Transmission Market Outlook: Are you positioned for growth?

As we close out 2023 and plan for 2024, there is a lot of noise about where the economy is headed. Every presidential election year, doom and gloom or empty optimism is what you can expect from news outlets. I hope to offer a deeper and broader analysis of what matters to you. The Automotive Transmission market looks steady for the next ten years. Are you positioned to compete and grow your business?

Market Outlook for Automotive Transmissions

The outlook for the Transmission market is strong. Currently, the global market is $62.46B and is expected to reach nearly $100B by 2032. That’s a compound annual growth rate (CAGR) of 6.05%. Regions with the highest projected growth are Asia-Pacific, North America, and Europe. The chart above (top, middle) represents the estimated growth expected in Billions; from 2022 to 2032, these regions are expected to grow 84%, 33%, and 58%, respectively.

Market Drivers

“The market is expected to be fueled by the increasing use of Continuously Variable Transmissions (CVT) and Dual-Clutch Transmission (DCT) technologies in place of manual and automatic systems due to the shift in consumer demand for fuel-efficient products with improved performance as the key market driver enhancing market growth (www.marketresearchfuture. com).” After understanding market trends, assessing your strategic competitive advantage by using a framework such as Porter’s Five Forces will position your business for growth.

Porter’s Five Forces

Competitive Rivalry: How many competitors do you have? Are their products and services as good as yours? If so, how can you establish a strong advantage over them? Minimal competitive rivalry will give tremendous competitive power and the ability to make a healthy profit.

Supplier Power: How easy is it for your suppliers to raise prices? If you have several to choose from, you can switch to a cheaper alternative. However, if you have limited suppliers, they have the power to raise prices, thus driving up your costs and eating away at profits or forcing you to raise prices.

Buyer Power: How easy is it for customers to drive down prices? If your market is small, they have the power. However, if there are many customers, you can better control your pricing power and raise prices to increase profit.

Threat of Substitutes: How easily can customers find another way to get what you’re offering? The easier it is, the less power you have.

Threats of New Entrants: How easy is it for new competitors to enter the market? The easier it is for others to swoop in, the harder it is to maintain profitability.

If executed well, the Porter’s Five Forces Analysis will allow you to see where your company is at risk so you can overcome any obstacle. If you’re considering entering new markets, you can see how profitable you can be at a glance.

Using the Porter’s Five Forces framework is a great first step in assessing your competitiveness in the market. If you would like a customized approach or guidance on assessing strategic business cases, I can help you.

If you already have an investment advisor, congratulations. However, if you’d like to learn more about what investment advisors do for their clients, please contact me at empiriKalpartners. com for an individual assessment.