Two main types of automotive transmissions are manual and automatic. Vehicle transmission technology is the most important process in the manufacture of a car. The transmission in vehicles allows the flow of power from the engine to the wheels, which guarantees the movement of the vehicle. The growing production of vehicles and the growing demand for hybrid vehicles are the main factors driving the growth of the outsourced vehicle transmission market. The concern for the safety of the environment has increased due to the enormous pollution caused by the emission of gasoline and diesel vehicles. The global outsourcing market for automotive transmission services is estimated at $9.81 billion in 2018 and is expected to grow to a CAGR of 5.68% during the forecast period.
Market value and expected growth:
The global outsourcing market for Automotive Transmission Engineering Services is expected to grow to a CAGR of 5.67% during the forecast period and reach $12.92 billion by 2026, from an estimated $9.81 billion in 2021 Car sales lead to strict emission standards and the introduction of new technologies, such as hybrid transmissions, is driving the market for the outsourcing of vehicle transmission technology. It is estimated that the Asia-Pacific region represents the largest part of the global market for outsourcing of vehicle transmission services. However, at the national level, Germany is the largest market for such services due to its advanced technological infrastructure and the presence of luxury vehicle manufacturers such as Mercedes-Benz, BMW, Volkswagen, and Audi.
Market drivers and restrictions:
Growing environmental problems are causing governments in several countries to motivate car manufacturers to develop environmentally-friendly vehicles. The governments of several countries are motivating automotive companies with tax exemptions and subsidies to ensure that all vehicles manufactured to meet the strict standards of CO2 emissions. This is driving demand for hybrid vehicles, which in turn drives the growth of the global automotive transmission services market. In addition, the increase in fuel prices is also an important reason for the growth of hybrid vehicles. As a result, automakers are focusing heavily on their R & D capabilities to develop fuel-efficient and environmentally friendly vehicles that drive the growth of the automotive transmission market.
One of the main obstacles that inhibit the growth of this market is the high cost associated with hybrid transmission systems. Hybrid vehicle technology is undoubtedly sophisticated and advanced, but the costs of research and development, as well as manufacturing costs for companies, are extremely high compared to the production of conventional vehicles. However, one should also bear in mind that light hybrids and other hybrids (excluding pure hybrid vehicles) with a single engine and less sophisticated clutch system are relatively cheap compared to pure hybrid vehicles. The high costs of manufacturing and development are transferred to the end-users, which makes the vehicles expensive and less accessible for most consumers. In addition to lower affordability, there is also the availability of hybrid vehicles in many parts of the world. Due to the lack of demand for hybrid vehicles, automakers are skeptical about the establishment of new hybrid vehicle production units in new areas. The demand for hybrid vehicles is very low in many countries in the Asia-Pacific region and in Africa.
By Service Type:
By Transmission Type:
In the automotive transmission engineering services outsourcing market, Asia Pacific holds the largest market share in terms of revenue followed by North America, Europe, Latin America and, Middle East, and Africa (MEA). In the Asia Pacific region, countries such as China and India has been witnessing heavy demand and production for passenger vehicles. This, in turn, is motivating the growth for automotive transmission engineering services outsourcing market in the region. The market in North America and Europe tends to be a bit saturated, but the market is expected to remain stable during the forecast period. By the end of the forecast period, the Middle East and Africa, and Latin America are expected to show significant growth, considering the growth in the automotive sector and rising demand for passenger and commercial vehicles in the regions.
The key players in the automotive transmission engineering services outsourcing market include AVL (Austria), FEV GmbH (Germany), IAV GmbH (Germany), Ricardo Plc (U.K.), Intertek Group Plc (U.K.), Porsche Engineering (Germany), Tata Consultancy Services Limited (India), Magna International Inc. (Canada), Magneti Marelli S.p.A (Italy) and Horiba, Ltd. (Japan) among others.
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