Powder metallurgy (PM) enables production of components with complex geometries such as gears. The cost effective use of PM components in automotive applications has showed a continuous growth. This growth is due to the the net shape capability@ while maintaining performance. Gears for automotive applications are complex in shape and require both geometrical accuracy and high mechanical performance in terms of tooth durability. By utilizing selective densification of the teeth@ these performance requirements can be met at a low cost. In this paper a PM process consisting of compaction@ sintering@ surface densification@ and finally heat treatment has been studied to assess the feasibility of production. Helical and spur gears were used where the densification@ as well as the resulting gear quality and durability@ were tested.