Optimized choice of material for two principally different types of PM components is presented. The first is characterized by high stresses in areas with high stress concentrations (for example synchronizer hubs with very sharp notches, typically <0.25mm in the pre-synchronizer slot and the inner splines). The second type has slightly larger notch radii (small spur gears and sprockets with typically notch radii between 1- 3mm). Diffusion alloyed materials are well suited for sharp notch components. Pre-alloyed materials are also well suited for applications with sharp notches if compressive residual stresses in the notch roots are created by appropriate process control. A free choice of material is available for components with the larger notch radii.