Automotive Transmission Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Global Automotive Transmission Market Trends and Insights

Rapid Growth of Hybrid and BEV E-Axle Transmissions

Electrified drivelines merge motor, inverter, and reduction gear into compact e-axles that can cut weight by 18 kilograms versus six-speed automatics, as demonstrated by BYD’s 8-in-1 unit on the Seal in 2024. Hyundai’s P1+P2 hybrid layout^{[1]"NextGen Hybrid Power: Hyundai Motor Group’s Advanced Transmission and Engine Technologies," Hyundai Motor Group, hyundaimotorgroup.com}, launched in April 2025, features a 44-kilowatt motor positioned between the engine and a six-speed automatic transmission, allowing for a pure-electric launch without separate transmission control. NIO’s four-in-one drive in the ET7 achieves 91.5% system efficiency by integrating torque vectoring into the inverter firmware.

Tightening Global CO₂/Fuel-Economy Regulations

The U.S. 2027-2031 CAFE^{[2]"Corporate Average Fuel Economy Standards for Passenger Cars and Light Trucks for Model Years 2027 and Beyond and Fuel Efficiency Standards for Heavy-Duty Pickup Trucks and Vans for Model Years 2030 and Beyond," National Highway Traffic Safety Administration (NHTSA), nhtsa.gov.} rules finalized in 2024 demand a 58-mile-per-gallon fleet average by 2031, compelling eight-plus-speed automatics that keep engines in optimum efficiency bands. Euro 7, effective January 2025, limits on-road nitrogen oxides to 60 mg/km, pushing diesel models toward 10-speed units that curb transient spikes. China’s revised dual-credit system rewards plug-in hybrids that exceed 80 km electric range, accelerating clutchless hybrid gearboxes. India’s CAFE Phase 2 imposes penalties of INR 25,000 per gram of CO₂ above 113 g/km, thereby accelerating the adoption of intelligent manuals with automated clutches.

Consumer Shift Toward Automatic and DCT for Comfort/Performance

Automatic penetration in India jumped in 2024 as urban stop-and-go traffic amplified driver fatigue from clutch use. Hyundai’s eight-speed wet DCT, fitted to the Sonata N Line in 2024, achieved 95% mechanical efficiency and a 0.4 l/100 km fuel benefit. Volkswagen’s DQ381 seven-speed DCT posts sub-150-millisecond shifts, removing torque interruption during hard acceleration. As costs converge, dual-clutch systems are increasingly appearing in C-segment sedans priced below USD 25,000, reinforcing momentum for the automotive transmission market worldwide. Gains in comfort and performance together sustain the migration away from stick shifts in both mature and emerging regions.

Commercial-Vehicle Demand for AMT to Address Driver Shortage

The United States faced 78,000 unfilled heavy-truck driver positions in 2024^{[3]"Truck Driver Shortage Facts," Ryder System, Inc., ryder.com}, motivating fleets to adopt automated manuals that reduce training from six weeks to 10 days. Allison’s TC10 AMT introduced predictive grade-based logic in 2024, resulting in a 3-5% reduction in fuel consumption compared to manual driving. Eaton’s Cummins Endurant HD handled 1,850 Nm torque and shipped 45,000 units in 2024, proving heavy-haul readiness. Consequently, fleets view AMTs as indispensable for retention and safety, while strengthening the trajectory of the automotive transmission market.

High System Cost and Complexity of Multi-Speed Electrified Drivelines

Adding an extra ratio inflates EV drivetrain cost by USD 400–600. It increases weight by 22 kilograms, as seen in Porsche’s Taycan, which also requires dedicated cooling to manage oil temperatures of up to 180 °C. Tesla and BYD avoid this cost by optimizing single-speed gearing for 90% of driving cycles. Hybrid e-CVTs face similar bill-of-materials pressure, with Toyota’s e-CVT requiring a battery capable of 50 kW continuous discharge, which raises pack cost by USD 1,200. These premiums limit near-term proliferation beyond premium nameplates, tempering broader growth in the automotive transmission market.

Supply-Chain Volatility in Precision-Forged Gears and Bearings

A January 2025 fire at SKF’s Gothenburg bearing facility removed 18% of European needle-roller output, forcing ZF and Aisin to air-freight inventory from Japan at a 22% cost penalty. Ring-gear lead times lengthened to 28 weeks in mid-2025 as alloy steel suppliers rationed nickel amid market turbulence. Schaeffler’s effort to qualify an Indian bearing source delayed its P2+ hybrid launch by two quarters. Dual-clutch units bear a significant risk because they use four to six tapered-roller bearings each, compared to two in classic automatics. The disruption highlights the fragility of the automotive transmission supply chain.

Segment Analysis

By Transmission Type: Automatic Dominance Faces DCT Challenge

Automatic transmissions retained a leading 41.03% share of the automotive transmission market in 2025, anchored by North American pickups and SUVs that value towing and refinement. Dual-clutch units are projected to grow at a 5.89% CAGR through 2031. Continuously variable designs, once favored for their infinite ratio spread, now struggle to satisfy performance expectations despite JATCO’s CVT9 launch with a 9.0:1 ratio range. Manual gearboxes persist mainly in entry-level Asian models, thanks to a USD 300 cost gap compared to intelligent manuals. 

Automatic dominance in full-size pickups, dual-clutch acceleration in compact cars, and emerging two-speed EV gears together shape the future mix. The automotive transmission market size for dual-clutch units is expected to expand as tooling amortization reduces the per-unit cost. Two-speed EV boxes count as “Others” but carry strategic weight for premium range extension in models like Audi’s e-tron GT. Suppliers, therefore, diversify portfolios across all mechanisms to defend relevance.

Note: Segment shares of all individual segments available upon report purchase

By Vehicle Type: Commercial Segments Drive Innovation

Passenger cars accounted for a 64.79% share of the automotive transmission market in 2025, while light commercial vehicles are expected to record a 5.62% CAGR through 2031, as e-commerce fleets prioritize low-maintenance electric drivetrains. Ford’s E-Transit reduced service expenses 40% versus diesel predecessors through a single-speed reduction gear rated at 430 Nm. Mercedes-Benz’s eSprinter adopted a two-speed gearbox to sustain a payload advantage of 1,045 kilograms.

The automotive transmission market size for AMT-equipped heavy trucks is positioned to grow steadily as carriers link safety gains with lower insurance premiums. Passenger cars bifurcate into eight-speed automatics for ICE platforms and single-speed drives for mainstream BEVs under USD 40,000. Tata’s Ace EV shows intelligent manual viability within small electrified commercial vehicles in India. Volvo Trucks’ FH Electric features a two-speed I-Shift for improved gradeability, although its USD 350,000 price currently restricts its adoption.

By Propulsion Technology: Electrification Accelerates

Internal-combustion engines represented 72.94% share of the automotive transmission market in 2025. Still, fuel-cell electric vehicles will advance at a segment-leading 6.34% CAGR through 2031, as Toyota and Hyundai push hydrogen for payload-sensitive commercial fleets. Battery-electric cars priced under USD 40,000 often utilize single-speed gearsets because adding a second ratio can erode their margin. BYD’s Dolphin employs a fixed 10.39:1 gear to achieve 0–100 km/h in 7.5 seconds.

The automotive transmission market size for dedicated hybrid gearboxes expands as dual-motor architectures meet revised Chinese credit multipliers. ICE powertrains have evolved to 10-speed automatics, such as Ford’s 10R80, which keeps the 3.5-liter EcoBoost under 2,000 rpm at highway speeds. Premium BEVs, led by Porsche’s Taycan, validate two-speed layouts that extend range on high-speed cycles. Consequently, suppliers must balance traditional planetary expertise with emerging e-axle competencies.

Note: Segment shares of all individual segments available upon report purchase

By Sales Channel: Aftermarket Complexity Creates Opportunities

OEM factory-fit units captured a 90.88% share of the automotive transmission market in 2025, as deeply integrated control software discourages component swapping. Continental’s shift-by-wire module requires a cryptographic handshake with the body controller, effectively locking out unauthorized replacements. Still, the remanufacturing aftermarket is expected to post a 6.21% CAGR through 2031, as fleets pursue life-cycle cost savings of 40–60% compared to new units.

The automotive transmission market size within remanufacturing could expand further, as Class 8 trucks typically undergo 1.2 replacements over a one-million-mile lifespan. Powertrain warranties such as Ford’s 10-year/150,000-mile plan introduced in 2024 heighten genuine parts demand. Battery-electric single-speed drives pose a structural headwind for the aftermarket, yet heavy-duty fleets keep the channel buoyant.

Geography Analysis

In 2025, the Asia-Pacific region held a 43.67% share of the automotive transmission market, fueled by strong BEV sales in China and significant growth in India's adoption of intelligent manuals, especially for sedans priced below USD 15,000. China's revised dual-credit system now allocates 1.6 credits per plug-in hybrid, encouraging OEMs to utilize dedicated hybrid transmissions, such as BYD's DM-i.

South America represents the fastest-growing territory, with a 6.28% CAGR through 2031, as Brazil’s Rota 2030 initiative subsidizes locally built automatics to achieve 12% fleet-level efficiency by 2028. Argentina’s import tariff on fully built gearboxes spurred local dual-clutch assembly for Volkswagen and Fiat. In 2025, North America's automotive transmission market experienced a notable increase, with 10-speed automatics dominating pickups like the Ford F-150, while single-speed drives became the preferred choice for crossovers, exemplified by the Mustang Mach-E. 

Meanwhile, Europe is gravitating towards dual-clutch systems, highlighted by Germany's substantial share of DCTs in passenger vehicles in 2025. In 2025, the United Kingdom experienced a surge in new BEV registrations, dampening the demand for conventional automatics. Concurrently, France is expanding Renault's clutchless four-speed E-Tech across its mainstream models.