All-Wheel Drive Market Research Report – Global Forecast till 2027

All-Wheel Drive Market Report: Information By Type (Manual AWD and Automatic AWD), By Propulsion (ICE vehicle and Electric), By Application (On-Road and Off-Road), By Vehicle Type (Passenger Vehicle and Commercial Vehicle) – Forecast till 2027

ID: MRFR/AM/6178-CR | April 2019 | Region: Global | 125 pages

All-Wheel Drive Market Overview


All-Wheel Drive Market is expected to register a 7.83% CAGR during the forecast period, witnessing the rising sales of SUVs, CUVs, luxury cars, electric vehicles, and high-end sports vehicles. All-wheel drive (AWD) vehicles have the ability to drive safely in harsh winter conditions. 


COVID-19 Analysis


COVID 19 hit the all-wheel-drive market severely, affecting the overall automotive industry. The pandemic-driven disruption forced many automakers to reduce the output at their production plants. This, as a result, prompted various AWD suppliers to cut back production in some areas and work intensively on countermeasures and alternatives in order to minimize the impact. 


However, the market is again gearing up with the lockdown limitations, getting relaxed with time. Innovative industry players have actively started to adopt online lead generation models. This initiative to engage prospective buyers through digital channels proves to be a game-changer to the market growth. The product demand picked up following the uplift of the lockdown in numerous countries.


Competitive Landscape


Players Focus on Product Development & Expansion Plans


The worldwide all-wheel drive market appears extremely fragmented, considering the presence of well-established manufacturers and distributors. They seek opportunities to integrate across the extensive value chain while focusing on R&D investments, production facility expansion, and M&A activities to gain impetus. New AWD manufacturers enter the market with aggressive pricing to undercut the established providers and gain footholds in international markets. 


List of Key Companies



  • GKN PLC (UK)

  • American Axle & Manufacturing Inc. (US)

  • Magna International Inc. (Canada)

  • BorgWarner Inc. (US)

  • ZF Friedrichshafen AG (Germany)

  • Continental AG (Germany)

  • Dana Limited (US)

  • JTEKT Corporation (Japan)

  • Oerlikon (Italy)

  • Eaton (Ireland)


ZF Friedrichshafen AG (ZF Group), is a German car parts maker. ZF provides the right solutions for All-wheel drive the technology required for different vehicles, including cranes, special vehicles, and in machinery and plant engineering.  ZF's electric all-wheel drive for small and compact vehicles eAMT enables hybrid functions plus electric all-wheel drive for small and compact vehicles.


Industry News


On 6th June 2021, Škoda Auto A S, a Czech automobile manufacturer, stated that it has added a third powertrain option to its new Octavia vRS line-up with the advent of a new 2.0 TDI model. The all-wheel-drive system available on the model distributes power through a new, electronically controlled sixth-generation multi-plate clutch.


On 5th January 2021, South Korean multinational automotive manufacturer KIA Motors Corporation (ΚIΛ) introduced a well-equipped all-wheel-drive sedan – the 2021 Kia K5. The K5 is a stylish vehicle with three trim levels engine.


Market Dynamics


Drivers & Opportunities


The Automotive Ecosystem Promotes All-Wheel Drives Usages


All-wheel drive (AWD) systems are primarily used in SUVs, CUVs, luxury cars, electric vehicles, and high-end sports cars to meet the demand for additional stability, control, and safety along with the improved driving experience. The rising rate of road accidents increases the adoption of AWD systems, driving awareness for vehicle safety and stability. Moreover, the demand for higher vehicle stability in off-road terrain and extreme road conditions, such as snowy roadways, mud, and sand, influence market growth. 


Restraints & Challenges


High Cost of the AWD System Acts as a Major Headwind


The high cost of the AWD system has a high impact on market demand. 


Cumulative Growth Analysis


Market Size to Expand at a Strong Rate 


The rising adoption of AWD systems in agriculture, construction, and mining vehicles is expected to drive the global all-wheel drive market growth. Additionally, stringent government norms regarding vehicle safety would eventually increase the need for all-wheel drive systems. Hence, many major automotive component manufacturers and OEMs are investing in the development of advanced AWD systems. Increasing consumer purchasing power and product development activities would impact the adoption of AWD systems in automobiles over the assessment period.


Segment Overview


The AWD Market is segmented on the basis of Types, Propulsion, Application, Vehicle Type, and Region. 


Manual all-Wheel Drive System Holds the Largest Market Share 


The type segment is sub-segmented into manual AWD and automatic AWD. The manual AWD segment dominates the market owing to the increase in demand for sport utility vehicles. Manual all-wheel drive systems are mostly used in SUVs, which helps the segment growth. 


ICE Vehicle Dominates the Propulsion Segment


The propulsion segment is sub-segmented into ICE vehicles, electric vehicles, and other vehicles. The electric vehicle segmented is further bifurcated into battery electric vehicle (BEV), hybrid electric vehicles (HEVs), and plug-in hybrid electric vehicles (PHEVs). The ICE vehicle segment is estimated to lead the market in terms of market share. The growing demand for AWD vehicles with conventional ICEs is a major factor driving the segment growth.  


On-Roads is the Largest Application Segment


The application segment is sub-segmented into on-road and off-road. Out of these, the on-road segment is projected to dominate the market during the forecast period. The availability of a variety of vehicles, including sports vehicles, racing cars, utility vehicles, and others for on-road application, alongside a large number of on-road users, are the dominant factors propelling the market segment growth.


Passenger Cars Leads the Vehicle Type Segment


The Vehicle Type segment is sub-segmented into passenger vehicles and commercial vehicles. Among these, Passenger vehicle is the dominating segment, and it is expected to retain its leading position during the forecast period. Factors boosting the segment growth include the growing population, rising purchasing power, and stringent government regulations against increasing the vehicle emission levels.  


Based on regions, the market is sub-segmented into Americas, Europe, Asia Pacific, and rest-of-the-world.


Regional Analysis


North America to Retain its Winning Streak


North America would remain a dominant market for all-wheel drive, globally, accounting for 35% share during the forecast period. Factors such as the increase in AWD vehicles use in forestry, agriculture, and varied terrains increase the all-wheel drive market size in the region. Moreover, the demand for vehicle stability and torque distribution foster the demand for all-wheel drive cars. The US all-wheel drive market led the regional market, reaching a valuation of USD 6,519.3 million.


Europe Holds Second Highest Share in Global Market 


Europe to be the second biggest market for all-wheel drives, accounting for a 35% share in the global market during the assessment period. The region is a prominent market for luxury autonomous vehicles. Besides, factors such as the EU revealed regulatory laws for vehicle emissions and demand for low emission vehicles drive the demand for all-wheel drive systems in the region. Rising sales of AWD vehicles and the constant rise in the automotive industry help the regional market gain the highest market share. 


APAC All-Wheel Drive Market to Demonstrate Promising Growth


Asia Pacific is an emerging market for all-wheel drives. Increasing production and sales of luxury vehicles influence regional market growth. Furthermore, the well-established automobile industry in the region creates substantial opportunities for the all-wheel drive industry. Heading with the high technological advancement, The APAC all-wheel drive market is expected to register a 26% CAGR during the forecast period


Recent Developments


Jan.06, 2021 ---- Škoda Auto A S, a Czech automobile manufacturer, announced that it has added a third powertrain option to its new Octavia vRS line-up with the introduction of a new 2.0 TDI model. The all-wheel-drive system available on the model distributes power via a new, electronically controlled sixth-generation multi-plate clutch.


Jan.05, 2021 ---- South Korean multinational automotive manufacturer KIA Motors Corporation (ΚΙΛ) launched a well-equipped all-wheel-drive sedan – the 2021 Kia K5. The K5 is a sporty-looking vehicle with three trim levels engine. 


Dec.25, 2020 ---- MG Motors announced that it is working on an all-wheel-drive model of the Hector Plus to be launched with the 4×4 system and the new Savvy variant. MG Motors also mentioned that it is planning to introduce ADAS or Advance Driver Assistance System features for the Hector Plus.


Report Overview 


The report features unique and relevant factors expected to significantly impact the AWD market during the forecast period. The detailed and considerable amount of information in the report would help industry players understanding the market better. The MRFR report elaborates on the historical and current trends boosting the all-wheel drive market growth. 


Besides, the Analysis of COVID-19 impact on the all-wheel drive industry is also included in the report. Regional assessment explained in this report unlocks a plethora of untapped opportunities in regional and domestic market places. Detailed company profiling in the region enables users to evaluate company shares analysis, emerging product lines, the scope of the product in new markets, pricing strategies, innovation possibilities, and much more.


Segmentation Table


By Type



  • Manual AWD

  • Automatic AWD 


By Propulsion 



  • ICE vehicle

  • Electric 


By Application 



  • On-Road

  • Off-Road


By Vehicle Type



  • Passenger Vehicle

  • Commercial Vehicle


By Region



  • North America

  • Europe

  • Asia Pacific

  • Rest of the World (RoW)



Report Scope:
Report Attribute/Metric Details
  Market Size   2027: USD USD 42BN
  CAGR   7.83% CAGR (2020-2027)
  Base Year   2019
  Forecast Period   2020-2027
  Historical Data   2018
  Forecast Units   Value (USD Million)
  Report Coverage   Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
  Segments Covered   Type, Propulsion, Application, Vehicle Type
  Geographies Covered   North America, Europe, Asia-Pacific, and Rest of the World (RoW)
  Key Vendors   GKN PLC (UK), American Axle & Manufacturing Inc. (US), Magna International Inc. (Canada), BorgWarner Inc. (US), ZF Friedrichshafen AG (Germany), Continental AG (Germany), Dana Limited (US), JTEKT Corporation (Japan), Oerlikon (Italy), Eaton (Ireland)
  Key Market Opportunities   Demand for higher vehicle stability in off-road terrain and extreme road conditions, such as snowy roadways, mud, and sand
  Key Market Drivers

  • Rising rate of road accidents increases the adoption of AWD systems, driving awareness for vehicle safety and stability
  • Rising adoption of AWD systems in agriculture, construction, and mining vehicles


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    Frequently Asked Questions (FAQ) :


    By 2023, the all-wheel drive market can value at USD 36,572.3 Mn by 2023.

    ZF Friedrichshafen AG (Germany), Continental AG (Germany), BorgWarner Inc. (US), Dana Limited (US), and JTEKT Corporation (Japan) are some major players of the all-wheel drive market.

    The growing incorporation of enhanced driving dynamics in automobiles can boost the all-wheel drive market growth.

    In 2017, the all-wheel drive market value at USD 23,429.8 Mn.

    The all-wheel drive market can thrive at 7.83% CAGR by 2027.