PASSENGER CARS POWERTRAIN MARKET, SIZE, SEGMENT AND GROWTH BY FORECAST PERIOD:(2021-2031)

Passenger Cars Powertrain Market, Size, Segment and Growth by Forecast Period:(2021-2031)

Passenger Cars Powertrain Market, Size, Segment and Growth by Forecast Period:(2021-2031)

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Executive Summary and Global Market Analysis

The global passenger cars powertrain market is set to grow significantly, reaching an estimated US$ 1,456.27 billion by 2031, up from US$ 789.4 billion in 2024, at a projected CAGR of 9.14% from 2025 to 2031. This growth is driven by a rapid industry-wide shift toward electrification, sustainability, and advanced propulsion technologies.

Governments around the world are tightening emissions regulations and introducing incentives to promote clean mobility. In response, automakers are ramping up investments in electric and hybrid powertrain systems. This shift is being accelerated by advancements in high-voltage architectures, battery management systems, and smart, integrated technologies that collectively enhance vehicle efficiency, performance, and connectivity.

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Although internal combustion engines (ICEs) still maintain relevance in regions with limited electric vehicle (EV) infrastructure, the long-term market trajectory clearly favors electrified alternatives. Hybrid and fully electric systems are expected to dominate future developments.

Regionally, Asia-Pacific—led by China and India—is poised to become a key growth engine, fueled by increasing urbanization, expanding middle-class populations, and proactive government policies. Leading global automakers such as Toyota, Volkswagen, and Hyundai, along with powertrain technology providers like BorgWarner and ZF Friedrichshafen, are at the forefront of innovation and strategic expansion.

Nonetheless, the market faces notable challenges, including high R&D costs, the need for widespread charging infrastructure, and supply chain disruptions. Despite these obstacles, the outlook remains strong. Electrification, hybridization, and intelligent technologies will continue to reshape the global passenger car powertrain landscape over the coming decade.

Passenger Cars Powertrain Market Segmentation Analysis

The analysis of the passenger cars powertrain market is based on four key segments: drive type, propulsion type, sales channel, and geography.


  • By Drive Type:
    The market is segmented into Front-Wheel Drive (FWD), Rear-Wheel Drive (RWD), and All-Wheel Drive (AWD). In 2024, the Front-Wheel Drive segment held the largest share, driven by its cost efficiency, fuel economy, and compact packaging advantages—especially in hatchbacks, sedans, and compact SUVs that dominate urban and family transport.

  • By Propulsion Type:
    The market is categorized into Internal Combustion Engine (ICE) and Electric Vehicles (EVs). The ICE segment remained dominant in 2024, particularly in the Asia Pacific region. However, the market is witnessing a major transformation, with EV adoption accelerating due to regulatory pressure, technological innovation, and supportive policies.

  • By Sales Channel:
    Segmentation includes OEM (Original Equipment Manufacturer) and Aftermarket. The OEM segment leads the market, driven by increasing global vehicle production and growing demand for electrified and connected vehicles. The Aftermarket segment is also expanding steadily, fueled by factors such as an aging vehicle fleet, rising interest in customization, and the growing need for EV-specific components and services.

  • By Geography:
    The market is segmented into several regional markets, with Asia Pacific emerging as the dominant and fastest-growing region in 2024. Growth is led by high-volume markets such as China, India, and Japan, along with rapidly urbanizing Southeast Asian countries like Indonesia, Vietnam, and the Philippines, where increasing incomes and vehicle ownership are boosting demand.


Market Drivers and Growth Opportunities

  • Stringent Emission Regulations and Government Incentives:
    Regulatory frameworks such as Euro 7 in Europe and CAFE standards in the U.S. are compelling automakers to invest in cleaner propulsion technologies. Additionally, financial incentives such as tax credits, rebates, and subsidies are making EVs more accessible and attractive to consumers.

  • Technological Advancements and Declining Battery Costs:
    Innovations in battery technology—such as improvements in energy density, reduced charging time, and better overall efficiency—are making EVs more viable for everyday consumers. Significantly, the cost of lithium-ion batteries is decreasing, bringing EV prices closer to those of traditional ICE vehicles, and supporting mass-market adoption.


Passenger Cars Powertrain Market Size and Share Overview

  • Drive Type:
    FWD continues to dominate due to affordability and efficiency, making it a preferred choice in the mass-market segment.

  • Propulsion Type:
    ICE vehicles still hold the majority share, particularly in emerging markets. However, the shift toward EVs is gaining momentum, especially in developed economies and among environmentally conscious consumers.

  • Sales Channel:
    OEMs lead in terms of market value, benefiting from new vehicle demand and integration of advanced technologies. The aftermarket remains crucial, driven by vehicle longevity and the shift toward sustainable vehicle components.

  • Geography:
    Asia Pacific is not only the largest but also the fastest-growing regional market, fueled by rapid industrialization, favorable government initiatives, and increasing disposable incomes.


Market leaders and key company profiles

  Toyota Motor Corporation

  Honda Motor Co. Ltd.,

  Ford Motor Company

  Hyundai Motor Company

  General Motors Company

  Volkswagen Group

  BMW AG

  Daimler AG (Mercedes-Benz Group AG)

  BorgWarner Inc.

  ZF Friedrichshafen AG

Passenger Cars Powertrain Market Report Coverage and Deliverables

The "Passenger Cars Powertrain Market Outlook (2021–2031)" report provides a detailed analysis of the market covering below areas:

  • Passenger Cars Powertrain market size and forecast at global, regional, and country levels for all the key market segments covered under the scope

  • Passenger Cars Powertrain market trends, as well as market dynamics such as drivers, restraints, and key opportunities

  • Detailed Porter's Five Forces and SWOT analysis

  • Passenger Cars Powertrain market analysis covering key market trends, global and regional framework, major players, regulations, and recent market developments

  • Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments for the Passenger Cars Powertrain market

  • Detailed company profiles


The geographical scope of the Passenger Cars Powertrain market report is divided into five regions: North America, Asia Pacific, Europe, Middle East & Africa, and South & Central America. The Passenger Cars Powertrain market in Asia Pacific is expected to grow significantly during the forecast period.

The Asia Pacific Passenger Cars Powertrain market is segmented into China, Japan, South Korea, India, Australia, New Zealand, Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam, Taiwan, and Bangladesh. The Asia-Pacific (APAC) region is poised to not only dominate the global passenger car powertrain market in terms of volume but also to witness the highest and fastest growth rate in the coming years. This exceptional growth is a multifaceted phenomenon driven by a powerful combination of government ambition, manufacturing prowess, and burgeoning consumer demand.

The Asia Pacific region experiences substantial growth in its Passenger Cars Powertrain market because of Aggressive Government Policies and Subsidies, Manufacturing and Supply Chain Supremacy, Rising Urbanization and Economic Growth etc.

China continues to be the unparalleled leader. Its market is characterized by hyper-competition among domestic brands (like BYD, Nio, and XPeng) and international giants, leading to rapid innovation and a wide variety of EV models available to consumers.

India represents the next frontier of growth. While currently dominated by ICE vehicles, the passenger EV market is expanding at an explosive rate from a low base, driven by new model launches and growing consumer awareness.

With mature markets such as Japan and South Korea driving the technological innovation through highly efficient hybrid systems and cutting-edge BEV technology. Other ASEAN countries like Thailand, Indonesia, and Vietnam are emerging as the next wave of growth. With government support and investment from major Chinese, Japanese, and Korean automakers, this region is quickly becoming a key battleground for market share in the affordable EV segment.

Passenger Cars Powertrain Market Research Report Guidance

  • The report includes qualitative and quantitative data in the Passenger Cars Powertrain market across drive type, propulsion, sales channel, and geography.

  • The report starts with the key takeaways (chapter 2), highlighting the key trends and outlook of the Passenger Cars Powertrain market.

  • Chapter 3 includes the research methodology of the study.

  • Chapter 4 further includes ecosystem analysis along with Porter’s analysis.

  • Chapter 5 highlights the major industry dynamics in the Passenger Cars Powertrain market, including factors that are driving the market, prevailing deterrents, potential opportunities as well as future trends. Impact analysis of these drivers and restraints is also covered in this section.

  • Chapter 6 discusses the Passenger Cars Powertrain market scenario, in terms of historical market revenues, and forecast till the year 2031.

  • Chapters 7 to 9 cover Passenger Cars Powertrain market segments by product type, portability, technology, application, end user and geography across North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America. They cover market revenue forecast and factors driving the market.

  • Chapter 10 describes the competitive analysis along with the heat map analysis for the key players operating in the market.

  • Chapter 11 describes the industry landscape analysis. It provides detailed description of business activities such as market initiatives, new developments, mergers, and joint ventures globally, along with a competitive landscape.

  • Chapter 12 provides detailed profiles of the major companies operating in the Passenger Cars Powertrain market. The companies have been profiled on the basis of their key facts, business descriptions, products and services, financial overview, SWOT analysis, and key developments.

  • Chapter 13, i.e., the appendix is inclusive of a brief overview of the company, list of abbreviations, and disclaimer.


Passenger Cars Powertrain Market News and Key Development:

The Passenger Cars Powertrain market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. A few of the key developments in the Passenger Cars Powertrain market are:

  • On June 9, 2025, Tata Motors has earmarked an investment of INR 35,000 crore (US$ ~350 billion) in passenger vehicle business in 5 years. The investment will go towards expanding the Tata Group company's products, integrating next-generation technologies and improving profitability

  • In July 2024, Stellantis extends benchmark hybrid powertrain across Europe. The global automaker, is rapidly expanding its hybrid vehicle offerings in Europe, responding to customer demand. The company offered 30 hybrid models in 2024, with six more slated for introduction by 2026.


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Business Market Insights is a market research platform that provides subscription service for industry and company reports. Our research team has extensive professional expertise in domains such as Electronics & Semiconductor; Aerospace & Défense; Automotive & Transportation; Energy & Power; Healthcare; Manufacturing & Construction; Food & Beverages; Chemicals & Materials; and Technology, Media, & Telecommunications

Author's Bio
Akshay
Senior Market Research Expert at Business Market Insights

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