Automotive Engineering Services Outsourcing Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The report covers Engineering Services Outsourcing Companies and is segmented by Service Type (Designing, Prototyping, System Integration, and Testing), Location Type (On-shore and Off-shore), Vehicle Type (Passenger Vehicle and Commercial Vehicle), Propulsion Type (IC engine and Electric engine), and Geography (North America, Europe, Asia-Pacific, South America, and Middle-East and Africa). The report offers market size and forecasts for the Automotive Engineering Services Outsourcing Market in value (USD Billion) for all the above segments.

Automotive Engineering Services Outsourcing Market Size

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Automotive Engineering Services Outsourcing Market Summary
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Study Period 2020 - 2029
Base Year For Estimation 2023
CAGR 25.50 %
Fastest Growing Market Asia Pacific
Largest Market Asia-Pacific
Market Concentration Medium

Major Players

Automotive Engineering Services Outsourcing Market Major Players

*Disclaimer: Major Players sorted in no particular order

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Automotive Engineering Services Outsourcing Market Analysis

The Automotive Engineering Services Outsourcing Market was valued at USD 70.7 billion, and it is projected to reach USD 276.3 billion, registering a CAGR of 25.5% in the next five years.

The COVID-19 outbreak has affected many industries across the world. Many countries imposed a complete lockdown for a few months because of the COVID-19 pandemic, which hampered the production of vehicles. Vehicle sales took a hit as manufacturing sites throughout the world were shut down. The impact of the pandemic was moderate on the automotive engineering services market. However, most automakers have resumed vehicle manufacturing with limited capacity and safety measures in place. The market is expected to grow positively during the forecast period as economies are recovering in the post-pandemic period.

Over the long term, engineering firms are rapidly shifting to outsourcing, either to save costs, boost efficiency, or increase competence. Companies outsource engineering services for a variety of reasons, some of the key factors are the need for fast delivery, the need for flexibility, a lack of in-house specialists, and a constrained budget. Additionally, increasing demand for electric vehicles, as well as increasing adoption of electric vehicles, automonous vehicle innovative technologies such as ADAS for vehicle and passenger safety, and lightweight vehicles, are some of the key factors that would positively impact market growth in the coming years.

Considering the growth in electric vehicle sales, several companies from the supply chain are entering into partnership to enhance the design of vehicle components. Various plans and efforts have been launched by governments throughout the world to encourage buyers to prefer electric vehicles over conventional automobiles.

  • One such plan that encourages the purchase of electric vehicles is the California ZEV programme, which intends to have 1.5 million electric vehicles on the road by 2025.
  • In February 2021, AVL and Batemoformed a strategic agreement in the area of virtual battery development. AVL and Batemo'scollaboration seeks to consolidate battery modeling knowledge so that clients may be advised in design, function and system development, battery testing, and fleet operation.

However, the market faces challenges from restraining factors like the high cost of engineering services which may hamper market growth.

Europe region is expected to be the grow with a significant rate in the target market, owing to the presence of OEMs and changing consumer preference toward electric vehicles. Prsence of countries such as Germany, and United Kingdom, among others, are also positively impact the growth to target market owing to their policies and regulations implemented by their governments related to emissions and encourage the usage of green technology. Furthermore, North America is also expected to witness considerable market growth during the forecast period.

Automotive Engineering Services Outsourcing Market Trends

This section covers the major market trends shaping the Automotive Engineering Services Outsourcing Market according to our research experts:

Rapid Development and Implementation of New Technologies and Systems are Expected To Foster the Demand of Target Market

Rapid development and implementation of new technologies and systems are expected to drive the target market growth during the forecast period. Before the implementation of new technologies and systems in the vehicle the company uses prototyping for the replication of final products which allows the company to identify and establish the primary direction of the design while saving time. The proper arrangement of interface components improves usability and makes the resource more appealing to users. In some circumstances, a prototype help can encourage its customers to do specific activities.

Moreover, the automobile sector has taken one step further by strengthening its use of 3D printing technology to create a prototype of a whole car model as well as for specific parts and components. OEMs are using 3D printing technology to swiftly identify defects in prototypes and implement effective actions, resulting in a more cost-effective strategy. For instance,

  • Ford Motor Company pioneer in both bound metal deposition as well as in binder jetting metal 3D printing technologies. They currently deploy the Desktop Metal Studio System to create prototypes, test components, jigs and fixtures, and innovative vehicle designs. They intend to change their global supply chain and generate high-performance components on demand using a binder jet-based metal additive manufacturing technology.
  • Volkswagen is using in-house 3D printing for some years, with around a hundred 3D printers installed in its facilities to date. At Volkswagen, additive manufacturing technology is mostly used for tooling, jigs and fixtures, and prototyping. Almost all of its tooling manufacture is now based on 3D printing, saving the firm hundreds of thousands of dollars each year.

Based on such development, the prototyping segement is expected to grow siginficantly in the target market during the forcast period.

Automotive Engineering Services Outsourcing Market: Battery Electric Vehicle Sales - Volume in Units, by Vehicle type (2021)

Asia-Pacific Expected to Hold Major Share In Automotive Engineering Service Outsourcing Market

Asia-Pacific region is likely to have a large market share in the target market. This is attributed to the presence of significant automobile OEMs as well as the outsourcing of production and associated operations to countries such as India, South Korea, and China due to the availability of low-cost labor. As a result, automotive ESO providers have focused their efforts on the sector and transferring their operations to the Asia-Pacific region.

India accounts for roughly 30% of all available manpower among low-cost countries. India has a 15-26 percent cost advantage over European, Latin American, and North American countries. India has provided a highly competitive market for global OEMs catering to the needs of various segments around the world. Kia and MG are two new OEMs in the Indian market.

Furthermore, the availability of low-cost educated, and semi-skilled labor in India makes it an attractive option for international OEMs seeking to outsource their operations. Several firms in the country are developing and building equipment for autonomous cars in order to capture a portion of the rapidly rising autonomous vehicle market.

The government has mandated safety features in new vehicles in order to minimise accidents and fatal collisions. For instance,

  • Between 2022 and 2023, the Union Road Transport Ministry of India proposed mandating the inclusion of modern safety technologies such as Electronic Stability Control (ESC) and Autonomous Emergency Braking (AEB) in new automobiles. The authority has also stated that additional safety measures are required for all cars in India and should not be confined to high-end automobiles. Such development required outsourcing service which will positively impact the market growth.
Automotive Engineering Services Outsourcing Market - Growth Rate By Region

Automotive Engineering Services Outsourcing Industry Overview

The automobile sector is witnessing collaborations, acquisitions, and partnerships throughout the globe. To keep up with the growing customer demand for connected vehicles, increased autonomy, and electrifications, OEMs are partnering with industry experts and leaders in IT and battery manufacturing. OEMs are producing white label vehicles for technology companies to install the latest features and technology that will make the vehicle suitable for the present need of customers. For instance,

  • In February 2021, Apollo Future Mobility Group Limited has completed the acquisition of the issued share capital of Ideenion Automobil AG, a German supplier of automotive engineering services outsourcing ("ESO"). The purchase will help the Group's business plan of extending its new energy vehicle ("NEV(s)") solutions and services and positioning itself as a leading full-service provider.
  • In February 2021, AVL entered into a strategic partnership with Batemo in the field of virtual battery development. The partnership between AVL and Batemo aims to consolidate battery modeling competence by which customers can be guided in design, function and system development, battery testing, and fleet operation.

Some major players dominating the market include AVL List GmbH, Bertrandt AG, EDAG Engineering GmbH, IAV GmbH, and Altran.

Automotive Engineering Services Outsourcing Market Leaders

  1. Bertrandt AG

  2. EDAG Engineering GmbH

  3. IAV GmbH

  4. Altran

  5. AVL List GmbH

*Disclaimer: Major Players sorted in no particular order

Automotive Engineering Services Outsourcing Market Concentration
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Automotive Engineering Services Outsourcing Market News

  • In June 2022, Altair Engineering Inc. acquired Concept Engineering, which provides advanced visualization of electrical circuits, wire harnesses, and components for rapid and reliable development, manufacture, and service for industries demanding highly specialized debugging and visualization mechanisms for development and post-production product maintenance. Among these industries are automotive, aerospace, and others.
  • In June 2021, IAV and the Massachusetts Institute of Technology (MIT) launched a joint research project for alternative propulsion systems, for which they are comparing and evaluating innovative drive types based on hydrogen, electrification, hybridization, and methane combustion in heavy-duty trucks.

Automotive Engineering Services Outsourcing Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Service Type

      1. 5.1.1 Designing

      2. 5.1.2 Prototyping

      3. 5.1.3 System Integration

      4. 5.1.4 Testing

    2. 5.2 By Location Type

      1. 5.2.1 On-shore

      2. 5.2.2 Off-shore

    3. 5.3 Vehicle Type

      1. 5.3.1 Passenger Vehicles

      2. 5.3.2 Commercial Vehicles

    4. 5.4 Propulsion Type

      1. 5.4.1 IC Engine

      2. 5.4.2 Electric Engine

    5. 5.5 Geography

      1. 5.5.1 North America

        1. 5.5.1.1 United States

        2. 5.5.1.2 Canada

        3. 5.5.1.3 Rest of North America

      2. 5.5.2 Europe

        1. 5.5.2.1 Germany

        2. 5.5.2.2 United Kingdom

        3. 5.5.2.3 France

        4. 5.5.2.4 Italy

        5. 5.5.2.5 Spain

        6. 5.5.2.6 Rest of Europe

      3. 5.5.3 Asia-Pacific

        1. 5.5.3.1 China

        2. 5.5.3.2 Japan

        3. 5.5.3.3 India

        4. 5.5.3.4 South Korea

        5. 5.5.3.5 Rest of Asia-Pacific

      4. 5.5.4 South America

        1. 5.5.4.1 Brazil

        2. 5.5.4.2 Argentina

        3. 5.5.4.3 Rest of South America

      5. 5.5.5 Middle-East and Africa

        1. 5.5.5.1 United Arab Emirates

        2. 5.5.5.2 Saudi Arabia

        3. 5.5.5.3 South Africa

        4. 5.5.5.4 Rest of Middle-East and Africa

  6. 6. COMPETITIVE LANDSCAPE*

    1. 6.1 Company Profiles

      1. 6.1.1 AVL List GmbH

      2. 6.1.2 Bertrandt AG

      3. 6.1.3 EDAG Engineering GmbH

      4. 6.1.4 IAV GmbH

      5. 6.1.5 HORIBA Ltd

      6. 6.1.6 Altran (Capgemini Engineering)

      7. 6.1.7 FEV Group GmbH

      8. 6.1.8 MBtech Group GmbH (A subsidiary of AKKA Technologies)

      9. 6.1.9 Alten GmbH

      10. 6.1.10 P3 Automotive GmbH

      11. 6.1.11 Altair Engineering Inc.

      12. 6.1.12 ITK Engineering GmbH (Robert Bosch GmbH)

      13. 6.1.13 ESG Elektroniksystem- und Logistik-GmbH

      14. 6.1.14 RLE International Group

      15. 6.1.15 ASAP Holding GmbH

      16. 6.1.16 Kistler Holding AG

    2. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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Automotive Engineering Services Outsourcing Industry Segmentation

Engineering services outsourcing refers to the use of the technology and services connected to the company's core engineering process, such as auto design, computer-aided manufacturing, and design, to produce new-age engineering products at a low cost and with a competitive advantage.

The Automotive Engineering Services Outsourcing Market has been segmented by Service Type (Designing, Prototyping, System Integration, and Testing), Location Type (On-shore and Off-shore), Vehicle Type (Passenger Vehicle and Commercial Vehicle), Propulsion Type (IC engine and Electric engine), and Geography (North America, Europe, Asia-Pacific, South America, and Middle-East and Africa).

By Service Type
Designing
Prototyping
System Integration
Testing
By Location Type
On-shore
Off-shore
Vehicle Type
Passenger Vehicles
Commercial Vehicles
Propulsion Type
IC Engine
Electric Engine
Geography
North America
United States
Canada
Rest of North America
Europe
Germany
United Kingdom
France
Italy
Spain
Rest of Europe
Asia-Pacific
China
Japan
India
South Korea
Rest of Asia-Pacific
South America
Brazil
Argentina
Rest of South America
Middle-East and Africa
United Arab Emirates
Saudi Arabia
South Africa
Rest of Middle-East and Africa
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Automotive Engineering Services Outsourcing Market Research FAQs

The Automotive Engineering Services Outsourcing Market is projected to register a CAGR of 25.5% during the forecast period (2024-2029)

Bertrandt AG, EDAG Engineering GmbH, IAV GmbH, Altran and AVL List GmbH are the major companies operating in the Automotive Engineering Services Outsourcing Market.

Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).

In 2024, the Asia-Pacific accounts for the largest market share in Automotive Engineering Services Outsourcing Market.

The report covers the Automotive Engineering Services Outsourcing Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the Automotive Engineering Services Outsourcing Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

Automotive Engineering Services Outsourcing Industry Report

Statistics for the 2024 Automotive Engineering Services Outsourcing market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Automotive Engineering Services Outsourcing analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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Automotive Engineering Services Outsourcing Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)