The global automotive engineering services market is expected to reach $18.6 billion by 2027, growing at a CAGR of 6.7% during the forecast period of 2020 to 2027.
The growth in this market is majorly attributed to the factors such as rising sale of electric vehicles, increasing R&D investments in the automotive industry, and strict government policies and regulations for ICE vehicles. Besides, the advent of autonomous vehicles in mainstream automotive market and degrading environmental conditions are further creating tremendous growth opportunities for automotive engineering service providers to capitalize on this highly prospective market.
However, issues associated with intellectual property (IP) constraints and ever dynamic business model is restricting the growth of the automotive engineering services market. Also, the impact of COVID-19 on the global automotive production as well as consumption has stunted the considerable growth rate of the market.
Based on service type, the prototyping services segment is estimated to command the largest share of the overall automotive engineering services market in 2020. However, the automotive designing engineering services segment is expected grow with the fastest growth rate over the forecast period. The rising demand for customized vehicles and increasing efficiency of software tools to design with utmost precision is augmenting the growth of the automotive designing engineering services market. Besides, the growing demand for environment friendly automobiles is also expected to help designing services to grow with rapid pace.
Based on location, the in-house segment is estimated to account for the largest share of the overall automotive engineering services market in 2020. However, the outsourcing segment is anticipated to grow with the fastest CAGR during the forecast period. The constant pressure to quickly design, prototype, manufacture, and launch new products in the marketplace, in response to ever-decreasing product lifecycle and greater demand, is placing a strain on the in-house engineering workforces and processes of companies and hence, the companies are now gradually shifting towards outsourcing of engineering services.
Based on vehicle type, the passenger car segment is estimated to account for the largest share of the overall automotive engineering services market in 2020. However, the commercial vehicle segment is anticipated to grow with the fastest growth rate during the forecast period. Advent of autonomous vehicle along with the need for productivity, energy efficiency, safety, reliability, and reduced carbon footprints provide high growth opportunities for the commercial vehicles segment.
Based on application, the interior, exterior & body engineering segment is estimated to account for the largest share of the overall market in 2020. Rise in customer expenditure on automobiles and growing technological integrations with the vehicles is encouraging various engineering services such as interior, exterior designing, and body engineering. In addition, the growing demand from customers for customized design of interior and exterior of vehicle is anticipated to help interior, exterior & body engineering application segment to maintain its dominance over the coming years.
Geographically, the Asia-Pacific region is estimated to command the largest share of the global automotive engineering services market in 2020, followed by Europe, North America, Latin America, and the Middle East & Africa. The factors such as rising vehicle production, increasing demand for luxury vehicles, growing sales of electric cars, and technological development are driving the automotive engineering services market in the Asia Pacific region. The Asia-Pacific region comprises of rapidly emerging economies such as China and India, along with the developed nations such as Japan and South Korea. These countries are considered as the largest market for automotive manufacturing, and in recent years, the region has also emerged as a hub for automobile production. High automotive demand and production along with the growing concerns about rising CO2 emission and traffic congestions is driving the growth of the automotive engineering services market in the region. However, North America is expected to witness rapid growth during the forecast period.
The key players operating in the global automotive engineering services market are Altran Technologies (France), Akka Technologies (France), Bertrandt AG (Germany), EDAG Engineering GmbH (Germany), IAV GmbH (Germany), HCL Technologies Limited (India), Alten Cresttek (U.S.), L&T Technology Services Limited (India), and FEV Group GmbH (Germany), among others.
-Report by ResearchAndMarkets
