The Global Automotive Engineering Services Market was worth US$ 163.12 billion in 2022 and is anticipated to reach a valuation of US$ 241.89 billion by 2028 and is predicted to register a CAGR of 8.20% during 2023-2028.
Automotive engineering is the activity of planning and constructing automobiles with a mixture of mechanical, electrical, electronic, software, and safety engineering. Automotive technology services are provided for designing and testing brake systems, engines, safety mechanisms, fuel technologies, and transmission, among others.
Factors like the arrival of autonomous vehicles, the introduction of the 5G network within the automotive industry, OEM and government specialization in electric cars, the use of advanced technology, concerns about auto and passenger safety, and vehicle light-weighting is driving the global automotive engineering services market.
Market Drivers:
Rising demand for connectivity offerings in automotive is predicted to propel the expansion of the global automotive engineering services market, The increasing focus of governments and makers on developing lightweight, safe vehicle designs is anticipated to spice up the developments in this market, Growing preference for electric vehicles and their product focus is additionally expected to propel the expansion of the business
Market Restraints:
Concerns regarding the IP (intellectual property) rights for the merchandise and their ownership are factors restricting the expansion of the market, Transformation of business models by the manufacturers designing the merchandise in-house with their designing team is additionally supposed to limit the development of the global automotive engineering services market size
Market Recent Developments:
L&T Technology Services is specified as a Leader in Automotive Engineering Services provider.
Automotive Product Engineering is going through a major ecosystem transformation.
HORIBA MIRA, a world leader in advanced automotive engineering, testing, and development, has made a strong offering in India by introducing its vehicle engineering and consultancy services.
Tech Mahindra Ltd. is a number one provider of digital transformation, consulting, and business reengineering services and solutions. It is recognized as a ‘Leader’ within the Everest Group automotive engineering Services PEAK Matrix® Assessment for the year 2019.
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REPORT METRIC |
DETAILS |
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Market Size Available |
2022 – 2028 |
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Base Year |
2022 |
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Forecast Period |
2023 - 2028 |
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CAGR |
8.20% |
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Segments Covered |
By Service Type, Application, Location, Vehicle Type, and Region. |
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Various Analyses Covered |
Global, Regional & Country Level Analysis, Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview of Investment Opportunities |
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Regions Covered |
North America, Europe, APAC, Latin America, Middle East & Africa |
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Market Leaders Profiled |
FEV (Germany), IAV Automotive Engineering (Germany), Ricardo (UK), AVL (Austria), Alten (France), Bertrandt AG (Germany), Altran (France), L&T Technology Services (India), and Others. |
Market Segmentation:
By application, the connectivity services segment is likely to be the fastest-growing segment throughout the outlook period. The surge in autonomous vehicle testing, improvements in AI, and the introduction of 5G connectivity have increased the demand for connected services in automotive technology services. Connectivity services help in controlling vehicle activities like smart infotainment, vehicle diagnostics, parking assistance features, diagnostics, et al. Original equipment manufacturers are providing connectivity services in their vehicles.
As an example, in July 2018, Audi entered into a partnership with Huawei, the most crucial telecommunications device and smartphone producer in China, for introducing connectivity features in upcoming vehicles. The Renault-Nissan-Mitsubishi Alliance plans to launch new vehicles with Alliance Connected Cloud in China by 2022. these enhancements would accentuate the necessity for brand-spanking new sensors and use cases of IoT devices within the coming years. Thus, the automotive industry would witness an increasing demand for engineering service providers, specializing in connectivity services.
On the idea of vehicle type, the passenger car segment is foreseen to register the fastest growth over the prediction period. The surge in the need for autonomous cars and the climbing concern for environmental conditions like pollution and heating is supposed to further boost the expansion of the segment over the forecast period.
Market Reginal Analysis:
The Global Automotive Engineering Services Market Report includes the segmentation of regions:
The increasing need among consumers for low-emission vehicles has compelled OEMs in Europe to revamp the powertrain and exhaust systems. In addition, the plans to curb 80% of CO2 emissions by 2050 have boosted the demand for EVs within the European region. OEMs decide to launch electric variants of the prevailing gasoline models within the coming years. Thus, the overall demand for engineering services in Europe is probably going to grow. Germany is predicted to be the most important marketplace for automotive engineering services in this area. The nation is home to several car manufacturers and tier-1 companies like Volkswagen, Daimler, Bosch, Continental, et al. Also, the demand for connected cars is about to extend significantly within the premium segment of the nation. The automotive industry recorded almost one-third of the entire R&D investments within the area. The German automakers’ desire to embrace electronic technologies and software solutions is predicted to drive the marketplace for automotive engineering services.
The Asia Pacific is one of the largest markets in the regional wise analysis. The industry is witnessing an outsized number of collaborations and joint ventures between suppliers and vendors of Asia Pacific and major global OEMs. This is often helping OEMs to focus their investments on research and development while saving costs on important auxiliary component manufacturing and installation.
Market Key Players:
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