All Wheel Drive Market is Anticipated to Witness High Growth Owing to Growing Demand

Author : Leena Shedmake | Published On : 22 Apr 2024

The all-wheel drive market involves the distribution of torque to all the wheels of a vehicle using a transfer case or other means. All-wheel drive vehicles provide advantages such as enhanced traction, stability, and control in difficult road conditions and accidents. The growing demand for vehicles with enhanced safety, control, and performance on various terrains is driving the adoption of all-wheel drive systems. The popularity of crossover SUVs and luxury sport utility vehicles that commonly use all-wheel drive technology is also augmenting market growth.

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 Takeaways

Key players operating in the All Wheel Drive Market Growth 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. These players are focusing on developing advanced torque vectoring and traction control technologies to gain a competitive edge.

The key opportunities in the all-wheel drive market include the rising demand for luxury and performance vehicles and expanding sales of SUVs and crossovers across major markets such as North America, Europe, and Asia Pacific. All-wheel/four-wheel drive models account for over 50% of luxury SUV sales worldwide.

Global expansion of leading automotive companies into emerging economies will also contribute to the growth of the all-wheel drive market. As disposable incomes rise in developing nations, demand for higher specification vehicles with enhancements like all-wheel drive systems is increasing rapidly. This will encourage international vendors to expand their local production and supplier networks in these regions.

Market Drivers: Growing demand for high-performance sports and luxury vehicles with features ensuring maximum control is a major market driver. Increasing consumer preference for SUVs and crossover vehicles that mainly use AWD technology is boosting the market.

Market Restraints: Higher complexity and production cost of all-wheel drive systems compared to two-wheel drive vehicles act as a market restraint. Dependence on various component suppliers and management of complex supply chains can also hamper efficient manufacturing of all-wheel drive components.

Segment Analysis
The All-wheel drive market is dominated by the Passenger Cars sub segment. All wheel drive is gaining popularity in passenger cars as it provides better traction, control and safety on slippery surfaces. Most luxury and premium passenger vehicles now come equipped with all wheel or four wheel drive as standard. This is driving the growth of the passenger cars sub segment of the AWD market.

The sports utility vehicles (SUVs) sub segment is also gaining traction in the AWD market. increasing demand for SUVs globally especially in the US and European markets is boosting the adoption of all wheel or four wheel drive system in SUVs. SUVs with AWD functionality offer an optimal combination of off-road capabilities and on-road handling stability which is appealing to many customers.

Global Analysis

The Asia Pacific region is projected to grow at the highest CAGR during the forecast period. Factors such as rising safety concerns, increasing demand for premium and luxury vehicles, growing infrastructure and economic development are driving the demand for AWD vehicles in emerging countries of Asia such as China and India. Original Equipment Manufacturers are also focusing on expanding their production capacities in these countries to cater to the rising local demand.

North America currently dominates the global AWD market owing to high demand for SUVs and pickup trucks integrated with AWD. Countries like US and Canada witness heavy snowfall during winters creating high demand for vehicles with superior traction and handling capabilities. However stringent emission regulations may impact growth to some extent in the coming years.

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