All Wheel Drive Market to Hit $65.27 billion by 2031, at a CAGR of 7.9%, says Coherent Market Insights

The global All Wheel Drive Market is estimated to witness high growth owing to rising consumer demand for improved safety and enhanced driving quality. The market is estimated to be valued at US$ 38.24 Bn in 2024 and is expected to exhibit a CAGR of 7.9% over the forecast period 2024-2031, according to new report by Coherent Market Insights. Companies covered: AB Volvo, American Axle & Manufacturing, Inc., BorgWarner Inc., Continental AG, Dana Incorporated, GKN Plc, Honda Motor Company Ltd., JTEKT Corporation, Magna International Inc., Nissan Motor Co., Ltd.,, Tesla, Inc., Valeo SA, ZF Friedrichshafen AG

Burlingame, July 05, 2024 (GLOBE NEWSWIRE) — The global All Wheel Drive Market, valued at $38.24 billion in 2024, is on a trajectory of rapid expansion, with projections indicating it will soar to $65.27 billion by 2031, growing at a compound annual growth rate (CAGR) of 7.9% from 2024 to 2031, as per a recent report by Coherent Market Insights. Increasing demand for vehicles that provide better safety and traction. All wheel drive systems allow power to be distributed to all the wheels of a vehicle for improved handling during turns and braking on slippery surfaces like wet or snow-covered roads. This offers significantly more control and stability over two-wheel drive vehicles, especially in slippery conditions. As roads are becoming more congested and weather more unpredictable due to climate change, consumers are increasingly prioritizing safety features in their vehicle purchases.

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Market Dynamics:

The All Wheel Drive market is driven by rising consumer demand for improved safety and enhanced driving quality. All wheel drive vehicles offer better traction, control, and stability on slippery roads and off-road surfaces. This has led to increasing preference among consumers globally. Moreover, with rising disposable income, customers are willing to pay higher price for vehicles with all wheel drive configuration due to perceived premiumization. However, all wheel drive also increases weight and reduces fuel economy of the vehicle which can restrain the market growth.

Market Trends:

There is rising consumer preference for Sport Utility Vehicles (SUVs) globally owing to changing lifestyles. SUVs are primarily available with all wheel or four wheel drive trains to offer higher ground clearance and better off-road capability. This has accelerated the demand for all wheel drive vehicles. According to IHS Markit, SUV segment is expected to grow at over 25% till 2026 in the U.S.

All wheel drive configuration is primarily offered in premium and luxury vehicles to enhance driving dynamics. With rising disposable income, sales of luxury and premium vehicles have witnessed strong growth especially in developing economies of Asia Pacific and Latin America. This is expected to generate significant demand for all wheel drive vehicles.

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Market Opportunities:
The growing adoption of electric vehicles is expected to driving demand for all wheel drive systems. As electric vehicles are heavier than conventional ice vehicles due to large battery packs, all wheel drive provides better traction and handling. This is especially important in harsh weather conditions with wet or slippery roads where electric vehicles need maximum control and grip. All wheel drive distributes torque across both front and rear wheels for improved acceleration and control. Several new electric vehicle models are being launched with standard all wheel drive systems to offerdrivers confidence during all weather conditions. For instance, the Tesla Model Y SUV and Model X crossover are available with all wheel drive.

All Wheel Drive Market Report Coverage

Report Coverage Details
Market Revenue in 2024 $38.24 billion
Estimated Value by 2031 $65.27 billion
Growth Rate Poised to grow at a CAGR of 7.9%
Historical Data 2019–2023
Forecast Period 2024–2031
Forecast Units Value (USD Million/Billion)
Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
Segments Covered By Drive Type, By Vehicle Type, By Propulsion, By Application
Geographies Covered North America, Europe, Asia Pacific, and Rest of World
Growth Drivers • Improving Traction and Safety

• Technological Advancements Enhance Performance and Efficacy of All Wheel Drive Systems

Restraints & Challenges • Navigating Technological Hurdles in the All Wheel Drive Market

• Complex drivetrain system requires more maintenance

The increasing demand for performance vehicles among enthusiasts is another key driver for the all wheel drive market. All wheel drive provides better acceleration, handling and allows drivers to better exploit a vehicle’s full power especially during acceleration. This makes all wheel drive very appealing for performance vehicles. Several high-performance vehicles like sports cars, supercars and high-end SUVs are being offered with standard all wheel drive. For instance, most variants of the Lamborghini Urus, Ferrari Roma and Porsche 911 now come with all wheel drive as standard. This is expected to further drive the adoption of all wheel drive systems in performance-oriented segments.

Key Market Takeaways

The all wheel drive market is anticipated to witness a CAGR of 7.9% during the forecast period 2024-2031, owing to the increasing demand for electric vehicles and performance-oriented vehicles.

On the basis of type, the manual segment is expected to hold a dominant position, accounting for nearly 60% of the market share by 2031, owing to their simplicity and relatively lower costs compared to automatic all wheel drive systems.

On the basis of propulsion, the electric vehicle segment is projected to witness fastest growth during the forecast period due to the increasing proliferation of electric vehicles requiring superior traction.

On the basis of vehicle type, the passenger vehicle segment accounts for around 65-70% of the market. However, the commercial vehicle segment is expected to showcase higher growth driven by growing demand for SUVs, crossovers, pickup trucks and electric vans.

Based on application, the on road segment dominates with nearly 75% share due to widespread adoption in passenger cars, SUVs and crossovers. However, off road vehicles will witness higher growth driven by demand from recreational vehicles and light commercial vehicles.

Regionally, North America is expected to retain its dominance in the global all wheel drive market, holding around 35-40% share owing to extreme weather conditions and growing electric vehicle adoption in the US and Canada.

Some of the leading players operating in the all wheel drive market include ZF Friedrichshafen AG, Magna International Inc., BorgWarner Inc., GKN Automotive Limited, Eaton Corporation, Dana Inc., Oerlikon Graziano, Jtekt Corporation, and Continental AG. These players are focusing on partnerships, new product development and integration of advanced electronics to strengthen their positions in the market.

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Recent Developments:

In January 2021 – Kia Motors which is South Korean automotive company add introduced and all-wheel drive vehicle, Kia K5, which is well equipped with all the necessary features.

Market Segmentation:

By Drive Type:

  • Manual
  • Automatic

By Vehicle Type:

  • Passenger Car 
  • Commercial Car

By Propulsion:

  • Internal Combustion Engine (ICE) Vehicle
  • Electric Vehicle

By Application:

  • On-Road
  • Off-Road

By Regional:

North America:

  • U.S.
  • Canada

Latin America:

  • Brazil
  • Argentina
  • Mexico
  • Rest of Latin America


  • Germany
  • U.K.
  • Spain
  • France
  • Italy
  • Russia
  • Rest of Europe

Asia Pacific:

  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Rest of Asia Pacific

Middle East:

  • GCC Countries
  • Israel
  • Rest of Middle East


  • South Africa
  • North Africa
  • Central Africa

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About Us:

Coherent Market Insights is a global market intelligence and consulting organization that provides syndicated research reports, customized research reports, and consulting services. We are known for our actionable insights and authentic reports in various domains including aerospace and defense, agriculture, food and beverages, automotive, chemicals and materials, and virtually all domains and an exhaustive list of sub-domains under the sun. We create value for clients through our highly reliable and accurate reports. We are also committed in playing a leading role in offering insights in various sectors post-COVID-19 and continue to deliver measurable, sustainable results for our clients.

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