Automotive Gearbox Market 2025 Updates: EV Gearbox Innovation Accelerates with Over 14 Million EV Sales

According to Towards Automotive consultants, the global automotive gearbox market is projected to reach approximately USD 113.84 Billion by 2034, increasing from USD 67.03 Billion in 2024, at a CAGR of 5.44% during the forecast period 2024 to 2034.

Ottawa, July 14, 2025 (GLOBE NEWSWIRE) -- The global automotive gearbox market size was valued at USD 70.67 Billion in 2025 and is expected to grow to USD 113.84 Billion in 2034, as noted in a study published by Towards Automotive, a sister firm of Precedence Research.

The automotive gearbox market is experiencing steady growth due to multiple factors, including high vehicle production, increased demand for passenger vehicles, rising demand for heavy commercial vehicles, and growing demand for automatic transmission systems.

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Key Highlights of the Automotive Gearbox Market

By region, Asia Pacific dominated the automotive gearbox market due to the presence of multiple automotive brands catering to the needs of the growing demand of automotive.
By region, Europe is observed to be growing at a notable pace due to technological advancements in the automotive gearbox market along with rising demand for EVs.
The automatic transmission segment dominated the automotive gearbox market due to the rising demand of people for a smooth and comfortable ride.
By fuel type, the ICE segment dominated the market due to a high preference for passenger cars with rising disposable incomes and improving the standard of living of people.

Market Overview & Potential: What to Expect in the Industry by 2034

The automotive gearbox is a mechanical component helpful in shifting power from the engine to the wheels of a vehicle for its movement. The component is essential for a vehicle for its smooth and barrier-free movement in different circumstances and terrains. The automotive gearbox market is observing a huge spike in its growth due to multiple reasons. High vehicle production, and high demand for automatic transmission, passenger cars, and EVs have also contributed to the growth of the market. The component is highly useful for the vehicle and holds huge importance.

The consumer preference has tilted towards automatic transmissions due to their capability to allow a vehicle’s smooth movement. Hence, such situations also help in the growth of the market. Heavy commercial vehicles also play a huge role in the growth of the automotive gearbox market. Such vehicles are highly utilized on a daily basis requiring timely maintenance directly helping in the growth of the market. Rising disposable income and improving the standard of living of people led to increasing demand for the passenger cars segment of the market leading to its growth as well. Hence, such factors contribute on a large scale helping in the automotive gearbox market growth.

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Rise of EVs: Major Potential for Automotive Gearbox Market

The rise of electric vehicles (EVs) is significantly contributing to the growth of the automotive gearbox market. In 2023 alone, over 14 million new electric cars were registered globally, which made up around 18% of all new car sales. This growing preference for EVs is also reflected in government support across various countries, where financial incentives and subsidies are provided to encourage EV adoption. As a result, the demand for specialized gearboxes, particularly single-speed reducers and multi-speed electric drive systems, has increased.

Unlike traditional internal combustion engine vehicles, EVs require different types of transmission systems optimized for electric motors. For instance, China is already leading in EV gearbox production, driven by its domestic EV boom, while India is rapidly scaling up manufacturing to support its expanding EV sector.

With more than 40 million electric vehicles already on the roads globally and the number continuing to climb, the need for efficient, lightweight, and high-performance EV gearboxes has become more critical than ever. This surge in demand is creating a substantial opportunity for automotive gearbox manufacturers to innovate and expand production to meet evolving drivetrain requirements.

New Trends in the Automotive Gearbox Market

The high demand for automatic transmissions is helping in the growth of the automotive gearbox market. People today prefer automatic transmissions for a smooth driving experience and hassle-free gear shift systems, helpful for the growth of the market.
The shift of people towards electric and hybrid vehicles is also contributing to the growth of the market. The growth of EVs is also helping in the growth of lightweight transmissions leading to the growth of the market.
The use of lightweight and durable materials for gearbox manufacturing is also helping in the growth of the automotive gearbox market. It helps in improving a vehicle’s performance and maintaining fuel efficiency.
Technological advancements in the manufacturing of gearboxes for vehicles are also fueling the growth of the market. Technologies such as continuously variable transmissions and intelligent manual transmissions are the highly paid attention points for gearbox manufacturing due to their high demand.

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Market Dynamics

What are Major Drivers of Automotive Gearbox Market?

There are multiple factors aiding the growth of the automotive gearbox market. The top factor helping in the growth of the market is the high demand for automatic transmissions by people today. People today prefer vehicles with automatic transmissions for a smooth and enhanced driving experience. Hence, the segment also dominated the market. The use of lightweight and durable materials for gearbox manufacturing is also helping the growth of the market.

It helps in the improvement of a vehicle’s performance and also makes a vehicle fuel efficient. Growing demand for EVs leading to high demand for transmissions in electric and hybrid vehicles is also helping the spread of the automotive gearbox market. Government initiatives for the high adoption of EVs are helping the growth of the market in many regions.

What are the challenges faced by Automotive Gearbox Market in its growth?

Issues in the supply of raw materials for the manufacturing of automotive transmissions are one of the major disruptions in the growth of the automotive gearbox market. It leads to delays in the manufacturing process of gearboxes for vehicles leading to delays in vehicle production as well.

Rising costs of raw materials along with other issues such as trade tensions and geopolitical issues are some of the other challenges observed in the growth of the market. The rising cost of advanced technologies also acts as a barrier to the growth of the automotive gearbox market. High costs of advanced manufacturing techniques and RD also interrupt the growth of the market.

Key Segments Automotive Gearbox Market:

By Gearbox Type

The Automatic Transmission (AT) Led the Market in 2024

The automatic transmission segment dominated the automotive gearbox market in 2024 due to its capability of providing a smooth driving experience, especially for long journeys. People today prefer AT in vehicles for long journeys as it allows them to experience smoother driving and hassle-free shift gear movement. Hence, the high demand for automobiles to cater to the demand of the growing population led to the growth in the demand of the AT segment as well. Hence, an amalgamation of all such factors helped in the growth of the automotive gearbox market as well.

The dual clutch transmission segment is observed to grow notably in the foreseen period due to its capability of smooth gear shift management and smoother driving experience. The feature helps in long journeys for a hassle-free drive. Hence, consumers these days are highly inclined towards the automotive feature helping in the growth of the automotive gearbox market. The feature also helps in making a vehicle fuel efficient along with keeping track of carbon emissions. Hence, the segment helps in the growth of the market in the foreseen period.

By Fuel Type

The Internal Combustion Engine (ICE) Segment dominated the Automotive Gearbox Market in 2024

The ICE segment dominated the market due to its high popularity and high availability of traditional fuel vehicles. Hence, the segment had a high inclination when EVs were not very familiar in the automotive industry. The traditional gearboxes were high in demand due to the high production of vehicles. Hence, the segment had a huge role in the growth of the market in 2024. The high popularity of passenger cars and light commercial vehicles due to their high usage in traveling and transportation of goods and commodities also helped to fuel the growth of the segment along with the growth of the market.

High demand for BEV in the forecast period is helping the growth of the automotive gearbox market. Today people prefer EVs more compared to ICEs. It helps in lowering the carbon footprint and is a huge step for a cleaner environment. Hence, governments of various regions are also promoting the use of BEVs and are also providing funds for the same. Hence, the high adoption of BEVs is helping in the growth of the segment along with the growth of the automotive gearbox market.

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By Vehicle Type

The SUV dominated the Market, whereas HCV to Grow Rapidly

The SUVs popularly known as passenger cars dominated the automotive gearbox market in 2024 due to their convenience and appealing looks helpful for the market’s growth. The rising incomes of people and improving standard of living led to a high demand for SUVs among the middle class helped in the growth of transmission production along with a higher demand for vehicle production. Hence, the segment helped in the growth of the market in 2024.

On the other hand, the HCV segment plays a huge role in the expansion of the market due to its capability to transport people, goods, and commodities of all domains from one place to another. Hence, their timely production and maintenance is essential. Due to its multiple uses for different types of domains, the segment is observed to grow at a notable pace in the forecast period. Hence, it has a huge role in the growth of the automotive gearbox market.

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Regional Analysis

Which Region Dominated the Automotive Gearbox Market in 2024?

Asia Pacific dominated and is observed to be growing notably in the foreseen period due to multiple factors contributing to the growth of the automotive gearbox market. Rising incomes of people, improving standard of living, and high demand for personal vehicles are some of the major reasons for the growth of the market in the region. Today people prefer to own a vehicle for their convenience leading to the growth of the market. Countries like India and China contribute at a higher rate with high vehicle production leading to the growth of the automotive gearbox market in the region.

China has positioned itself as a global leader in the gearbox market, leveraging its massive vehicle production capacity and strong emphasis on electric vehicle (EV) adoption. In addition, China’s well-developed supply chain and heavy investment in R&D allow for rapid deployment of advanced gearbox technologies. Domestic automakers and global joint ventures are also playing a crucial role in accelerating innovation and scaling production of high-efficiency gear systems.

What Factors Make Europe the Fastest Growing Region in the Market?

The rising demand for EVs in Europe is helping in the growth of the automotive gearbox market in the foreseen period. Government initiatives in the region for adopting EVs are also fueling the growth of the market. It helps in lowering carbon emissions and taking a step towards promoting a cleaner environment. High demand for specialized gearboxes compatible with EVs and hybrid vehicles leading to the expansion of the segment in the region has also helped in the growth of the automotive gearbox market in the foreseen period.

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Recent Developments in the Automotive Gearbox Market

In March 2025, the Toyota Fortuner Legender 4x4 launched its manual gearbox variant. The model was available with an automatic transmission providing power to the front wheels only. Hence, the new launch is expected to be purchased highly by off-driving enthusiasts.
In August 2024, Tata Nexon CNG announced its launch of an automatic gearbox option in India soon. Automotive has already made its India debut in the inaugural Bharat Mobility Expo.

Top Companies of the Automotive Gearbox Market

BorgWarner
ZF Friedrichshafen
Magna International
Aisin Seiki
GKN Automotive
Schaeffler
JTEKT
Allison Transmission
Voith Group
Eaton Corporation plc

Segments Covered in the Automotive Gearbox Market

By Gearbox Type

Manual Transmission
Intelligent Manual Transmission
Automated Manual Transmission
Automatic Transmission
Continuously Variable Transmission
Dual Clutch Transmission

By Fuel Type

By Vehicle Type

Hatchback/Sedan
SUV
LCV
HCV

By Region

North America
Europe
Asia Pacific
Latin America
Middle East and Africa

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