by The all-wheel drive market comprises a wide range of technology that distributes power from the engine to all four wheels on a vehicle. AWD vehicles provide improved traction and control over different road conditions compared to two-wheel drive vehicles. The increasing demand for luxury, performance, and SUV vehicles around the world has significantly driven the adoption of AWD systems. Safety and control advantages especially in severe weather conditions have further encouraged automakers to introduce AWD options across various segments.
The Global All Wheel Drive Market is estimated to be valued at US$ 65.27 Bn in 2024 and is expected to exhibit a CAGR of 7.9% over the forecast period 2024 to 2031.
Key players operating in the all-wheel drive market are AB Volvo, American Axle & Manufacturing, Inc., BorgWarner Inc., Continental AG, Dana Incorporated, GKN Plc, Honda Motor Company Ltd., JTEKT Corporation, Magna International Inc., Nissan Motor Co., Ltd.,, Tesla, Inc., Valeo SA, ZF Friedrichshafen AG.
Key Takeaways
Key players: Key players in the All Wheel Drive Market Demand include global automakers like AB Volvo, Nissan Motor Co. and Honda Motor Company focusing on bringing AWD technology to mainstream segments. Component suppliers like BorgWarner Inc., Dana Incorporated and GKN Plc are partnering with OEMs on innovative driveline solutions.
Growing demand: Increasing demand for luxury, performance and SUV vehicles particularly in regions like North America and Europe has significantly boosted the adoption of AWD systems in passenger cars. Off-road capabilities have widened the addressable market.
Global expansion: Leading automakers are expanding their AWD offerings to emerging markets of Asia Pacific and Latin America to leverage growing purchasing power. Localization strategies by component suppliers will further aid penetration in high volume markets.
Market Key Trends
One of the major trends in the all-wheel drive market is the introduction of dynamic torque vectoring technology. This allows automakers to optimize torque distribution between the rear wheels for improved handling, traction and stability especially during cornering. Systems like active torque vectoring and torque vectoring differential help deliver a more engaging driving experience. As dynamic torque control becomes mainstream, it will be a key driver of innovation and adoption of AWD globally over the forecast period.
Porter’s Analysis
Threat of new entrants: New companies entering the market would require large investments in manufacturing facilities, distribution networks and branding to successfully compete in an already established market.
Bargaining power of buyers: Buyers have moderate bargaining power as there several well established brands to choose from however individual consumers have less influence over prices due to bulk purchases by car manufacturers.
Bargaining power of suppliers: Parts suppliers have moderate bargaining power due to the need to source from a few specialized component makers however manufacturers can switch sources to negotiate better prices.
Threat of new substitutes: Alternatives like front-wheel drive and rear-wheel drive vehicles pose a potential threat, though all-wheel drive provides better traction making it difficult to fully substitute.
Competitive rivalry: Competition is intense as major automakers aggressively promote the advantages of all-wheel drive systems for performance and safety.
North America dominates the global market with the highest all-wheel drive vehicle sales, owing to increasing demand and adoption in the growing SUV and crossover vehicle categories, especially in the US. Europe is the second largest regional market led by Germany, UK, France, and Italy, driven by increasing consumer preference for AWD vehicles’ improved handling capabilities. Asia Pacific is expected to be the fastest growing regional market over the forecast period with rising vehicle production and sales in China, India, and Japan.
The global all-wheel drive market is anticipated to witness fastest growth in the Asia Pacific region during the forecast period. This is attributed to rising disposable income, growing middle class population and their increasing preference for AWD vehicles in China, India and other developing Asian countries. Increasing sales of luxury and high-performance all-wheel drive sedans, SUVs and crossovers in Asia’s emerging automotive markets will further drive the regional market growth between 2024 to 2031.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
