Motor Vehicle Transmission and Power Train Parts Manufacturing (U.S.)

NAICS 2022 code 33635 — an investor's primer (rollup level)

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1. Overview

This is the industry that makes the parts carrying engine power to the wheels: transmissions (manual and automatic), driveshafts, axles, differentials, clutches, torque converters, constant-velocity (CV) joints, and universal (U) joints [1][2]. If the engine is the heart, the "power train" (also spelled powertrain) is everything between the crankshaft and the tire.

This page covers NAICS 33635, a five-digit NAICS industry. In the North American Industry Classification System (NAICS) — the standard the U.S. government uses to count businesses — a five-digit code is one step up from the most detailed six-digit "national industry" level. Code 33635 contains exactly one six-digit child, 336350, of the same name. In practice, the two are the same thing.

Why an investor should care: this is a large, concentrated, deeply cyclical slice of the U.S. auto-parts supply chain — roughly $47 billion in annual U.S. shipments and 75,000–85,000 workers depending on which federal survey and year you use [3][4][5] — sitting at the center of the shift to electric vehicles (EVs), a 2025 auto-tariff regime, and a sharp 2026 reversal in federal emissions policy. Full detail on companies, economics, and the investment case lives in the 336350 primer; this page gives the rollup and points you there.

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2. What's inside — and why this level equals its one child

NAICS groups businesses in a tree: broad sectors (2-digit) narrow to subsectors (3-digit), industry groups (4-digit), NAICS industries (5-digit), and finally national industries (6-digit). Code 33635 sits at the 5-digit rung.

Most 5-digit codes fan out into several 6-digit children. This one does not. 33635 has a single child, 336350 — same name, same scope. When a 5-digit industry has only one 6-digit child, the two are definitionally identical: every establishment, every dollar of shipments, and every worker counted at 33635 is also counted at 336350. There is nothing in the parent that is not in the child, and no sibling industries to blend in. So this level is a pass-through to 336350, and its economics, boundaries, and competitive structure are exactly those of 336350.

One practical wrinkle worth knowing at this rung: federal agencies do not all publish at the same digit level. The Census Bureau reports shipments, firms, establishments, and payroll at 336350, while the Bureau of Labor Statistics publishes its monthly employment series and its workplace injury-and-illness rates at 33635 [5][26]. Because the two codes cover the same universe, a statistic tagged to either one describes this industry — the digit count tells you which agency produced it, not which activity it measures.

For the full treatment — precise product scope, what's excluded (engines are 336310, brakes are 336340, and so on), why an EV "e-axle" straddles those boundaries, the three-layer ownership mix of public Tier-1 suppliers, foreign-owned and captive operations, and privately held specialists — see the 336350 primer. The rest of this page stays at the rollup.

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3. Size

Our federal ground-truth figures for 33635 (identical to 336350, since it is the only child):

Two employment numbers, one industry. The earlier version of this page carried a single "~85,000 workers" figure. The child primer now shows both federal readings, and they differ: County Business Patterns is establishment-based and annual (85,065 for 2023), while the BLS Current Employment Statistics payroll survey is monthly and reported 75,400 jobs in June 2025 and 74,600 in May 2026 [4][5]. That is a gap of methodology and timing, not a contradiction — and the direction of travel in the monthly series is worth noting on its own. Do not average them or add them.

Concentration. The largest 4 firms make 39.5% of shipments; the top 8, 54%; the top 20, 77.7%; the top 50, 91.7% [7]. The Herfindahl-Hirschman Index (HHI, a standard concentration gauge where 10,000 is a monopoly) is 567.7 — "unconcentrated" by antitrust screens, because scale is spread across several big players plus a long tail of small shops, even though a handful dominate [7].

Undercount caveat. These federal figures are reasonably complete for a capital-intensive factory industry — this is not a gig-worker or individually owned field where the government misses most activity. Two blind spots still matter. First, much of the largest players' output is made outside the U.S. (Mexico especially) and does not appear in these U.S.-only totals, so the domestic figure understates the footprint of the companies you'd actually invest in. Second, EV "e-drive" units are classified inconsistently, so the "transmission" data will increasingly understate real power-train activity as electrification advances. Treat the $47 billion as a solid floor for U.S. factory output, not a measure of the global industry.

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4. Investable universe — where the value concentrates

Because 33635 equals 336350, all the value sits in that single industry; there are no sibling industries to spread across. Within it, public pure-plays are few and most of the tonnage is private or foreign-owned. The clean public U.S. names are Allison Transmission (ALSN), ~$3.0 billion of FY2025 revenue [11]; Dana Incorporated (DAN), ~$7.5 billion from continuing operations [9]; Dauch Corporation (DCH) — the renamed American Axle following its February 2026 combination with GKN Automotive, roughly $12 billion combined [10]; and diversified supplier BorgWarner (BWA), ~$13.4 billion, where power train is one line among several [8]. Those are total-company global revenues shown for scale, not the U.S.-only 336350 slice. Note the ticker change: this level's second-largest public name is no longer AXL.

The bulk of output comes from foreign-owned and captive operations — Germany's ZF (93.8% owned by the Zeppelin Foundation and effectively unlisted) [14], Japan's Aisin, and the in-house transmission and EV-drive divisions of the automakers, which also manufacture products competing with their merchant suppliers [13] — plus privately held gear, forging, and remanufacturing shops. There is no single instrument that buys "the industry."

One dimension the child now quantifies and this page previously left qualitative: customer concentration is severe across the public names. Dana's ten largest customers were 76% of 2025 sales and BorgWarner's ten largest were 71% [12][13]; at legacy American Axle (now Dauch), GM, Ford, and Stellantis alone were 44%, 15%, and 13% of 2025 sales [10]. Supplier concentration (CR4, CR8) tells you who makes the industry's output; customer concentration tells you how few buyers stand between these companies and a revenue shock. Full company detail and the private/foreign/captive map are in the 336350 primer (§4).

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5. How the money works

This is a capacity-utilization, volume-and-fixed-cost business — classic cyclical manufacturing, not a subscription model. Sales rise and fall with how many vehicles a supplier's automaker customers build; when plants run full, heavy fixed costs (machinery, dies, buildings) spread over more units and margins expand fast, and when volumes drop the same costs crush margins (operating de-leverage). Growth without more cars comes from selling more dollars of parts per vehicle (say, an all-wheel-drive system or an integrated e-axle instead of a plain axle) and from winning multi-year OEM (original-equipment-manufacturer, i.e. automaker) "program awards" that fill the forward order book.

The contract structure is thinner protection than it looks: OEM agreements generally cover a customer's requirements for a product but ordinarily carry no minimum purchase quantity, and just-in-time delivery means a shutdown at a supplier, customer, or sub-tier can halt a line quickly [13]. Materials dominate the cost base — Allison's 2025 cost of sales ran 66% direct materials, 26% manufacturing overhead, 8% direct labor [15] — and steel and aluminum moves are usually passed through to customers with a lag, against a standing OEM expectation of annual price reductions [13]. Aftermarket transmission and driveline rebuilding, which is inside this NAICS code, is smaller but higher-margin and far less cyclical.

Margin dispersion within this one industry is the headline finding, and it is wider than a single industry code suggests. Allison earned a 37.5% adjusted EBITDA margin on $3.010 billion of 2025 sales, defending a niche (fully automatic transmissions for vocational and heavy trucks) with high switching costs, three-to-five-year agreements covering more than 90% of North American unit volume, commodity-risk sharing, and an installed base served through roughly 1,500 distributor and dealer locations [11][15]. Dana's continuing operations earned 8.1% on $7.500 billion [9]; BorgWarner reported a 10.7% companywide adjusted operating margin and 18.4% in Drivetrain & Morse Systems [8][13]. Contested, electrification-exposed light-vehicle driveline work is structurally thinner than a protected commercial-truck franchise. The mechanics are detailed in the 336350 primer (§5).

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6. Demand drivers

The master driver is vehicle production and sales volume — new-car demand (measured by the seasonally adjusted annual rate, or SAAR, of sales) plus commercial-truck and freight cycles, which run on their own clock and drive Allison in particular [15]. The drivetrain mix matters too: all-wheel drive, larger trucks and SUVs, and towing all raise driveline dollar content per vehicle. An aging vehicle fleet supports steady, partly counter-cyclical aftermarket repair demand.

The pivotal swing factor is electrification: a battery EV typically uses a single-speed reduction gearbox rather than a multi-ratio transmission, which structurally shrinks the traditional transmission market but creates demand for e-axles, reduction gears, and integrated e-drive units — high-performance and heavier EVs use 2-speed units, and ZF and Aisin are winning multi-year EV drive contracts, so the category is migrating rather than vanishing [16].

The child research adds a near-term nuance this page previously lacked: U.S. mix is running more hybrid than a straight-line BEV forecast implies. Electrified vehicles were about 22% of U.S. light-duty sales in 2025, but battery-electrics were only 7.5% and plug-in hybrids 1.6%, with federal purchase credits expiring September 30, 2025 [17]. By the second quarter of 2026, conventional hybrids hit a record 16% of sales while battery-electrics were 6% and plug-in hybrids 1.4% [18]. Hybrids add clutches, gearing, and electric-machine integration — content that favors suppliers able to ship complete modules, and a meaningful bridge for firms whose EV backlog is not yet replacing eroding internal-combustion (ICE) content. See the 336350 primer (§6).

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7. Regulation

There is no economic regulator setting prices here; exposure is indirect but real, and it moved sharply since this page was last written.

Fuel-economy and emissions standards have reversed direction. U.S. Corporate Average Fuel Economy (CAFE) rules and EPA/California tailpipe limits historically pushed automakers toward more gears, more efficient transmissions, and electrification. In February 2026, EPA rescinded the federal motor-vehicle greenhouse-gas endangerment finding and the associated highway-vehicle GHG standards; traditional-pollutant rules were not removed by that action [19]. That eases the immediate federal push toward battery-electrics but raises planning uncertainty rather than lowering it — state rules, overseas regulation, litigation, and globally engineered OEM platforms all persist, and power-train tooling can outlive an administration.

Trade policy remains the dominant near-term story. Under Section 232 of the Trade Expansion Act, the U.S. imposed 25% tariffs on imported automobiles (April 3, 2025) and on key auto parts including transmissions and power-train components (May 3, 2025), with partial relief for U.S. content under the U.S.-Mexico-Canada Agreement (USMCA) and administrative cost to certify it [20][21]. Because so much U.S. transmission and driveline content is produced in Mexico, this directly hits the cost structure of the exact companies in this industry — Dauch, for one, flags its Guanajuato complex as a significant contributor to sales, profit, and cash flow and names tariffs and the USMCA review as concentration risks [10]. Full detail in the 336350 primer (§7).

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8. Consolidation

The industry is scale-driven and consolidating hard, on the logic that spreading expensive EV-drive R&D over more volume is how incumbents survive the transition. Two deals reshaped it, and the first has now closed:

• American Axle + Dowlais → Dauch Corporation. AAM's acquisition of UK-listed Dowlais (owner of GKN Automotive and GKN Powder Metallurgy) closed in February 2026, and the combined company trades as Dauch Corporation (DCH) — a driveline-and-metal-forming supplier with roughly $12 billion of combined revenue, ~$300 million of targeted annual synergies, and operations across two dozen countries. Total consideration was approximately $1.7 billion [10][22]. This supersedes the ~$1.44 billion, "expected to close in early 2026" framing this page previously carried.
• Allison + Dana Off-Highway. Allison's ~$2.7 billion purchase of Dana's off-highway business pushes Allison into construction, agriculture, and mining drivetrains while letting Dana refocus on light- and commercial-vehicle driveline [23][24].

Scale, though, does not settle the timing question. ZF reported a €2.1 billion 2025 loss after a major e-mobility charge tied to ending projects whose slower-than-expected EV adoption would not support expected profitability [25] — the clearest evidence that in this industry, investing too early into electrification is as expensive as investing too late. The competitive and deal detail is in the 336350 primer (§8).

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9. Risks

The same risks that define 336350 define this level, with two sharpened by the latest research:

• EV substitution — and technology mistiming in either direction. Single-speed gearboxes and automaker insourcing can shrink the merchant transmission market [16]; ZF's €2.1 billion loss shows the symmetric danger of building e-mobility capacity ahead of actual adoption [25].
• Deep cyclicality and operating leverage — earnings amplify every downturn in vehicle production.
• Customer concentration — now quantified: 76% of Dana's 2025 sales and 71% of BorgWarner's came from ten customers, and GM, Ford, and Stellantis together were 72% of legacy American Axle's [10][12][13].
• 2025 tariffs and supply-chain relocation out of Mexico [20][21], and steel and aluminum commodity swings.
• Integration and leverage risk from the 2025–2026 mega-mergers.
• Labor. A heavily unionized U.S.-and-Mexico footprint — 49% of Allison's U.S. employees were UAW-represented at year-end 2025 [15] — carries strike and wage-inflation risk. Physical risk is moderate for heavy manufacturing: BLS reported 2.4 recordable injury and illness cases per 100 full-time-equivalent workers at NAICS 33635 in 2024, with a 1.6 rate for cases involving days away, restriction, or transfer [26].

Each is expanded in the 336350 primer (§9).

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10. How to invest, and outlook

Because 33635 is identical to 336350, the investment approach is the same. Public routes: Allison (ALSN) for defensive, high-margin commercial-truck exposure with a slower EV threat; Dauch (DCH) and Dana (DAN) for higher-beta, more EV-exposed light-vehicle driveline bets; BorgWarner (BWA) as a diversified supplier pivoting toward electrification; foreign listings such as Aisin, Magna, and Schaeffler for international driveline exposure; and broad auto-parts or industrial exchange-traded funds (ETFs) for diversified, indirect exposure — there is no dedicated "transmission and driveline" fund. Because these are cyclicals, judge valuation multiples across a full auto cycle rather than at a peak or trough. Private routes are where most of the industry lives: private equity in gear, forging, and machining shops; roll-ups of fragmented aftermarket remanufacturers; and growth capital into EV-drive-program suppliers, feasible given the 383 firms and the SBA's generous 1,500-employee small-business threshold [3][6].

Watch list: whether each supplier's EV-drive backlog is growing faster than its ICE content erodes; how the Section 232 regime settles and whether Mexican production must relocate [20][21]; the heavy-truck cycle; execution on the Dauch and Allison–Dana integrations [10][23]; metal prices and interest rates; and whether the EPA GHG rescission survives a future administration [19].

A classification warning that belongs at this rung. The most common analytical mistake is to treat 33635/336350 as a global "automotive transmission market" and attach diversified suppliers' revenues to it. NAICS classifies U.S. establishments by primary activity; it is not a product taxonomy, does not measure company market share, includes captive OEM and rebuilding operations, and may place different facilities of the same company under different codes. Company segment revenue, global transmission forecasts, and Census shipments are not interchangeable.

The judgment: a mature, cyclical, consolidating industry facing a genuine technological reordering — one whose internal margin spread (Allison's 37.5% against Dana's 8.1%) says more about where to put money than the industry average does [9][11]. The optimistic case is that today's transmission and axle makers become tomorrow's e-axle and reduction-drive makers, holding content per vehicle while consolidation lifts margins; the bearish case is that automakers insource electric drivetrains and single-speed simplicity permanently shrinks the merchant market. Most likely it splits — defensible niches (heavy-truck automatics, aftermarket remanufacturing, hybrid modules, high-content AWD/e-axles) hold or grow while commoditized ICE content fades. Own it selectively and cyclically, not as a buy-and-forget compounder.

For full detail on every section above, see the primer for NAICS 336350 — Motor Vehicle Transmission and Power Train Parts Manufacturing, which this level passes through to.

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Sources

1. NAICS Association, "NAICS Code 336350 — Motor Vehicle Transmission and Power Train Parts Manufacturing," 2022. https://www.naics.com/naics-code-description/?code=336350
2. U.S. Census Bureau, "2022 NAICS Definition — 336350 Motor Vehicle Transmission and Power Train Parts Manufacturing," 2022. https://www.census.gov/naics/?input=336350&year=2022
3. U.S. Census Bureau, Economic Census / Concentration statistics, NAICS 336350 (receipts, firm count, concentration ratios, HHI), 2022. (Histometrics ingested federal statistics.)
4. U.S. Census Bureau, County Business Patterns, NAICS 336350 (employment, establishments, annual payroll), 2023. (Histometrics ingested federal statistics.)
5. U.S. Bureau of Labor Statistics, Current Employment Statistics, NAICS 33635 (employment 75,400 June 2025; 74,600 May 2026), 2026. https://www.bls.gov/web/empsit/ceseeb1b.htm
6. U.S. Small Business Administration, "Table of Small Business Size Standards," NAICS 336350 (1,500 employees), 2023. https://www.sba.gov/document/support-table-size-standards
7. U.S. Census Bureau, Economic Census, "Concentration Ratios / Share of value of shipments by largest firms," NAICS 336350 (CR4 39.5%, CR8 54%, CR20 77.7%, CR50 91.7%, HHI 567.7), 2022. (Histometrics ingested federal statistics.)
8. BorgWarner Inc., 2025 Full Year Results (net sales, adjusted operating margin 10.7%), SEC/Press Release, 2026. https://www.sec.gov/Archives/edgar/data/908255/000090825526000009/a20251231ex991pressrelease.htm
9. Dana Incorporated, 2025 Full Year Results (sales $7.5B continuing ops; adjusted EBITDA $610M; 8.1% margin), SEC/Press Release, 2026. https://www.sec.gov/Archives/edgar/data/26780/000119312526056030/d106316dex991.htm
10. Dauch Corporation (formerly American Axle & Manufacturing), 2025 Annual Report (combined revenue, customer concentration, Dowlais acquisition ~$1.7B, Guanajuato risks), SEC filing, 2026. https://www.sec.gov/Archives/edgar/data/0001062231/000106223126000083/a26-aamx0035_2025annualrep.pdf
11. Allison Transmission Holdings, Inc., 2025 Full Year Results (net sales $3.010B; adjusted EBITDA $1.130B; 37.5% margin), SEC/Press Release, 2026. https://www.sec.gov/Archives/edgar/data/1411207/000119312526063975/d105532dex991.htm
12. Dana Incorporated, 2025 Form 10-K (sales, customer concentration 76%), SEC filing, 2026. https://www.sec.gov/Archives/edgar/data/26780/000143774926006076/dan20251231_10k.htm
13. BorgWarner Inc., 2025 Form 10-K (OEM contract terms, JIT dependence, customer concentration 71%, competitors, segment margins), SEC filing, 2026. https://www.sec.gov/Archives/edgar/data/908255/000090825526000011/bwa-20251231.htm
14. ZF Friedrichshafen AG, Company Profile (Zeppelin Foundation 93.8% ownership), 2026. https://www.zf.com/mobile/de/company/company.html
15. Allison Transmission Holdings, Inc., 2025 Form 10-K (contract structure, distributor network, cost breakdown, UAW representation), SEC filing, 2026. https://www.sec.gov/Archives/edgar/data/1411207/000119312526065627/alsn-20251231.htm
16. GMInsights / Market Research Future, "Automotive & Electric Vehicle Transmission Market" (single-speed EV gearboxes; 2-speed EV transmissions; ZF/Aisin EV drive contracts), 2024–2025. https://www.gminsights.com/industry-analysis/automotive-transmission-market
17. U.S. Energy Information Administration, "Electric and hybrid vehicle sales in the United States" (2025 shares: electrified 22%, BEV 7.5%, PHEV 1.6%; federal credits expired Sept 30, 2025), 2025. https://www.eia.gov/todayinenergy/detail.php?id=67144
18. U.S. Energy Information Administration, "U.S. light-duty vehicle sales by powertrain" (Q2 2026: hybrids 16%, BEV 6%, PHEV 1.4%), July 2026. https://www.eia.gov/todayinenergy/index.php/detail.php?id=50627
19. U.S. Environmental Protection Agency, "Final Rule: Rescission of Greenhouse Gas Endangerment Finding and Highway-Vehicle GHG Standards," February 2026. https://www.epa.gov/regulations-emissions-vehicles-and-engines/final-rule-rescission-greenhouse-gas-endangerment
20. The White House, "Fact Sheet: President Donald J. Trump Adjusts Imports of Automobiles and Automobile Parts into the United States" (Section 232 25% tariffs; parts effective May 3, 2025; USMCA content relief), March 2025. https://www.whitehouse.gov/fact-sheets/2025/03/fact-sheet-president-donald-j-trump-adjusts-imports-of-automobiles-and-automobile-parts-into-the-united-states/
21. Greenberg Traurig LLP, "25% Tariff on Automobiles and Automobile Parts Begins April 3; USMCA Vehicles May Qualify for Partial Relief," 2025. https://www.gtlaw.com/en/insights/2025/4/25-tariff-on-automobiles-and-automobile-parts-begins-april-3-usmca-vehicles-may-qualify-for-partial-relief
22. American Axle & Manufacturing, "Creating a Leading Global Driveline and Metal Forming Supplier" — AAM/Dowlais combination investor presentation (~$12 billion combined revenue; ~$300 million synergies), 2025. https://www.aam.com/docs/default-source/transaction/rule-2-7-announcement/investor-presentation.pdf
23. FleetOwner, "Commercial powertrain transformation: Allison acquires Dana's off-highway division for $2.7B," 2025. https://www.fleetowner.com/equipment/article/55296945/
24. WardsAuto, "Allison Transmission acquires Dana Inc.'s off-highway unit for $2.7B," 2025. https://www.wardsauto.com/news/archive-auto-allison-transmission-dana-offhighway-acquisition/750586/
25. ZF Friedrichshafen AG, 2025 Annual Report (€2.1 billion loss, e-mobility impairment charge), 2026. https://www.zf.com/mobile/en/company/annual_report/annual_report.html
26. U.S. Bureau of Labor Statistics, "Injury and Illness Rates by Industry," NAICS 33635 (2.4 cases per 100 FTE; 1.6 DART rate), 2024. https://www.bls.gov/web/osh/table-1-industry-rates-national.htm