Automotive Differential Market Research Report: By Drive Type (Front-Wheel Drive, Rear-Wheel Drive, All-Wheel/ Four-Wheel Drive), Vehicle Type (Passenger Vehicle, Commercial Vehicle), Component (Differential Bearing, Differential Case, Differential Gear), Type (Open Differential, Locking Differential, Limited-Slip Differential, Electronic Limited-Slip Differential, Torque-Vectoring Differential) - Global Industry Analysis and Growth Forecast to 2030

Market Overview

The global automotive differential market stood at ~$20 billion in 2020. The increasing adoption of all-wheel-drive (AWD) vehicles, rising demand for commercial and heavy-duty vehicles, and surging need for improved road traction and fuel efficiency are some of the key factors driving the demand for automotive differentials globally.

The COVID-19 pandemic forced governments all over the world to impose various restrictions, which resulted in partially or fully closed factories. The pandemic disturbed the whole automotive ecosystem's supply chain, and export and manufacturing entities were forced to halt their operations to some extent. This scenario is projected to have a negative impact on the automotive differential industry, as the market growth is directly tied to vehicle production. Resultingly, the market for automotive differential is projected to suffer, as vehicle manufacturing declines.

AWD/4WD Category To Showcase Fastest Growth due to Rising Need for Improved Vehicle Safety and Stability

The growing demand for sports utility vehicles (SUVs), as well as the increasing need for improved vehicle safety, stability, and enhanced driving dynamics, are boosting the demand for all-wheel drive (AWD)/four-wheel drive (4WD) differentials in the automotive differential market, based on drive type. Since torque is sent to all four wheels, all the wheels are capable of propelling the vehicle forward. If any of the wheels loses traction due to slippery surfaces, such as ice, snow, or mud, the rest of the wheels can continue to drive the vehicle. Furthermore, performance cars or sports cars also take advantage of the AWD system’s extra traction to attain faster acceleration in lesser time.

Due to Its Low Cost and Higher Adoption, Open Differential Category Dominated Market in 2020

The open differential category held the largest market share in 2020, in terms of type. This was because open differentials allow the wheels to turn independent of one another, which eliminates wheel hop and vehicle instability and reduces tire wear.

Asia-Pacific (APAC) Is Expected To Dominate Market in Forecast Period

The APAC region is the largest hub for vehicle production, and the presence of large production facilities in China and Japan increases the demand for automotive differentials. For instance, China and Japan remained the first- and third-largest producers of passenger cars in 2020, manufacturing approximately 33 million units combined. Hence, the overall demand for automotive differentials is the highest in the region, and it will continue being so till 2030.

Vehicle Electrification Is Major Trend in Automotive Differential Market

With automotive differentials being used in cars for a long time now, it is difficult to replace them with any other technology. Manufacturers are now focusing on component electrification as a result of the introduction of emission reduction targets and purchase and manufacturing subsidies for clean-energy automobiles. Electronic limited-slip differentials are now being used to replace conventional differentials. With the aid of an electronic control unit, this device provides enough torque to each wheel. In the event of a instability, the mechanism is useful since the extra torque is transferred to the wheels.

During high-speed curves and lane changes, the machine provides improved handling. For example, Mitsubishi's Active Center Differential allows drivers to choose different presets for driving on asphalt, dirt, and snow. Therefore, growing vehicle electrification is major trend witnessed in the automotive differential market.

Introduction of AWD/FWD Options in Mid-Range Passenger Cars Supporting Market Growth

Improved safety, stability, and drive control, as provided by these systems, are just a few of the factors that are helping the market grow fast. These systems were previously only available in high-end vehicles, but their inclusion in mid-range passenger cars has resulted in a surge in the global demand. Other significant factors that are expected to propel the growth of the market during the forecast period are the improvements in AWD systems, as well as their penetration in the growing electric vehicle market. Thus, due to aforementioned factors, the automotive differential market is expected to witness an exponential growth during the forecast period.

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Market Players Involved in Technological Advancements to Gain Significant Position

The global market for automotive differential is fragmented in nature with the presence of players such American Axle & Manufacturing Inc. (AAM), BorgWarner Inc., Dana Incorporated, Eaton Corporation plc, Hyundai Wia Corporation, JTEKT Corporation, Linamar Corporation, Melrose Industries PLC, Schaeffler Technologies AG & Co. KG, and ZF Friedrichshafen AG.

• In August 2020, Eaton Corporation plc launched an electronically controlled, scalable limited-slip differential that functions across multiple vehicle platforms to ensure driver safety and enhance performance.

Some of Key Players in Automotive Differential Market Are:

Market Size Breakdown by Segments

The automotive differential market report offers comprehensive market segmentation analysis along with market estimation for the period 2015-2030.

Based on Drive Type

• Front-Wheel Drive
• Rear-Wheel Drive
• All-Wheel/ Four-Wheel Drive

Based on Vehicle Type

• Passenger Vehicle
• Commercial Vehicle

Based on Component

• Differential Bearing
• Differential Case
• Differential Gear

Based on Type

• Open Differential
• Locking Differential
• Limited-Slip Differential
• Electronic Limited-Slip Differential
• Torque-Vectoring Differential

Geographical Analysis

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • France
  • U.K.
  • Italy
  • Spain
• Asia-Pacific (APAC)
  • Japan
  • China
  • India
  • Australia
  • South Korea
• Latin America (LATAM)
  • Brazil
  • Mexico
• Middle East and Africa (MEA)
  •  Saudi Arabia
  • South Africa

Market Segment Analysis of Countries

• Further breakdown of 16 listed countries will be provided as per below segmentation:
  • By drive type
  • By vehicle type
  • By component
  • By type