Automotive Engineering Service Provider Market Report 2024

The automotive engineering service provider market size has grown strongly in recent years. It will grow from $149.96 billion in 2023 to $162.22 billion in 2024 at a compound annual growth rate (CAGR) of 8.2%. The growth in the historic period can be attributed to several factors, including the expansion of automotive markets, globalization of industries, changing consumer preferences towards sustainability, the growth of urban areas, and an increasing emphasis on vehicle safety features.

The automotive engineering service provider market size is expected to see strong growth in the next few years. It will grow to $222.86 billion in 2028 at a compound annual growth rate (CAGR) of 8.3%. The growth in the forecast period can be attributed to stricter emission norms and safety regulations, a focus on efficiency and lean manufacturing practices, the adoption of Industry 4 principles, increasing awareness of environmental impact, and the rise of electric vehicles. Major trends in this period include technological advancements, integration of digital technologies such as IoT and AI, development of lightweight materials, advancements in self-driving cars, and the increasing adoption of 3D printing.

The increasing demand for advanced driver assistance systems (ADAS) is expected to fuel growth in the automotive engineering service provider market. ADAS technologies utilize automated systems such as sensors and cameras to assist drivers in operating vehicles safely, detecting obstacles and errors, and responding accordingly. This demand is driven by regulatory requirements for enhanced safety features, consumer interest in accident-prevention technologies, and the potential of ADAS to facilitate autonomous driving capabilities. Automotive engineering service providers play a crucial role in developing ADAS by offering specialized expertise and technological solutions to enhance vehicle safety and automation. For example, by 2026, rear cameras and rear parking sensors are projected to be installed on 71% and 60% of registered vehicles, respectively, according to the Highway Loss Data Institute. Most safety features are expected to see significant adoption increases, with front automatic emergency braking (AEB) forecasted to rise from 18% in 2021 to 43% in 2026, driven in part by voluntary agreements to equip vehicles with AEB by 2022. Thus, the growing demand for ADAS is propelling growth in the automotive engineering service provider market.

Major companies in the automotive engineering service provider market are concentrating on advancing connected service technology to better serve their customers. Connected service technology enables vehicles to connect to the internet and cloud-based services, facilitating remote monitoring, control, and access to vehicle data and functions via mobile apps and digital platforms. For instance, in June 2024, Tata Elxsi partnered with Red Hat, Inc. to expedite application mobility in a multi-cloud network for 5G-connected vehicles. This collaboration aims to accelerate 5G connected vehicle applications using Tata Elxsi's Connected Vehicle Platform (CVP) named TETHER and Red Hat In-Vehicle OS. By leveraging Red Hat OpenShift as a unified container-as-a-service (CaaS) layer across multi-cloud environments and Tata Elxsi's Neuron platform for cloud automation and 5G application modernization, the partnership seeks to enable telecom operators and mobile virtual network operators (MVNOs) to monetize their networks effectively.

In July 2023, HCL Technologies Limited acquired ASAP Group for $271.1 million as part of its strategic expansion in the automotive engineering services market, particularly in Europe. ASAP Group, based in the UK, specializes in providing automotive engineering services.

Major companies operating in the automotive engineering service provider market are Robert Bosch GmbH, Magna International Inc., Capgemini Technology Services Limited, HCL Technologies Limited, Harman International Industries Inc., Tech Mahindra Limited, Alten Group, Intertek Group plc, AVL LIST GmbH, FEV GmbH, HORIBA Ltd., Bertrandt AG, ARRK Product Development Group, EDAG Engineering GmbH, IAV GmBH, Altair Engineering Inc., Ricardo Plc, Semcon, Continental Engineering Services Ltd., P3 Automotive GmbH, Link Engineering Company, Kistler Holding AG, Magneti Marelli S.p.A.

North America was the largest region in the automotive engineering service provider market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the automotive engineering service provider market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the automotive engineering service provider market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Automotive engineering service providers are companies that offer comprehensive services across powertrain development, vehicle safety, emissions testing, and more to support original equipment manufacturers (OEMs) and component manufacturers in conceptualizing, designing, and producing advanced vehicles. These service providers play a crucial role in driving innovation, optimizing costs, and ensuring regulatory compliance within the automotive industry.

The main service types offered by automotive engineering service providers include engine development, chassis design, transmission systems, car and body in white (BIW) development, seating systems, cooling and heating systems, ventilation and air conditioning (HVAC), interior and exterior trims, and others. Engines are machines designed to convert various forms of energy into mechanical energy. They include modules such as intelligent power modules (IPM) and power integrated modules (PIM). These services cater to a range of vehicle types, including passenger cars, commercial vehicles, and two-wheelers, and cover applications in mechanical, electrical, electronics, software, and safety domains. They are utilized by various end-users such as OEMs and automotive component suppliers.

The automotive engineering service provider market research report is one of a series of new reports that provides automotive engineering service provider market statistics, including automotive engineering service provider industry global market size, regional shares, competitors with a automotive engineering service provider market share, detailed automotive engineering service provider market segments, market trends and opportunities, and any further data you may need to thrive in the automotive engineering service provider industry. This automotive engineering service provider market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The automotive engineering service provider market includes revenues earned by entities by providing services such as manufacturing engineering, autonomous driving technology, vehicle safety engineering, and emissions testing and compliance. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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