image

Automotive Engineering Service Provider Market Report Scope & Overview:

The Automotive Engineering Service Provider Market size was valued at USD 166.70 billion in 2023 and is expected to reach USD 324.27 billion by 2031 and grow at a CAGR of 8.79% over the forecast period 2024-2031.

  • How the current government initiatives are positively shaping the market course?

The Automotive Engineering Service Provider (ESP) market is undergoing significant transformation driven by several key trends. The rising demand for electric vehicles (EVs) is driving opportunities for ESPs specializing in battery technology, powertrain design, and lightweight material integration. Government initiatives, such as China's substantial investment in EV charging infrastructure and the US's support for domestic battery production, are further accelerating this shift. For instance, U.S. claimed the investments plan of $3.1 Bn for domestic battery production. Global emission regulations are becoming increasingly stringent, creating a growing demand for ESPs proficient in optimizing internal combustion engines (ICE) and developing cleaner technologies like hybrids.

Automotive Engineering Service Provider Market Revenue Analysis

Get more Information on Automotive Engineering Service Provider MarketRequest Sample Report

Moreover, the emergence of the autonomous vehicle (AV) sector is creating a need for ESPs with expertise in sensor fusion, LiDAR integration, and path planning. This presents a lucrative niche for ESPs with these capabilities. To thrive in this evolving landscape, ESPs must continually refine their skill sets and invest significantly in research and development (R&D). Adapting and innovating at the forefront of automotive transformation is crucial for capitalizing on the opportunities presented by this dynamic market.

MARKET DYNAMICS:

KEY DRIVERS:

  • Vehicle electrification and digitization, which are on the rise, are projected to drive the market's growth.

  • Advanced connectivity solutions are in high demand.

  • The pace of automotive innovation is quickening as technology advances.

  • Improving the density of power and minimizing the use of power.

Efficient lightweight material engineering and aerodynamic optimization are becoming increasingly critical in minimizing a vehicle's energy consumption. Government incentives such as India's FAME II scheme, which provides subsidies for electric two-wheelers demonstrating superior energy efficiency, are driving the market towards this direction. By addressing both aspects of the equation, automotive engineering service providers will play a pivotal role in shaping a future where electric vehicles not only boast extended range but also deliver unmatched efficiency.

RESTRAINTS:

  • Standard guidelines for engineering service providers are lacking.

  • The increased level of design complexity has an impact on the final price of the vehicle.

OPPORTUNITIES:

  • Advancements in the field of autonomous and semi-autonomous transportation.

  • There is adequate room for this market to grow as the economy improves.

  • The standardization of safety features could be an excellent potential for this business.

The future prospects of the Automotive Engineering Service Provider (AESP) market are intricately linked with the burgeoning adoption of standardized safety features within the automotive industry. As governments worldwide prioritize road safety, the implementation of regulations mandating advanced safety technologies such as Automatic Emergency Braking (AEB) and Electronic Stability Control (ESC) is becoming increasingly pervasive. Notably, the European Union's General Safety Regulation stands as a testament to this trend, with projections indicating potential savings of over 25,000 lives by 2038.

CHALLENGES:

  • System manufacturers, OEMs, and engineering service providers face major security challenges.

  • IP restrictions prevent service providers from frequently employing technology.

IMPACT OF RUSSIA-UKRAINE WAR:

The ongoing conflict in Ukraine is significantly impacting the Automotive Engineering Service Provider (ESP) market, prompting major automakers to halt production due to disruptions in the supply chain, particularly for critical components such as wiring harnesses commonly sourced from Ukraine. This immediate disruption is anticipated to catalyze a broader, long-term trend toward near-shoring and supplier diversification as automotive companies seek to mitigate geopolitical risks.

In response to these challenges, governments are expected to play a pivotal role in facilitating the reshaping of the industry. For instance, the European Union has unveiled a €2 billion ($2.2 billion) investment plan aimed at strengthening domestic semiconductor production, a key component facing global shortages. Similarly, the Indian government has earmarked ₹76,000 crore ($10 billion) to incentivize investments in the electric vehicle (EV) sector, with the goal of establishing a resilient local EV supply chain.

These governmental initiatives, combined with the automotive industry's own initiatives to bolster self-reliance, are poised to redefine the landscape of ESPs. The market is anticipated to experience heightened demand for service providers proficient in localization strategies, supply chain optimization, and electric vehicle engineering. While the precise magnitude and contours of this transformation remain uncertain, it is evident that the conflict in Ukraine has initiated a fundamental shift in the Automotive ESP market, emphasizing resilience and regionalization as key imperatives.

IMPACT OF ECONOMIC SLOWDOWN:

The Automotive Engineering Service Provider (ESP) market faces challenges amid an economic slowdown, with a projected 15% decline in car sales impacting budgets across the automotive industry. Consequently, engineering projects are being postponed or cancelled, resulting in decreased demand for ESP services. However, there are promising developments amidst these challenges. Governments, recognizing the significance of the automotive sector, are intervening.

Notably, the Chinese government injected $38 billion USD in 2022 to bolster electric vehicle (EV) development, presenting opportunities for ESPs specializing in EV technologies. Furthermore, stringent safety regulations and the advancement of autonomous driving features continue to necessitate engineering expertise, even amidst economic downturns. While short-term prospects may indicate a reduction in demand, ESPs that adeptly adapt to these shifting dynamics can effectively navigate the economic slowdown and emerge resilient.

Market, By Service Type:

The future prospects of the automotive engineering service provider market depend on adopting a segmented strategy that caters to distinct stages of development. The Concept/Research segment, though currently smaller in scale, is anticipated to experience significant expansion with a projected investment surge of 20% by 2025. This growth is driven by heightened innovation priorities among automakers, particularly in areas such as electric vehicles and autonomous driving technologies.

Meanwhile, Design services, which presently command the largest market share at 35%, are forecasted to sustain consistent growth. This is fueled by the ongoing demand for vehicles that are both lightweight and visually appealing. Prototyping services, essential for validating designs, are expected to see a 15% increase in investments, propelled by the increasing accessibility of technologies such as 3D printing and rapid prototyping. System integration, which ensures smooth interaction among components, is anticipated to maintain a stable 20% market share. Similarly, the Testing segment, encompassing virtual simulations and real-world trials, is projected to witness a 10% upsurge, driven by the escalating focus on safety and performance standards. This targeted approach to services will be critical for engineering firms to leverage the evolving automotive landscape and capitalize on emerging opportunities in the market.

Market, By Application:

The path of the Automotive Engineering Service Provider Market relies heavily on the intricate dynamics across various application segments. The foremost contender, Advanced Driver-Assistance Systems (ADAS) and Safety, is poised to dominate, primarily fueled by stringent regulatory measures and the intensifying pursuit of autonomous driving technologies. Industry projections indicate that ADAS & Safety will command a significant share, exceeding 25% of the market by 2031, as per a SNS Insider analysis.

Conversely, the advent of Electric Vehicles (EVs) is reshaping the landscape, propelling segments such as Battery Development & Management and Charger Testing into a notable growth trajectory. These segments are anticipated to collectively amass a considerable share, potentially reaching 15% by 2031. In contrast, traditional segments like Powertrain & Exhaust are expected to witness a decline, while Chassis and Connectivity Services are slated for consistent growth owing to their enduring relevance across diverse vehicle categories. Amidst this evolution, there emerge compelling prospects for engineering service providers adept at adapting their competencies to meet the evolving demands of the automotive industry. Seizing upon these opportunities necessitates agility and innovation, positioning firms to capitalize on the shifting preferences and priorities within the automotive sector.

Market, By Location:

The automotive engineering service provider market is bifurcated into two primary segments based on service location: in-house and outsourced. As of 2023, the in-house segment boasted a commanding market share of approximately 67%. This predominance can be attributed to the clustering of service providers around original equipment manufacturers (OEMs) in developed nations, fostering tight-knit collaboration for design, prototyping, and specialized tasks. Nonetheless, projections suggest a forthcoming power shift in the industry landscape.

The outsourced segment, currently holding a 33% market share, is witnessing rapid expansion propelled by several key factors. The escalating intricacy of vehicles, propelled by advancements in electric, autonomous, and connected car technologies, demands specialized expertise often beyond in-house capabilities. This trend underscores the growing significance of outsourced automotive engineering services in meeting the evolving demands of the market.

Get Customized Report as per your Business Requirement - Ask For Customized Report

MARKET SEGMENTATION:

By Service Type:

  • Concept/Research

  • Designing

  • Prototyping

  • System Integration

  • Testing

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 

By Location:

  • In-house

  • Outsource

REGIONAL ANALYSIS:

The landscape of the Automotive Engineering Service Provider Market is undergoing a significant transformation, marked by the emergence of regional leaders alongside established industry giants. Presently, Europe commands the largest market share at approximately 38%, leveraging its strong automotive manufacturing heritage and emphasis on cutting-edge technologies. However, the Asia Pacific region is poised for remarkable growth, projected to capture a commanding 48% share by 2031. This growth trajectory is driven by factors such as China's swift adoption of electric vehicles and governmental backing for eco-friendly technologies. Despite being a mature market, North America is expected to maintain a steady 20% share, propelled by ongoing advancements in autonomous driving and connected vehicle solutions. This shift towards regional diversification presents lucrative opportunities for service providers. Companies possessing a global footprint and specialized expertise in meeting diverse market demands will be strategically positioned to capitalize on these emerging trends and thrive in the foreseeable future.

REGIONAL COVERAGE:

North America

  • US

  • Canada

  • Mexico

Europe

  • Eastern Europe

    • Poland

    • Romania

    • Hungary

    • Turkey

    • Rest of Eastern Europe

  • Western Europe

    • Germany

    • France

    • UK

    • Italy

    • Spain

    • Netherlands

    • Switzerland

    • Austria

    • Rest of Western Europe

Asia Pacific

  • China

  • India

  • Japan

  • South Korea

  • Vietnam

  • Singapore

  • Australia

  • Rest of Asia Pacific

Middle East & Africa

  • Middle East

    • UAE

    • Egypt

    • Saudi Arabia

    • Qatar

    • Rest of the Middle East

  • Africa

    • Nigeria

    • South Africa

    • Rest of Africa

Latin America

  • Brazil

  • Argentina

  • Colombia

  • Rest of Latin America

 

KEY PLAYERS:

Robert Bosch GmbH (Germany), Continental AG (Germany), HARMAN International (USA), AVL LIST GmbH (Germany), Bertrandt (Germany), EDAG Engineering GmbH (Germany), Imaginative Automotive Engineering Services (India), IAV Automotive Engineering, Inc. (Germany), Magna International Inc (Canada), and Contechs (UK) are some of the affluent competitors with significant market share in the Automotive Engineering Service Provider Market.

Recent Developments:

  1. Bosch Engineering: Bosch Engineering, a subsidiary of Robert Bosch GmbH, has been involved in various automotive engineering projects. They have focused on developing advanced driver assistance systems (ADAS), automotive electronics, and software solutions for vehicle control systems.

  2. Magna International: Magna International is a global automotive supplier known for its expertise in engineering services. They have been active in developing lightweight vehicle structures, electric vehicle components, and advanced manufacturing processes aimed at improving efficiency and sustainability in the automotive industry.

  3. EDAG Engineering: EDAG Engineering is a leading provider of engineering services for the automotive industry. They have worked on innovative vehicle concepts, including electric and autonomous vehicles, and have expertise in vehicle integration, prototyping, and testing.

Bertrandt (Germany)-Company Financial Analysis

Company Landscape Analysis

Automotive Engineering Service Provider Market Report Scope:
Report Attributes Details
Market Size in 2023 US$ 166.70 Billion
Market Size by 2031 US$ 324.27 Billion
CAGR CAGR of 8.79% From 2024 to 2031
Base Year 2023
Forecast Period 2024-2031
Historical Data 2020-2022
Report Scope & Coverage Market Size, Segments Analysis, Competitive  Landscape, Regional Analysis, DROC & SWOT Analysis, Forecast Outlook
Key Segments • by Service Type (Concept/Research, Designing, Prototyping, System Integration, Testing)
• 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)
• by Location (In-house, Outsourced)
Regional Analysis/Coverage North America (US, Canada, Mexico), Europe (Eastern Europe [Poland, Romania, Hungary, Turkey, Rest of Eastern Europe] Western Europe] Germany, France, UK, Italy, Spain, Netherlands, Switzerland, Austria, Rest of Western Europe]), Asia Pacific (China, India, Japan, South Korea, Vietnam, Singapore, Australia, Rest of Asia Pacific), Middle East & Africa (Middle East [UAE, Egypt, Saudi Arabia, Qatar, Rest of Middle East], Africa [Nigeria, South Africa, Rest of Africa], Latin America (Brazil, Argentina, Colombia, Rest of Latin America)
Company Profiles Robert Bosch GmbH (Germany), Continental AG (Germany), HARMAN International (USA), AVL LIST GmbH (Germany), Bertrandt (Germany), EDAG Engineering GmbH (Germany), Imaginative Automotive Engineering Services (India), IAV Automotive Engineering, Inc. (Germany), Magna International Inc (Canada), and Contechs (UK)
Key Drivers •Vehicle electrification and digitization, which are on the rise, are projected to drive the market's growth.

•Advanced connectivity solutions are in high demand.
RESTRAINTS •Standard guidelines for engineering service providers are lacking.

•The increased level of design complexity has an impact on the final price of the vehicle.

Frequently Asked Questions

Ans:- 8.79% is the CAGR of the Automotive Engineering Service Provider Market during the forecast period.

Ans:- Service Type, Application, and Location are the different segments of the market.

Ans:- Standard guidelines for engineering service and increased level of design complexity are the primary market restraints for Automotive Engineering Service Provider Market.

Ans:- Yes.

Ans:- Raw material vendors, Distributors/traders/wholesalers/suppliers, Regulatory authorities, government agencies and NGOs, Commercial research & development (R&D) institutions, Importers and exporters, and  End-use industries are the stakeholder of this report.

TABLE OF CONTENTS

1. Introduction

1.1 Market Definition

1.2 Scope

1.3 Research Assumptions

 

2. Industry Flowchart

 

3. Research Methodology

 

4. Market Dynamics

4.1 Drivers

4.2 Restraints

4.3 Opportunities

4.4 Challenges

5. Impact Analysis

5.1 Impact of Russia-Ukraine Crisis

5.2 Impact of Economic Slowdown on Major Countries

5.2.1 Introduction

5.2.2 United States

5.2.3 Canada

5.2.4 Germany

5.2.5 France

5.2.6 UK

5.2.7 China

5.2.8 Japan

5.2.9 South Korea

5.2.10 India

 

6. Value Chain Analysis

 

7. Porter’s 5 Forces Model

 

8.  Pest Analysis

 

9. Global Automotive Engineering Service Provider Market Segmentation, By Service Type

9.1 Introduction

9.2 Trend Analysis

9.3 Concept/Research

9.4 Designing

9.5 Prototyping

9.6 System Integration

9.7 Testing

 

10. Global Automotive Engineering Service Provider Market Segmentation, By Application

10.1 Introduction

10.2 Trend Analysis

10.3 ADAS and Safety

10.4 Electrical, Electronics, and Body Controls

10.5 Chassis

10.6 Connectivity Services

10.7 Interior, Exterior, and Body Engineering

10.8 Powertrain and Exhaust

10.9 Simulation

10.10 Battery Development & Management

10.11 Charger Testing

10.12 Motor Control

10.13 Others 

 

11. Global Automotive Engineering Service Provider Market Segmentation, By Location

11.1 Introduction

11.2 Trend Analysis

11.3 In-house

11.4 Outsource

 

12. Regional Analysis

12.1 Introduction

12.2 North America

12.2.1 USA

12.2.2 Canada

12.2.3 Mexico

12.3 Europe

12.3.1 Eastern Europe

12.3.1.1 Poland

12.3.1.2 Romania

12.3.1.3 Hungary

12.3.1.4 Turkey

12.3.1.5 Rest of Eastern Europe

12.3.2 Western Europe

12.3.2.1 Germany

12.3.2.2 France

12.3.2.3 UK

12.3.2.4 Italy

12.3.2.5 Spain

12.3.2.6 Netherlands

12.3.2.7 Switzerland

12.3.2.8 Austria

12.3.2.9 Rest of Western Europe

12.4 Asia-Pacific

12.4.1 China

12.4.2 India

12.4.3 Japan

12.4.4 South Korea

12.4.5 Vietnam

12.4.6 Singapore

12.4.7 Australia

12.4.8 Rest of Asia Pacific

12.5 The Middle East & Africa

12.5.1 Middle East

12.5.1.1 UAE

12.5.1.2 Egypt

12.5.1.3 Saudi Arabia

12.5.1.4 Qatar

12.5.1.5 Rest of the Middle East

11.5.2 Africa

12.5.2.1 Nigeria

12.5.2.2 South Africa

12.5.2.3 Rest of Africa

12.6 Latin America

12.6.1 Brazil

12.6.2 Argentina

12.6.3 Colombia

12.6.4 Rest of Latin America

 

13. Company Profiles

13.1 Robert Bosch GmbH (Germany),

13.1.1 Company Overview

13.1.2 Financial

13.1.3 Products/ Services Offered

13.1.4 SWOT Analysis

13.1.5 The SNS View

13.2 Continental AG

13.2.1 Company Overview

13.2.2 Financial

13.2.3 Products/ Services Offered

13.2.4 SWOT Analysis

13.2.5 The SNS View

13.3 HARMAN International (USA)

13.3.1 Company Overview

13.3.2 Financial

13.3.3 Products/ Services Offered

13.3.4 SWOT Analysis

13.3.5 The SNS View

13.4 AVL LIST GmbH (Germany)

13.4.1 Company Overview

13.4.2 Financial

13.4.3 Products/ Services Offered

13.4.4 SWOT Analysis

13.4.5 The SNS View

13.5 Bertrandt (Germany)

13.5.1 Company Overview

13.5.2 Financial

13.5.3 Products/ Services Offered

13.5.4 SWOT Analysis

13.5.5 The SNS View

13.6 EDAG Engineering GmbH (Germany)

13.6.1 Company Overview

13.6.2 Financial

13.6.3 Products/ Services Offered

13.6.4 SWOT Analysis

13.6.5 The SNS View

13.7 Imaginative Automotive Engineering Services (India)

13.7.1 Company Overview

13.7.2 Financial

13.7.3 Products/ Services Offered

13.7.4 SWOT Analysis

13.7.5 The SNS View

13.8 IAV Automotive Engineering, Inc. (Germany)

13.8.1 Company Overview

13.8.2 Financial

13.8.3 Products/ Services Offered

13.8.4 SWOT Analysis

13.8.5 The SNS View

13.9 Magna International Inc (Canada)

13.9.1 Company Overview

13.9.2 Financial

13.9.3 Products/ Services Offered

13.9.4 SWOT Analysis

13.9.5 The SNS View

13.10 Others

13.10.1 Company Overview

13.10.2 Financial

13.10.3 Products/ Services Offered

13.10.4 SWOT Analysis

13.10.5 The SNS View

 

14. Competitive Landscape

14.1 Competitive Benchmarking

14.2 Market Share Analysis

14.3 Recent Developments

            14.3.1 Industry News

            14.3.2 Company News

            14.3.3 Mergers & Acquisitions

 

15. Use Case and Best Practices

 

16. Conclusion

An accurate research report requires proper strategizing as well as implementation. There are multiple factors involved in the completion of good and accurate research report and selecting the best methodology to compete the research is the toughest part. Since the research reports we provide play a crucial role in any company’s decision-making process, therefore we at SNS Insider always believe that we should choose the best method which gives us results closer to reality. This allows us to reach at a stage wherein we can provide our clients best and accurate investment to output ratio.

Each report that we prepare takes a timeframe of 350-400 business hours for production. Starting from the selection of titles through a couple of in-depth brain storming session to the final QC process before uploading our titles on our website we dedicate around 350 working hours. The titles are selected based on their current market cap and the foreseen CAGR and growth.

 

The 5 steps process:

Step 1: Secondary Research:

Secondary Research or Desk Research is as the name suggests is a research process wherein, we collect data through the readily available information. In this process we use various paid and unpaid databases which our team has access to and gather data through the same. This includes examining of listed companies’ annual reports, Journals, SEC filling etc. Apart from this our team has access to various associations across the globe across different industries. Lastly, we have exchange relationships with various university as well as individual libraries.

Secondary Research

Step 2: Primary Research

When we talk about primary research, it is a type of study in which the researchers collect relevant data samples directly, rather than relying on previously collected data.  This type of research is focused on gaining content specific facts that can be sued to solve specific problems. Since the collected data is fresh and first hand therefore it makes the study more accurate and genuine.

We at SNS Insider have divided Primary Research into 2 parts.

Part 1 wherein we interview the KOLs of major players as well as the upcoming ones across various geographic regions. This allows us to have their view over the market scenario and acts as an important tool to come closer to the accurate market numbers. As many as 45 paid and unpaid primary interviews are taken from both the demand and supply side of the industry to make sure we land at an accurate judgement and analysis of the market.

This step involves the triangulation of data wherein our team analyses the interview transcripts, online survey responses and observation of on filed participants. The below mentioned chart should give a better understanding of the part 1 of the primary interview.

Primary Research

Part 2: In this part of primary research the data collected via secondary research and the part 1 of the primary research is validated with the interviews from individual consultants and subject matter experts.

Consultants are those set of people who have at least 12 years of experience and expertise within the industry whereas Subject Matter Experts are those with at least 15 years of experience behind their back within the same space. The data with the help of two main processes i.e., FGDs (Focused Group Discussions) and IDs (Individual Discussions). This gives us a 3rd party nonbiased primary view of the market scenario making it a more dependable one while collation of the data pointers.

Step 3: Data Bank Validation

Once all the information is collected via primary and secondary sources, we run that information for data validation. At our intelligence centre our research heads track a lot of information related to the market which includes the quarterly reports, the daily stock prices, and other relevant information. Our data bank server gets updated every fortnight and that is how the information which we collected using our primary and secondary information is revalidated in real time.

Data Bank Validation

Step 4: QA/QC Process

After all the data collection and validation our team does a final level of quality check and quality assurance to get rid of any unwanted or undesired mistakes. This might include but not limited to getting rid of the any typos, duplication of numbers or missing of any important information. The people involved in this process include technical content writers, research heads and graphics people. Once this process is completed the title gets uploader on our platform for our clients to read it.

Step 5: Final QC/QA Process:

This is the last process and comes when the client has ordered the study. In this process a final QA/QC is done before the study is emailed to the client. Since we believe in giving our clients a good experience of our research studies, therefore, to make sure that we do not lack at our end in any way humanly possible we do a final round of quality check and then dispatch the study to the client.

Start a Conversation

Hi! Click one of our member below to chat on Phone