Chicago, May 25, 2022 (GLOBE NEWSWIRE) -- Automotive Engineering Services Market is projected to grow at a CAGR of 8.8% from USD 153.3 billion in 2021 to USD 253.9 billion by 2027.
Factors such as the advent of autonomous vehicles, the introduction of 5G network in the automotive industry, OEM and government focus on electric vehicles, use of advanced technology, concerns of vehicle and passenger safety, and vehicle light weighting are driving the automotive engineering services market.
Automotive engineering services deal with the design and development of automotive components and related technologies to address complex technical challenges in the vehicle development value chain. The engineering service process starts with conceptualization, designing, prototyping, system integration, and testing. Automotive engineering services include vehicle connectivity services, ADAS (advanced driver-assistance systems) and safety systems, interior & exterior design and body engineering services, passenger comfort, and others. These services assess different areas in a vehicle and provide data to check on a vehicle’s development and validation.
The automotive engineering services market is dominated by global players such as Capgemini (France), IAV Automotive Engineering (Germany), Tech Mahindra (India), AKKA Technologies (Belgium), and Bertrandt AG (Germany).
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In-house engineering services are expected to lead the automotive engineering services market during the forecast period
The in-house engineering services are expected to be the largest market. Major OEMs keep complicated automotive engineering services such as engine design, powertrain design, and transmission systems for in-house development. These designs and optimizations vary from one OEM to another and, thus, require different techniques and specialization that can be done in-house for better results. Also, the growing focus on zero-emission vehicles has compelled OEMs to redesign their existing engines to comply with the latest emission standards. The designing of electric vehicles would enhance the demand for in-house investments by OEMs.
Electrical, electronics, and body controls is expected to lead the Automotive Engineering Services Market
Automotive electrical, electronics, and body controls have a high value-added proportion in vehicle development. Electronics and electrical systems play a crucial role in handling all functions dedicated to passenger comfort and convenience. Services in automotive electrical and electronics include power management module, climate control, power window, body control module, and smart mirror and wipers. The trend is expected to grow due to the adoption of electric vehicles and complex electronic components for a safer and functional driving experience. Service providers such as L&T Technology Services and FEV have invested huge resources to develop electrical, electronics, and body control solutions in automotive engineering services.
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Connectivity services segment is expected to be the fastest-growing market during the forecast period
The connectivity services segment is expected to be the fastest-growing market during the forecast period. The expansion of autonomous vehicle testing, advancements in artificial intelligence, and the introduction of 5G connectivity have increased the demand for connected services in automotive engineering services. Connectivity services help in controlling vehicle activities such as smart infotainment, vehicle diagnostics, parking assistance features, diagnostics, and others. OEMs are offering connectivity services in their vehicles. For instance, in July 2018, Audi entered a partnership with Huawei, the largest telecommunications equipment and smartphone maker in China, for introducing connectivity features in upcoming vehicles. The Renault-Nissan-Mitsubishi Alliance plans to launch new vehicles with Alliance Connected Cloud in China by 2022. All these enhancements would accentuate the need for new sensors and use cases of IoT devices in the coming years. Thus, the automotive industry would witness increasing demand for engineering service providers, specialized in connectivity services.
Europe is estimated to be the largest market for automotive engineering services.
It accounts for a share of 43.0% of the global automotive engineering services market in 2021, and the market in this region is projected to register a CAGR of 8.9% during the forecast period.
The presence of OEMs such as VDL Groep (Netherlands) and AB Volvo (Sweden) offers growth opportunities for the automotive engineering services market in the region. European automotive enterprises dominate the global landscape, accounting for almost 50% of the R&D spending led by firms such as BMW, Continental, and Daimler. The increasingly stringent regulations related to environmental issues are encouraging market players to test and develop advanced vehicles, further boosting the market for automotive engineering services. For example, in March 2017, L&T Technology Services unveiled a new delivery center for a German OEM in Munich. The center would cater to engineering and R&D services for the company’s suite of infotainment consoles and its family of hybrid electric vehicles. In October 2018, Siemens Mobility launched a field test for autonomous driving at the Siemens campus in Munich-Perlach, Germany, in partnership with IAV GmbH (IAV Automotive Engineering), Institute for Climate Protection, Energy and Mobility (IKEM), Emm Solutions GmbH, UTB Projektmanagement GmbH, and the Technical University of Munich (TUM). The project was established for testing the interaction between roadside infrastructure, cloud-based software services, and autonomous electric vehicles.
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