Industrial and Automotive Power Transmission Products Market Trends

Growth Drivers

• Investment in robotics and industrial automation: The sustained and international investment in automating manufacturing as well as logistics to bolster resilience and productivity is considered the primary driver for the industrial and automotive power transmission products market. This has created a huge demand for servo drives, automated guided vehicle drivetrains, robotic actuators, and precision motors. According to an article published by the Trade Government in 2022, the aspect of foreign direct investment (FDI) in manufacturing, especially in the U.S., demonstrates 40.1% of overall FDI, based on which automation plays a pivotal role in attracting investments. Besides, as stated in the September 2024 Automate Organization article, startup funding in automation and robotics has recovered with an overall USD 748.9 million fund provision by U.S.-based organizations, thus suitable for the market’s growth.
• International push for vehicle electrification: The presence of strict regulations for emissions and customer transition is pressuring rapid automotive electrification. This is directly driving huge investment and increasing the need for electric vehicle-based transmission products, which, in turn, is bolstering the industrial and automotive power transmission products market. As stated in the 2024 Europe Commission report, emissions gradually reduced by 7.5%, resulting in international emissions reduction by 6.8% in 2022 to 6.1% as of 2023. Besides, across all sectors in Europe, the highest drop was witnessed in the power industry field, wherein emissions effectively decreased by 20.1%. In addition, the industrial combustion and processes also displayed the second-highest decrease by 8.1% as of 2022, thus denoting an optimistic outlook for the overall industrial and automotive power transmission products market.
• Expansion in renewable energy: The worldwide build-out of solar and wind power generation is directly uplifting the demand for large-scale and specialized power transmission products, including solar tracker drives and high-torque wind turbines. As per an article published by the IEA Organization in 2025, the global renewable electricity generation is predicted to climb more than 17,000 TWh, demonstrating an increase by nearly 90% from 2023. Besides, modernized bioenergy is considered the largest source of renewable energy, with over 50% share of worldwide utilization as of 2023. Recently, it has been observed that with yearly additions surging to almost 560 GW, there is a huge growth opportunity for renewable electricity, which creates a positive impact on the industrial and automotive power transmission products market’s growth.

Challenges

• Skill gap and technical complexity in system integration: The aspect of modernized power transmission is no longer considered a purely mechanical approach; instead, it has emerged as a mechatronic field that demands in-depth expertise in power electronics, data analytics, controls, and software. Besides, the trend towards integrated systems has created an effective challenge in the industrial and automotive power transmission products market. This includes a critical shortage of technicians and engineers with cross-disciplinary skills required for maintaining, commissioning, installing, and designing these complicated systems. This particular skill barrier exists both among end user consumers and at manufacturing giants, thus negatively affecting the market’s expansion.
• Commoditization pressure and intense price competition: The industrial and automotive power transmission products market for off-the-shelf and standard power transmission components is significantly competitive, and experiences intensified pressure from low-cost manufacturers, especially in Asia. This particular competition is driving down margins and pushing the overall industrial and automotive power transmission products market towards commoditization, wherein products are eventually differentiated by price rather than technical features. Besides, for established organizations, this has created a challenging balance act, and therefore, to overcome this, they need to compete on cost in volume-based commodity segments, while also focusing on investing in research and development for effectively gaining advanced and high-margin solutions.