Limited Slip Differential (LSD) Market: Global Size, Share, Trends, Growth and Forecast, 2022-2032

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Limited Slip Differential (LSD) Market: Overview and Definition

A limited-slip differential (LSD) is a type of differential that is commonly used in vehicles to improve traction and handling. The differential is a critical component of the drivetrain, as it is responsible for transmitting power from the engine to the wheels.

In a conventional differential, power is distributed equally to both wheels, regardless of whether one wheel has more traction than the other. This can lead to wheel spin and loss of traction, particularly in slippery or uneven conditions.

A limited-slip differential is designed to address this problem by using a series of clutches or gears to distribute power between the wheels based on their relative traction. This helps to prevent wheel spin and improves traction, particularly in off-road or high-performance vehicles.

The LSD market includes a variety of products and services related to the design, manufacture, and installation of limited-slip differentials in vehicles. This includes aftermarket LSDs for vehicles that did not originally come with this technology, as well as specialized LSDs for high-performance or racing applications.

The market for limited-slip differentials is driven by a variety of factors, including the growing demand for high-performance and off-road vehicles, as well as increasing awareness of the benefits of LSD technology for improving handling and traction in all driving conditions.

Limited slip differential or LSD is the part of a car's drive system.  It is designed for helping the engine to put its power to a road more efficiently and to ensure enhanced performance and handling of the vehicle. In addition, it eliminates the uneven power distribution in the vehicles by applying more rotational drivetrain energy to the wheel with a less grip. Such differential is found in all modern commercial vehicles, passenger vehicles, and electric vehicle. The main benefit of employing a vehicle with an LSD is to improve the way it drives along with the more control over a power delivery of the vehicle. These benefits significantly drives growth of the global limited slip differential market.

The market for limited slip differential is expected to reach rise at a CAGR of 4.5 percent during the forecast period. The rising demand for better traction on roads as well as fuel efficiency are driving the growth of the limited slip differential market.


Growth of the global limited slip differential market is mainly attributed to a continuous growth in the automobile sector. Innovations and advanced technologies in the automotive industry such as active limited slip differentials and electronic limited slip differentials are anticipated to drive the market during forecast period. Also, the factors such as the increased disposable income of the people and their inclination towards luxury vehicles and rise in demand of heavy as well as light commercial vehicles are expected to considerably contribute to the market growth. In addition to this, several insurance company are providing insurance premium discount for vehicles that are equipped with advanced technologies such as limited slip differentials. This factor further drives demand for the limited slip differential. However, the factors such as high initial cost and declining sales & production of automotive since last few years are expected to hamper the market growth during forecast period. On the other hand, emergence of the electronic limited slip differential (ELSD) with the introduction of vehicle electrification is key opportunity for the market growth during forecast period.

Throughout the forecast period, passenger cars will continue to hold a dominant share of global limited slip differential market. This is attributed to a surge in sales of passenger cars due to the improved standard of living and increasing per capita income. However, the commercial vehicles segment is expected to witness highest growth rate during the forecast period. This is due to increasing demand for commercial vehicles across the developing nations such as China and India, owing to increased industrial production and urbanization. For example, the commercial vehicle market in the Indian automotive industry observed significant growth rate in both medium & heavy commercial as well as light commercial vehicle segments.

As per the operation, the mechanical limited slip differential segment will continue to hold a dominant share of global limited slip differential market. However, electronic limited slip differential segment is expected to witness highest growth rate during the forecast period. This is due to emergence of innovative electronic limited slip differential to improved traction capability.  For instance, in August 2020, Eaton launched InfiniTrac, hydraulically actuated and an electronically controlled variable-bias limited-slip differential that offers optimized vehicle performance at any speed and traction condition.

According to the system, active limited slip differentials segment will continue to hold a dominant share of global limited slip differential market.  This is due to rise in preference to the active limited slip differentials are over passive limited slip differential as such system are direction and speed sensitive which helps in controlling the vehicle..


By Vehicle Type

  • Passenger Cars
  • Commercial Vehicles

By Operation:

  • Mechanical Limited Slip Differential
  • Electronic Limited Slip Differential

By System:

  • Active Limited Slip Differential
  • Passive Limited Slip Differential

By Sales Channel:

  • Original equipment market
  • Aftermarket

By Region:

  • North America
  • Latin America
  • Europe
  • Asia Pacific
  • Middle East & Africa


North America is likely to be the most profitable region throughout forecast period. This is due to the increased demand for luxury vehicles in U.S. and Canada. In addition, the automotive industry players in this region are actively introducing innovative limited slip differential systems in their vehicles. This factor further fuels growth of the market in the region. For instance, the 2018 Ford Focus RS Limited Edition features a Quaife mechanical limited-slip differential for the front axle for more control in the corners.

In addition to this, Europe holds a prominent share for the global limited slip differential market owing to large number of automobile and component manufacturers in the region.

However, the Asia-pacific region is anticipated to experience highest growth rate during forecast period. The region is home to several leading vehicle production hubs such as Japan and China. Therefore, as the vehicle production increases, the demand for limited-slip differential systems is expected to grow at a significant rate. In addition, the India & China are projected to contribute considerable share throughout the forecast period, due to increasing automobile sales driven by surge in disposable income of population along with the high living standard.


  • Yukon Gear & Axle
  • DANA Limited
  • JTEKT Corporation
  • GKN Driveline
  • Eaton
  • BorgWarner Inc.
  • CARROSSER Co. Ltd.
  • AAM
  • Quaife Engineering Ltd.

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  • Publication date: 18th February 2023
  • Base year: 2022
  • Forecast year: 2023-2033
  • Format: PDF, PPT,Word,Excel

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