All-Wheel Drive Market: Current Analysis and Forecast (2024-2032)

All-Wheel Drive or AWD refers to a system in which a car's engine sends power to move all four wheels. AWD, as its name indicates, sends power to each wheel to help keep your vehicle driving better than a vehicle with front-wheel drive or rear-wheel drive on slippery, ice-covered roads. In reality, there are two types of AWD systems. One system, called "full-time AWD", is where a car powers all four wheels at the same time. The second system has the capability of delivering power to all of the tires but only does so when it is required. Most of the time, it runs on two-wheel drive mode. That is the reason why the latter system is called "part-time AWD."

Both full-time and part-time AWD systems usually operate without direction from the driver. All four wheels, instead of two, receive torque through a set of axles and spin at different speeds simultaneously. AWD vehicles are loved particularly by people who live in areas where the weather tends to be snowy and rainy. Since an AWD system offers additional traction on slippery roads, it is safer and makes drivers more confident in handling. Acceleration can also be easier as traction is equally transmitted among all four tires, with less slippage. Because your car can drive stably, you rarely feel nervous due to a sudden slip. In addition, its excellent traction control makes it popular in high-performance vehicles.

The All-Wheel Drive Market is expected to grow with a significant CAGR of 7.86% during the forecast period (2024-2032). All-Wheel Drive market has experienced a robust growth due to technological advancements, changing consumer preferences, and evolving industry trends. Furthermore, growing need for improved vehicle performance and safety is also boosting the market growth. All-wheel drive ensures greater stability and traction, and thus makes a car highly desirable in areas with harsh weather conditions, i.e., heavy rain and snow. As consumers become more aware of the safety benefits associated with wheel-drive vehicles, their preference for these systems has intensified, contributing to market expansion. On November 15, 2024, Lexus announced that the 2025 Lexus RZ brings more options to consumers in the BEV marketplace, adding the entry-level grade to its RZ 300e and RZ 450e AWD lineup. With this addition, the RZ now offers three grades as it continues to showcase a minimal yet refined interior and a smooth, quiet ride that's become synonymous with the Lexus brand. The RZ is offered in three grades, including an entry-level grade (RZ 300e, RZ 450e AWD), Premium (RZ 300e Premium, RZ 450e Premium) and Luxury (RZ 300e Luxury, RZ 450e AWD Luxury). The RZ 300e, RZ 450e AWD and Premium grade ride atop 18-inch wheels in a Dark Gray Metallic finish while the Luxury grade is outfitted with 20-inch wheels in a Black and machined finish.

c For instance, On September 25, 2024, Audi of America announced the "2025 Audi Q6 e-tron" to be launched in the U.S. with three different derivatives before the end of 2024: the rear-wheel drive Q6 e-tron, as well as all-wheel drive Q6 e-tron quattro(R) and SQ6 e-tron models. Coupled with a broad portfolio of the latest technology and safety features thanks to the all-new Premium Platform Electric (PPE) and E3 1.2 electronic architecture, all Q6 e-tron models are available in Premium, Premium Plus and Prestige trim levels. Based on a new domain computer structure with five high-performance computers, the new E3 1.2 architecture controls all vehicle functions, from infotainment and driving modes, through to semi-automated driving in later evolutionary stages.

Based on the vehicle type, the market has been divided into passenger cars and commercial vehicles. The passenger cars segment held a significant share of the market owing to increased preference for sport utility vehicles (SUVs) amongst buyers. The modern SUV checklist all the boxes that consumers want -it provides a car-like ride with sufficient space, an elevated stance for better visibility and road clearance, and an image of an adventurous lifestyle vehicle. For instance, on March 21, 2024, Volkswagen presented the new ID. Buzz GTX: The electric Bulli equipped with a powerful performance drive system will in future be available with two wheelbases, two battery sizes and a choice of 5-, 6- or 7-seater. It also comes with standard 4MOTION all-wheel drive for optimum pulling power and traction in every driving situation. In addition, both GTX models share an individualized design.

Based on the Propulsion, the market has been divided into ICE vehicles and electric vehicles. The ICE vehicles segment held a significant share of the market owing to the proven strength of diesel and petrol powertrains. Despite the rise of alternate technologies, conventional engines remain the reliable backbone of commercial vehicle fleets and workhorses that need to clock high annual mileages dependably. Refined over decades of continuous improvement, the ICE drivetrain combination of an engine, transmission, and all-wheel drivetrain rarely lets businesses down barring severe neglect or accidents. For instance, On February 27, 2024, Toyota announced the launch of New Toyota GR Yaris which is claimed as a master of ice and snow due to its maximum power from the in-line three-cylinder 1.6-litre turbocharged engine increased to 280 DIN hp/206 kW, with peak torque of 390 Nm, increased body rigidity, strengthened suspension, full-time all-wheel drive and new selectable drive modes.

For a better understanding of the market adoption of All-Wheel Drive the market is analyzed based on its worldwide presence in countries such as North America (U.S., Canada, and the Rest of North America), Europe (Germany, France, U.K., Spain, Italy, Rest of Europe), Asia-Pacific (China, Japan, India, Rest of Asia-Pacific), Rest of World. The Asia-Pacific has a substantial market share because of urbanization, rising disposable incomes, and growth of the automotive sector. The leading countries that are experiencing this growth are China, Japan, and India, where the customers in these nations are opting for all-wheel drive cars because of their better performance and safety features. The variety of climatic conditions that Asia Pacific faces, ranging from monsoons to hilly regions, has also fueled the demand for all-wheel drive systems. For instance, on Nov 13, 2024, the all-wheel-drive Exeed Exlantix ET SUV extended-range EV (EREV) version has begun production and will launch pre-sales at the Guangzhou Auto Show on November 15. The ET first launched earlier this year as an EV and a single-motor EREV. Equipped with the Snow Leopard 4WD system, the new car has an acceleration time of 4.8 seconds. Exeed is an upmarket brand from Chery. Exlantix is a range from the brand dedicated to new energy vehicles (all-electric and EREV) that are purposely designed as such rather than a conversion of an ICE model. It should be noted that the Exlantix range is known as Sterra in the domestic Chinese market.

Some of the major players operating in the market include BorgWarner Inc., ZF Friedrichshafen AG, Magna International Inc., Dana Limited, JTEKT Corporation, Nissan Motor Co., Ltd., Honda Motor Co., Ltd., American Axle & Manufacturing Inc., GKN Automotive Limited, Vitesco Technologies GmbH.