial statements); and trade, business, and automotive associations. The secondary data was collected and analyzed to arrive at the overall market size, which is further validated by primary research.
Extensive primary research has been conducted after acquiring an understanding of the automotive differential market scenario through secondary research. Several primary interviews have been conducted with market experts from both the demand- (OEMs) and supply-side (differential manufacturers) across major regions, namely, North America, Europe, Asia Pacific, and Rest of the World. Approximately 10% and 90% of primary interviews have been conducted from the demand and supply sides, respectively. Primary data has been collected through questionnaires, emails, and telephonic interviews. In the canvassing of primaries, we have strived to cover various departments within organizations, such as sales, operations, and marketing, to provide a holistic viewpoint in our report.
After interacting with industry participants, we conducted brief sessions with highly experienced independent consultants to reinforce the findings from our primaries. This, along with the opinions of the in-house subject-matter experts, led us to the findings as described in this report.
To know about the assumptions considered for the study, download the pdf brochure
The bottom-up approach has been used to estimate and validate the size of the automotive differential market. The market size, by volume, of the automotive differential market has been derived by identifying the country-wise usage pattern of front vs. rear vs. of all-wheel drive type as well as share of various type of differentials installed in each vehicle type. This data is mapped for each country under the scope of the study and by vehicle type. The number of units fitted in each country is added to derive the regional market size, in terms of volume. The market size, by value, has been arrived by multiplying the average selling OE price of differential for each vehicle type at country level. Summation of country level market gives regional level and further global automotive differential market, by differential, vehicle, and drive type in terms of value. Similarly, OE market, by components, hybrid vehicle differential market, by vehicle type and differential type, and aftermarket have been analysed in terms of volume and value
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Note: Asia Pacific: China, India, Japan, South Korea, Thailand, and others; Europe (France, Germany, Russia, Spain, Turkey, the UK, and others); North America (Canada, Mexico, the US) and RoW (Iran, Brazil, and others)
Note: Asia Pacific includes China, Japan, India, and South Korea; Europe includes Germany, France, Sweden, Spain, UK, Netherlands, and Norway; North America includes US and Canada)