Global Automotive Engineering Services Market 2024-2031

Global Automotive Engineering Services Market 2024-2031

Automotive Engineering Services Market Size, Share & Trends Analysis Report by Vehicle Type (Passenger Cars, and Commercial Vehicles), by Service (Concept/Research, Designing, Prototyping, System Integration, and Testing), and by Application (ADAS and Safety, Electrical, Electronics, and Body Controls, Chassis, Connectivity Services, Interior, Exterior, and Body Engineering, Powertrain and Exhaust, Simulation, Battery Development and Management, Charger Testing, Motor Controls, and Others) Forecast Period (2024-2031)

Automotive engineering services market is anticipated to grow at a significant CAGR of 13.7% during the forecast period (2024-2031). The market growth is attributed to pivotal factors such as increasing interest in electric vehicles, increased emphasis on R&D in the automotive industry, and strict government laws designed to reduce vehicle emissions. According to the Alliance for Automotive Innovation (AAI), in November 2022, the combined automotive ecosystem drives more than $1.0 trillion into the US economy each year – 4.9% of GDP. More than $220.0 billion in federal and state revenue is generated annually by the manufacturing, sale, and maintenance of automobiles in the US.

Market Dynamics

Increasing Adoption of Autonomous Vehicles

Autonomous vehicles help execute software and provide transit service without requiring human input. The vehicle is combined with a variety of sensors, actuators, a machine learning system, and sophisticated and potent algorithms. An autonomous car integrates a variety of services, including body electronics, electrical, ADAS, and artificial intelligence-based networking services. Therefore, the market expansion for automotive engineering services is anticipated to be fueled by the development and deployment of autonomous vehicles.

Increasing Demand for Connected Services in Automotive

Customers can use the manufacturer's mobile app to remotely monitor and manage their car owing to connected services included inside automobiles. With the use of a phone, the user may locate their cars with ease. Using connected services technology, the user may also open the doors, check the mileage of the car, and warm up the batteries. Various car manufacturers provide distinct connected services with specialized smartphone apps and features. For instance, Audi offers a smartphone app called My Audi, and a connected service called Audi Connect. Therefore, the growth of the automotive engineering services market is expected to be fueled by the development of linked services by OEM standards.

Market Segmentation

Based on the vehicle type, the market is segmented into passenger cars and commercial vehicles.

Based on the service, the market is segmented into concept/research, designing, prototyping, system integration, and testing.

Based on the application, the market is segmented into ADAS and safety, electrical, electronics, and body controls, chassis, connectivity services, interior, exterior, and body engineering, powertrain and exhaust, simulation, battery development and management, charger testing, motor controls, and others (wheel assembly and autonomous system).

Electrical, Electronics, and Body Controls Segment to Hold a Considerable Market Share

Power management modules, climate controls, power windows, body control modules, smart mirrors and wipers, and power windows are among the services provided by automobile electrical and electronics. The increasing popularity of electric vehicles and sophisticated electronic components that make driving safer and more convenient is predicted to fuel the demand for these services.

Regional Outlook

Global automotive engineering services market is segmented based on geography including North America (the US, and Canada), Europe (the UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America).

Asia-Pacific Holds Major Market Share

Asia-Pacific holds a significant share owing to numerous prominent automotive engineering service providers such as Tech Mahindra, HCL Technologies, Onward Technologies, Automotive Engineering Services (AES), T-Net Japan Co., Ltd., DesignTech Systems., and Horiba, Ltd. in the region. The market growth is attributed to the increased number of engineering R&D centers across the region. In May 2024, Gestamp, the multinational specializing in the design, development, and manufacture of highly engineered metal components for the automotive industry is displaying its products and innovations at the Automotive Engineering Exposition 2024 Yokohama. The company demonstrates its high innovation and engineering capabilities in the automotive market with a new family of products (Gigastamping), accompanying Japanese OEMs in their transition towards a new era of mobility and their path to electrification.

Market Players Outlook

The major companies serving the automotive engineering services market include Alten Group, Capgemini Services SAS, Continental AG, Magna International Inc., and Robert Bosch GmbH among others. The market players are increasingly focusing on business expansion and product development by applying strategies such as collaborations, mergers and acquisitions to stay competitive in the market.