GLOBAL AUTOMOTIVE DIFFERENTIAL MARKET
A differential is a gear train with three shafts with a distinguished feature that the rotational speed of a shaft is the average of the speeds of the others. In automotive, the differential allows the outer drive wheel to rotate faster than the inner drive wheel during a turn. This is necessary when the vehicle turns, making the wheel that is traveling around the outside of the turning curve roll farther and faster than the other.
The average of the rotational speed of the two driving wheels equals the input rotational speed of the drive shaft. An increase in the speed of one wheel is balanced by a decrease in the speed of the other.
Electric drivelines don’t just transfer power from the differential to the wheel – they also transmit the negative torque that enables the eMotor to recharge the battery. In a hybrid drive, more efficient drive shafts can mean a smaller battery.
The quality of the systems integration, how well the software controls in different vehicle systems work together, is a big part of any hybrid or electric vehicle’s driving experience. Software control for an all-wheel drive (AWD) or electric drive system governs more than just the traction: it directly influences the vehicle dynamics, the CO2, the complete driving experience.
For hybrid all-wheel drive, on vehicles such as the Volvo XC90, the software control must also take care of details like the damping of any noise or vibrations, determining the quality of the system integration and drivetrain optimisation. Therefore, advancements in the differential market will see progress even with hybrid vehicles becoming more and more popular.
AUTOMOTIVE DIFFERENTIAL MARKET DYNAMICS
Lucrative demand for all-wheel drive automotive, rise in per capita income in many countries resulting in the sale of passenger vehicles along with the rise in the global standards of living will drive the automotive differential market size.
Furthermore, the need for better traction on roads and fuel efficiency will be significant factors that drive the growth of the automotive differential market. In the year 2018, India became the fourth largest automobile industry in the world, with increase in sales of 9.5% year-on-year to 4.2 million units. Passenger car technology in India will evolve from combustion engines to hybrid vehicles and eventually to electric vehicles.
Therefore, the hybrid vehicle segment will also show a need for the differential suppliers to be at par with the rising need for private ownership of vehicles. One of the challenges for a differential supplier is the complete transformation to an all-electric drivetrain, and this is expected to happen over the course of 10-15 years since infrastructure development plays a major role in easy deployment and use of EVs.
By Drive Type
- Front wheel drive
- Rear wheel drive
- All wheel drive
By Type of Differential
- Open Differential
- Electronic Limited Slip Differential: Electronic limited slip differential provides a vehicle with increased traction and can be extremely beneficial on wet or dry roads, providing improved handling for high-performing vehicles.
- Locked Differential
- Torque Vectoring Differential
By vehicle type
- Passenger cars
- GKN Automotive: is one of the pioneers in automotive driveline technology, and 50% of all cars sold every year contain GKN’s driveline technology.
- BorgWarner Inc: is an American automotive components and parts supplier and in fact provides driveline components to all the 3 major American OEMs. 72% of BorgWarner’s sales are in the light vehicle segment. BorgWarner said it is passionate about inventing the next ground-breaking technology to improve handling, traction and stability to front wheel drive vehicles.
- Eaton: is an American-Irish manufacturer of electrical and industrial products. In terms of differential, their Limited slip differential was the most successful and widely used differential during the time.
- ZF Friedrichshafen AG: is a German car parts manufacturer and their differential for SUV application was the most widely used differential during the year 2018. They are also a leader in manufacture and supply of transmission systems, especially to vast majority of public transport systems in Europe.
- Schaeffler Technologies AG & Co. KG
- Continental AG
- JTEKT Corporation
- American Axle & Manufacturing Inc.
- Linamar Corporation
MERGERS AND ACQUISITIONS
- In January 2020, BorgWarner and Delphi Technologies announced that BorgWarner will acquire Delphi for $3.3 billion to expand its ability to supply hybrid and electric vehicles.
- In late 2007, Eaton acquired the MGE Office Protection Systems division of Schneider Electric, because of Schneider’s acquisition of APC. A Taiwanese manufacturer, Phoenixtec, was also acquired giving the company the highest share in the Chinese single-phase UPS market.
- On 21 May 2012 Eaton announced that they had agreed to purchase Ireland based Cooper Industries in a cash-and-stock deal valued at about $11.46 billion. The new company is called Eaton Corporation plc and is incorporated in Ireland.
- In 2014, ZF acquired American auto parts manufacturer TRW Automotive for $13.5 billion. In 2020, ZF acquired WABCO, which will be integrated into ZF as its Commercial Vehicle Control Systems Division.
Automotive differentials are seeing a changing landscape with the introduction of hybrid as well as electric vehicles. Large scale usage of electric vehicles currently remains the top threat for the automotive differential market. AWD segments are expected to a rise in number and sales and therefore this segment is a promising sector for differentials.
Companies like GKN are majorly advancing their R&D to cater to the needs of AWD SUVs which are expected to have a big chunk of the market. Nonetheless, the transition to electric drive is gradual and until then gasoline engines are most preferred among the common man, especially in a country like India, and therefore the differential segment is definitely set to see an increase in the growth rate in the next 5 years.
|2||Scope of the report|
|7||Insights from Industry stakeholders|
|8||Cost breakdown of Product by sub-components and average profit margin|
|9||Disruptive innovation in the Industry|
|10||Technology trends in the Industry|
|11||Consumer trends in the industry|
|12||Recent Production Milestones|
|13||Component Manufacturing in US, EU and China|
|14||COVID-19 impact on overall market|
|15||COVID-19 impact on Production of components|
|16||COVID-19 impact on Point of sale|
|17||Market Segmentation, Dynamics and Forecast by Geography, 2020-2025|
|18||Market Segmentation, Dynamics and Forecast by Product Type, 2020-2025|
|19||Market Segmentation, Dynamics and Forecast by Application, 2020-2025|
|20||Market Segmentation, Dynamics and Forecast by End use, 2020-2025|
|21||Product installation rate by OEM, 2020|
|22||Incline/Decline in Average B-2-B selling price in past 5 years|
|23||Competition from substitute products|
|24||Gross margin and average profitability of suppliers|
|25||New product development in past 12 months|
|26||M&A in past 12 months|
|27||Growth strategy of leading players|
|28||Market share of vendors, 2020|
|30||Unmet needs and opportunity for new suppliers|