Transmission type refers to the method by which power is transferred from the engine to the wheels of a vehicle. The two main types are manual transmission and automatic transmission. In a manual transmission, the driver must manually shift gears using a clutch pedal and gear stick, providing more control over the vehicle's performance. In contrast, an automatic transmission shifts gears automatically based on speed and engine load, making it easier for the driver, especially in stop-and-go traffic. There are also variations like CVT (continuously variable transmission) and dual-clutch transmission, which offer different driving experiences and efficiencies.