Austin, Aug. 05, 2024 (GLOBE NEWSWIRE) -- The Automotive Engineering Service Providers Market Size projected to reach USD 355.82 billion by 2032, with an estimated CAGR of 8.79% from 2024 to 2032.
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KEY PLAYERS:
HARMAN International, Robert Bosch GmbH, Continental AG, EDAG Engineering GmbH, AVL LIST GmbH, Bertrandt, Imaginative Automotive Engineering Services, Magna International Inc, IAV Automotive Engineering, Inc., and Contechs and Other players.
The increase in electrification, autonomous driving, and connected vehicles has led to a complicated engineering environment that requires specific skills.
OEMs and Tier-1 suppliers are more and more delegating engineering tasks to flexible service providers in order to speed up development timelines, cut costs, and tap into specialized expertise. Furthermore, strict emissions regulations and safety standards require thorough testing and validation, leading to an increased need for engineering services.
There is a notable deficiency in specialized offerings for specific automotive markets such as self-driving cars, electric trucks, and small-scale transportation options.
Automotive Engineering Service Provider Market Report Scope & Overview:
Report Attributes | Details |
Market Size in 2023 | USD 166.70 billion |
Market Size in 2032 | USD 355.82 billion |
CAGR (2024-2032) | 8.79% |
Report Scope & Coverage | Market Size, Segments Analysis, Competitive Landscape, Regional Analysis, DROC & SWOT Analysis, Forecast Outlook |
Market Driver |
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Although thriving, the automotive engineering service provider market has an abundance of untapped opportunities.
One critical area is the intersection of the automotive sector with other industries. For instance, utilizing cutting-edge materials, typically first developed in the aerospace or defense industries, has the potential to transform the lightweighting and performance of automobiles. Furthermore, the growing area of artificial intelligence presents significant chances for service providers to create advanced simulation, testing, and optimization tools.
Automotive engineering service providers who can predict and provide customized solutions will establish distinct market positions as regulations change and consumer preferences shift.
The automotive engineering service providers market has different segments to provide to the various industry needs.
Different service types such as design, prototyping, testing, and system integration are aimed at various phases of the automotive development process. In terms of applications, key areas of focus include powertrain engineering, body and chassis design, safety systems, and infotainment technology.
Moreover, the market is divided into different categories based on vehicle type, including passenger cars, commercial vehicles, electric vehicles, and hybrid vehicles, each presenting distinct engineering obstacles and advantages. According to SNS Insider study passenger vehicles held 42% share in 2023 and will be dominating the segment over the forecast period.
Challenges:
The interconnected automotive supply chain on a global scale is at a high risk due to potential disruptions such as political conflicts and natural disasters. The fierce competition for skilled workers, particularly in specific fields like software engineering and battery technology, intensifies operational difficulties even more.
The APAC region is a hub of automotive innovation, driving the need for automotive engineering services provider market.
APAC will be growing at a highest CAGR of 9.04% over the period of 2024-2032, there are several key factors promoting the rapid growth of APAC region. Firstly, local players are focusing more on electric vehicle (EV) technology, autonomous driving, and connected car solutions to meet the specific demands of the region's consumers and regulations.
APAC region's focus on providing cost-efficient engineering solutions has solidified its reputation as a top choice for global automotive companies looking to outsource their operations. Nonetheless, there are still obstacles in talent recruitment and retention, particularly in specialized fields such as software development and simulation.
SNS Insider analysis of major trends and their influence on the automotive engineering service provider market growth.
- The automotive engineering services market is experiencing a fast change due to the combination of electrification, autonomy, connectivity, and shared mobility forces.
- The growing popularity of electric vehicles is leading to a demand for battery management systems, power electronics, and expertise in thermal management. For instance, in the emerging economies the overall adoption rate of EVs has reached beyond 41%.
- SNS Insider study shows a significant increase of 18% in research and development spending from major car manufacturers, especially in Europe and North America, demonstrating a heavy dependence on external engineering assistance.
- Although the market as a whole is anticipated to experience strong growth, certain sectors such as vehicle electrification and autonomous driving are predicted to exceed the industry's average growth rate, possibly expanding by 15-20% in the coming years.
Competitive Landscape:
Key players are strategically placing themselves to take advantage of these trends. Businesses are making significant investments in research and development to enhance simulation and testing capabilities, expediting the progress of electric and autonomous vehicle development.
There is an increasing focus on software-based cars, leading automotive engineering service providers to enhance their knowledge in embedded systems and wireless updates.
Moreover, industry leaders are increasingly looking to enhance their portfolios and grow their global presence through partnerships and acquisitions.
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Key Takeaways:
- There is a significant change happening in the automotive engineering service provider market due to the combination of electrification, autonomous driving, and connectivity.
- Recent developments show an increase in the need for simulation and virtual prototyping services, as OEMs aim to speed up development timelines and cut down on costs associated with physical testing.
- The rising intricacy of contemporary automobiles has resulted in a rising demand for specialized engineering knowledge, especially in fields such as battery management systems, ADAS, and cybersecurity.
- A significant advancement is the formation of strategic alliances between conventional engineering firms and tech companies with the goal of incorporating software-defined vehicle architectures.
- Although there are ongoing difficulties in recruiting and keeping talented engineers with knowledge of new technologies, the general view of the automotive engineering service provider market is positive.
Table of Contents – Major Key Points
1. Introduction
2. Industry Flowchart
3. Research Methodology
4. Market Dynamics
4.1 Drivers
4.2 Restraints
4.3 Opportunities
4.4 Challenges
5. Porter’s 5 Forces Model
6. Pest Analysis
7. Automotive Engineering Service Provider Market Segmentation, By Service Type
- Concept/Research
- Designing
- Prototyping
- System Integration
- Testing
8. Automotive Engineering Service Provider Market Segmentation, By Application
- ADAS and Safety
- Electrical, Electronics, and Body Controls
- Chassis
- Connectivity Services
- Interior, Exterior, and Body Engineering
- Powertrain and Exhaust
- Simulation
- Battery Development & Management
- Charger Testing
- Motor Control
- Others
9. Automotive Engineering Service Provider Market Segmentation, By Location:
- In-house
- Outsource
10. Regional Analysis
11. Company Profiles
12. Competitive Landscape
13. Use Case and Best Practices
14. Conclusion
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