Automotive Engineering Service Outsourcing Market Size, Share & Trends Analysis Report By Application, By Service (Designing, Prototyping), By Location (On-shore, Off-shore)- Global Industry Analysis, Share, Growth, Regional Outlook and Forecasts, 2022-2030

The global Automotive Engineering Service Outsourcing market size was valued at US$ 61.79 billion in 2021 and it is projected to be worth around US$ 286.40 billion by 2030, poised to grow at a CAGR 20.11% during the forecast period 2022 to 2030.

Key Takeaways:

  • By Application, the U.S. Automotive Engineering Service Outsourcing market was valued at USD 12.9 Million in 2021 and growing at a CAGR of 11.8% from 2022 to 2030
  • The powertrain and after-treatment segment registered for the largest revenue share of around 31.7% of the automotive ESO market in 2021
  • The infotainment & connectivity segment is estimated to record the fastest growth registering a CAGR of more than 24.6% during the forecast period.
  • The prototyping segment accounted for the largest revenue share of over 31.9% in 2021
  • The testing segment is expected to account for the fastest growth registering a CAGR of around 30.4% during
  • The on-shore segment accounted for the largest revenue share of around 60.2% of the overall market in 2021
  • The Asia Pacific regional market accounted for the largest revenue share of around 42.8% of the automotive ESO market in 2021
  • The South American region is anticipated to account for the fastest growth rate over 25.7% from 2022 to 2030. 

Growth Factors:

Increasing collaborative activities between Original Equipment Manufacturers (OEMs) and Engineering Service Providers (ESPs) to achieve promising technologies for performance enhancement, self-driving, and safety assurance adjustments are the factors anticipated to propel the automotive ESO market growth.

Furthermore, the government's introduction of strict emission norms for the effective utilization of fuels is predicted to contribute to the demand for the automotive ESO market. For instance, in January 2021, the U.S. President, Joe Biden, signed an executive order that addressed the climate crisis to protect the environment and public health. The order directed the Environmental Protection Agency (EPA) to propose revising, suspending, or rescinding the earlier set standard under the "The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021–2026 Passenger Cars and Light Trucks".

The automotive ESO market has witnessed technological growth owing to the increasing demand for the shared mobility, electrification, and self-driving. Furthermore, key companies have incorporated cloud technologies into their product offerings to connect & access data and develop more autonomous products. For instance, in May 2018, Horiba, LTD's Smart Emissions Measurement System (SEMS) used the combination of a cloud server and database to obtain emission data, as there was a need to develop solutions for the emission measurement to build a cleaner future.

On the other hand, key participants in the market are impacted by regulations stressing the elimination or limitation of CO2 emissions, enhancing testing procedures, and limiting noise pollution specific to certain regions or countries. For instance, in India, the automobile industry regulations are set by various committees, such as the Central Motor Vehicle Rules-Technical Standing Committee, Standing Committee on Implementation of Emission Legislation (SCOE), and Automotive Industry Standard Committee (AISC).

Report Scope of the Automotive Engineering Service Outsourcing Market

Report Coverage

Details

Market Size

US$ 286.40 Billion by 2030

Growth Rate

CAGR of 20.11% from 2022 to 2030

Largest Market

Asia Pacific

Fastest Growing Market

North America

Base Year

2021

Forecast Period

2022 to 2030

Segments Covered

Application, service, location and Region,

Companies Mentioned

 AKKA; Altair Engineering Inc.; Alten Group; Altran (Capgemini Engineering); ARRK Product Development Group Ltd.; ASAP Holding Gmbh; AVL List GmbH; Bertrandt AG; EDAG Group; ESG Elektroniksystem- und Logistik-GmbH; FEV Group GmbH; Horiba, LTD.; IAV; ITK Engineering GmbH Kistler Group; P3 group GmbH; RLE International Group

 

Application Insights

The powertrain and after-treatment segment registered for the largest revenue share of around 31.7% of the automotive ESO market in 2021. This is attributed to the electrification of powertrains as a replacement for Internal Combustion Engines (ICE) fueled by petroleum and gasoline that can minimize the impact of carbon emissions on the environment.

The significant investments by OEMs in the powertrain technologies are anticipated to positively impact the growth of the powertrain and after-treatment segment. Moreover, the adoption of autonomous driving/ADAS is expected to witness significant growth in the forecast period due to its ability to sense & identify its environment and offer a safe movement. ADAS comprises various sensors, including lidar, GPS, radar, inertial measurement units, and others that provide advanced sensory information and control systems to navigate paths.

The infotainment & connectivity segment is estimated to record the fastest growth registering a CAGR of more than 24.6% during the forecast period. This is attributed to the emerging needs of end-users for the incorporation of advanced digital solutions in vehicles. The connected cars offer movies, social media, music, voice control, and other features that provide suitability and ease to the user, thereby providing prospects to the ESPs.

Furthermore, the body & chassis segment accounted for substantial growth in the revenue share during  2021 due to the rapid production of green vehicles that reduce harmful emissions. The growing focus of end-users on safety and light vehicle structure is expected to drive the demand for chassis in the forecast period.

Service Insights

The prototyping segment accounted for the largest revenue share of over 31.9% in 2021 and is expected to lead the automotive ESO market throughout the forecast period. This is attributed to the increased deployment of 3D printing technology by the automotive industry to design a prototype of an assembly, certain parts, or a model of an entire car. With the 3D printing technology, manufacturers can quickly identify loopholes in the prototype and take corrective measures timely, supporting a cost-efficient approach. Companies are increasingly deploying 3D CAD software to improve communications through documentation, increase the productivity of the design, create a database for manufacturing and improve the quality of design.

The testing segment is expected to account for the fastest growth registering a CAGR of around 30.4% during the eight years as ESPs are investing in the construction of new test centers in an attempt to expand and meet the increasing requirements for automotive testing. For instance, in March 2019, Bertrandt AG expanded its high-voltage test center in Ehningen with an investment of USD 17.0 million to address the growing need for high-voltage test resources.

Moreover, the designing segment is anticipated to register significant growth from 2022 to 2030. This is due to the growing investments by the manufacturers in designing, research & development, and collaborating with the engineering service providers to construct advanced automobile features for the consumers. To balance power-to-weight ratios, manufacturers are emphasizing the production of vehicles with elongated and spacious interiors.

Location Insights

The on-shore segment accounted for the largest revenue share of around 60.2% of the overall market in 2021 and is expected to register the fastest growth in the forecast period. This is attributed to the emerging preferences of OEMs to collaborate with locally available ESPs. This will help in avoiding the risk, as many countries do not follow Intellectual Property protection copyright laws. The challenges faced, such as different time zones, language barriers, imposed laws &  regulations, and others, while dealing with ESPs from a foreign land, restrict OEMs to prefer outsourcing from other countries leading to significant growth in demand for the on-shore segment. Also, the increased adoption of automation technology and self-serve solutions has encouraged automobile OEMs to seek assistance from on-shore engineering service firms.

The off-shore segment is expected to register significant growth in the forecast period. This is attributed to the emerging preferences of OEMs to outsource services from low-cost countries such as India, China, Brazil, Mexico, and Ukraine. With maximum engineering graduates and appropriate skills as compared to all other low-cost countries for ESO, India is majorly preferred by OEMs, driving the growth in this region.

Ukraine, in Eastern Europe, is also emerging as a provider of autonomous services, especially for the American and European-based OEMs. This is owing to the availability of many ESPs or their development centers in Ukraine with low-cost software development.

Regional Insights

The Asia Pacific regional market accounted for the largest revenue share of around 42.8% of the automotive ESO market in 2021 and is expected to continue its dominance in the market during the next eight years. This is attributed to the rapid adoption of electric passenger cars in China. The government norms to minimize or reduce emissions and adopt green technology encourage the segment to grow during the forecast period.

Also, the emergence of ESPs in  Asia Pacific is witnessed due to the availability of an economical and professional workforce. For instance, in May 2019, FEV Group GmbH expanded its operations in India by opening a new mobility center in Pune. The new mobility hub is expected to pave the path for breakthrough technology.

The South American region is anticipated to account for the fastest growth rate over 25.7% from 2022 to 2030. This is owing to the collaboration of OEMs in the region with the government agencies to develop and expand hybrid and electric vehicles due to the emergence of vehicle charging infrastructure. In addition, the rising government initiatives and the increase in budget allocation fuel the region's growth.

The MEA region witnessed a steady growth in 2021 due to automotive manufacturers' preference for outsourcing services to minimize cost and take subassembly and component production to suppliers. This supports the manufacturers in cutting down the number of operations in the entire process.

Key Companies & Market Share Insights

The growing use of sustainable technology solutions has forced key participants to concentrate on business strategies like mergers, partnerships, and acquisitions beneficial for their businesses. The key participants focus on collaboration with OEMs to have a competitive edge over others in the market.

For instance, in April 2020, Altran was acquired by Capgemini to gain a leadership position in R&D digital design, manufacturing services, strategy, product engineering, software development, and integration. The companies also collaborated with OEMs to support advancements in autonomous systems. For instance, in September 2020, Bertrandt collaborated with Bozzio AG, a drive-by-wire system manufacturer, to support the effective development of autonomous systems.

Furthermore, ESPs collaborate with technological institutions to carry out various projects for advancements and innovation in automotive services. For instance, in June 2021, IAV launched a joint research project with the Massachusetts Institute of Technology (MIT) in the U.S. to evaluate and compare innovative drive types based on electrification, hydrogen, methane combustion, and hybridization in heavy-duty trucks.

The international research aims to establish the best driving idea for each application purpose and requirement on American and European roads, reducing CO2 emissions in heavy-duty transportation as much as feasible. In addition, major players are supporting automotive manufacturers in incorporating advanced technologies to contribute to the sustainability of the environment. For instance, in December 2020, Altran, acquired by Capgemini Engineering, partnered with Groupe PSA, an automotive manufacturer, to design and develop Citroen AMI, a 2-passenger electric quadricycle to meet environmental challenges. Some of the prominent key players in the global automotive engineering service outsourcing market include:

  • AKKA
  • Altair Engineering Inc.
  • Alten Group
  • Altran (Capgemini Engineering)
  • ARRK Product Development Group Ltd.
  • ASAP Holding Gmbh
  • AVL List GmbH
  • Bertrandt AG
  • EDAG Group
  • ESG Elektroniksystem- und Logistik-GmbH
  • FEV Group GmbH
  • Horiba, LTD.
  • IAV
  • ITK Engineering GmbH Kistler Group
  • P3 group GmbH
  • RLE INTERNATIONAL Group

Segments Covered in the Report

This research report offers market revenue, sales volume, production assessment and prognoses by classifying it on the basis of various aspects. Further, this research study investigates market size, production, consumption and its development trends at global, regional, and country level for the period of 2017 to 2030 and covers subsequent region in its scope:

  • By Application
    • Autonomous Driving/ADAS
    • Body & Chassis
    • Powertrain and After-treatment
    • Infotainment & Connectivity
    • Others
  • By Service
    • Designing
    • Prototyping
    • System Integration
    • Testing
    • Others
  • By Location
    • On-shore
    • Off-shore

By Geography

North America

  • U.S.
  • Canada

Europe

  • Germany
  • France
  • United Kingdom
  • Rest of Europe

Asia Pacific

  • China
  • Japan
  • India
  • Southeast Asia
  • Rest of Asia Pacific

Latin America

  • Brazil
  • Rest of Latin America

Middle East & Africa (MEA)

  • GCC
  • North Africa
  • South Africa
  • Rest of Middle East & Africa

Key Points Covered in Automotive Engineering Service Outsourcing Market Study:

  • Growth of Automotive Engineering Service Outsourcing in 2022
  • Market Estimates and Forecasts (2017-2030)
  •  Brand Share and Market Share Analysis
  •  Key Drivers and Restraints Shaping Market Growth
  •  Segment-wise, Country-wise, and Region-wise Analysis
  •  Competition Mapping and Benchmarking
  •  Recommendation on Key Winning Strategies
  •  COVID-19 Impact on Demand for Automotive Engineering Service Outsourcing and How to Navigate
  •  Key Product Innovations and Regulatory Climate
  •  Automotive Engineering Service Outsourcing Consumption Analysis
  •  Automotive Engineering Service Outsourcing Production Analysis
  •  Automotive Engineering Service Outsourcing and Management

Chapter 1 Methodology and Scope
                   1.1 Market Segmentation & Scope
                   1.2 Market Definitions
                   1.3 Information Procurement
                       1.3.1 Purchased Database
                       1.3.2 Nova one advisor’sInternal Database
                       1.3.3 Secondary Sources & Third Party Perspective
                       1.3.4 Primary Research
                   1.4 Information Analysis
                       1.4.1 Data Analysis Models
                   1.5 Market Formulation and Data Visualization
                   1.6 Data Validation and Publishing
Chapter 2 Executive Summary
                   2.1 Market Outlook
                   2.2 Segmental Outlook
                   2.3 Competitive Insights
Chapter 3 Market Variables, Trends & Scope
                   3.1 Market Introduction
                   3.2 Outsourcing Classification
                   3.3 Industry Value Chain Analysis
                   3.4 ESO Services Evolution
                   3.5 Changing Role & Participation Of Automotive ESO Providers
                       3.5.1 Autonomous Driving
                       3.5.2 Connected Cars
                       3.5.3 Lightweight Construction
                       3.5.4 Electric Mobility
                   3.6 Market Dynamics
                       3.6.1 Market Driver Analysis
                       3.6.2 Market Restraint/Challenges Analysis
                       3.6.3 Industry Opportunities
                   3.7 Penetration & Growth Prospect Mapping
                   3.8 Business Environment Analysis Tools
                       3.8.1 Porter’s Five Forces Analysis
                       3.8.2 Pest Analysis
Chapter 4 Application Estimates And Trend Analysis
                   4.1 Market Size Estimates & Forecasts And Trend Analysis, 2017 - 2030  
                   4.2 Application Movement Analysis & Market Share, 2021 & 2030
                   4.3 Autonomous Driving/ADAS
                       4.3.1 Market Size Estimates And Forecasts, 2017 - 2030  
                   4.4 Body & Chassis
                       4.4.1 Market Size Estimates And Forecasts, 2017 - 2030  
                   4.5 Powertrain And After-Treatment
                       4.5.1 Market Size Estimates And Forecasts, 2017 - 2030  
                   4.6 Infotainment & Connectivity
                       4.6.1 Market Size Estimates And Forecasts, 2017 - 2030  
                   4.7 Others
                       4.7.1 Market Size Estimates And Forecasts, 2017 - 2030  
Chapter 5 Service Estimates And Trend Analysis
                   5.1 Market Size Estimates & Forecasts And Trend Analysis, 2017 - 2030  
                   5.2 Services Movement Analysis & Market Share, 2021 & 2030
                   5.3 Designing
                       5.3.1 Market Size Estimates And Forecasts, 2017 - 2030  
                   5.4 Prototyping
                       5.4.1 Market Size Estimates And Forecasts, 2017 - 2030  
                   5.5 System Integration
                       5.5.1 Market Size Estimates And Forecasts, 2017 - 2030  
                   5.6 Testing
                       5.6.1 Market Size Estimates And Forecasts, 2017 - 2030  
                   5.7 Others
                       5.7.1 Market Size Estimates And Forecasts, 2017 - 2030  
Chapter 6 Location Estimates And Trend Analysis
                   6.1 Market Size Estimates & Forecasts And Trend Analysis, 2017 - 2030  
                   6.2 Location Movement Analysis & Market Share, 2021 & 2030
                   6.3 On-Shore
                       6.3.1 Market Size Estimates And Forecasts, 2017 - 2030  
                   6.4 Off-Shore
                       6.4.1 Market Size Estimates And Forecasts, 2017 - 2030  
Chapter 7 Regional Estimates & Trend Analysis
                   7.1 ESO Market By Region, 2021 & 2030
                   7.2 Regional Movement Analysis & Market Share, 2021 & 2030
                   7.3 North America
                       7.3.1 North America ESO Market By Application, 2017 - 2030  
                       7.3.2 North America ESO Market By Services, 2017 - 2030  
                       7.3.3 North America ESO Market By Location, 2017 - 2030  
                       7.3.4 U.S.
                           7.3.4.1 U.S. ESO Market By Application, 2017 - 2030  
                           7.3.4.2 U.S. ESO Market By Services, 2017 - 2030  
                           7.3.4.3 U.S. ESO Market By Location, 2017 - 2030  
                       7.3.5 Canada
                           7.3.5.1 Canada ESO Market By Application, 2017 - 2030  
                           7.3.5.2 Canada ESO Market By Services, 2017 - 2030  
                           7.3.5.3 Canada ESO Market By Location, 2017 - 2030  
                       7.3.6 Mexico
                           7.3.6.1 Mexico ESO Market By Application, 2017 - 2030  
                           7.3.6.2 Mexico ESO Market By Services, 2017 - 2030  
                           7.3.6.3 Mexico ESO Market By Location, 2017 - 2030  
                   7.4 Europe
                       7.4.1 Europe ESO Market By Application, 2017 - 2030  
                       7.4.2 Europe ESO Market By Services, 2017 - 2030  
                       7.4.3 Europe ESO Market By Location, 2017 - 2030  
                       7.4.4 Germany
                           7.4.4.1 Germany ESO Market By Application, 2017 - 2030  
                           7.4.4.2 Germany ESO Market By Services, 2017 - 2030  
                           7.4.4.3 Germany ESO Market By Location, 2017 - 2030  
                       7.4.5 France
                           7.4.5.1 France ESO Market By Application, 2017 - 2030  
                           7.4.5.2 France ESO Market By Services, 2017 - 2030  
                           7.4.6.3 France ESO Market By Location, 2017 - 2030  
                       7.4.6 U.K.
                           7.4.6.1 U.K. ESO Market By Application, 2017 - 2030  
                           7.4.6.2 U.K. ESO Market By Services, 2017 - 2030  
                           7.4.6.3 U.K. ESO Market By Location, 2017 - 2030  
                   7.5 Asia Pacific
                       7.5.1 Asia Pacific ESO Market By Application, 2017 - 2030  
                       7.5.2 Asia Pacific ESO Market By Services, 2017 - 2030  
                       7.5.3 Asia Pacific ESO Market By Location, 2017 - 2030  
                       7.5.4 China
                           7.5.4.1 China ESO Market By Application, 2017 - 2030  
                           7.5.4.2 China ESO Market By Services, 2017 - 2030  
                           7.5.4.3 China ESO Market By Location, 2017 - 2030  
                       7.5.5 India
                           7.5.5.1 India ESO Market By Application, 2017 - 2030  
                           7.5.5.2 India ESO Market By Services, 2017 - 2030  
                           7.5.5.3 India ESO Market By Location, 2017 - 2030  
                       7.5.6 Japan
                           7.5.6.1 Japan ESO Market By Application, 2017 - 2030  
                           7.5.6.2 Japan ESO Market By Services, 2017 - 2030  
                           7.5.6.3 Japan ESO Market By Location, 2017 - 2030  
                   7.6 South America
                       7.6.1 South America ESO Market By Application, 2017 - 2030  
                       7.6.2 South America ESO Market By Services, 2017 - 2030  
                       7.6.3 South America ESO Market By Location, 2017 - 2030  
                       7.6.4 Brazil
                           7.6.4.1 Brazil ESO Market By Application, 2017 - 2030  
                           7.6.4.2 Brazil ESO Market By Services, 2017 - 2030  
                           7.6.4.3 Brazil ESO Market By Location, 2017 - 2030  
                   7.7 Middle East & Africa (MEA)
                       7.7.1 MEA ESO Market By Application, 2017 - 2030  
                       7.7.2 MEA ESO Market By Services, 2017 - 2030  
                       7.7.3 MEA ESO Market By Location, 2017 - 2030  
Chapter 8 Competitive Analysis
                   8.1 Key Global Players, Recent Developments & Their Impact On The Industry
                   8.2 Key Company/Competition Categorization (Key Innovators, Market Leaders, Emerging Players)
                   8.3 Key Company Ranking Analysis, 2021
Chapter 9 Competitive Landscape
                   9.1 AKKA
                       9.1.1 Company Overview
                       9.1.2 Financial Performance
                       9.1.3 Service Benchmarking
                       9.1.4 Recent Developments
                   9.2 Altair Engineering Inc.
                       9.2.1 Company Overview
                       9.2.2 Financial Performance
                       9.2.3 Service Benchmarking
                       9.2.4 Recent Developments
                   9.3 Alten Group
                       9.3.1 Company Overview
                       9.3.2 Financial Performance
                       9.3.3 Service Benchmarking
                       9.3.4 Recent Developments
                   9.4 Altran (Capgemini Engineering)
                       9.4.1 Company Overview
                       9.4.2 Service Benchmarking
                       9.4.3 Recent Developments
                   9.5 ARRK Product Development Group Ltd.
                       9.5.1 Company Overview
                       9.5.2 Financial Performance
                       9.5.3 Service Benchmarking
                       9.5.4 Recent Developments
                   9.6 ASAP Holding Gmbh
                       9.6.1 Company Overview
                       9.6.2 Financial Performance
                       9.6.3 Service Benchmarking
                       9.6.4 Recent Developments
                   9.7 AVL List GmbH
                       9.7.1 Company Overview
                       9.7.2 Financial Performance
                       9.7.3 Service Benchmarking
                       9.7.4 Recent Developments
                   9.8 Bertrandt AG
                       9.8.1 Company Overview
                       9.8.2 Financial Performance
                       9.8.3 Service Benchmarking
                       9.8.4 Recent Developments
                   9.9 EDAG Group
                       9.9.1 Company Overview
                       9.9.2 Financial Performance
                       9.9.3 Service Benchmarking
                       9.9.4 Recent Developments
                   9.10 ESG Elektroniksystem- und Logistik-GmbH
                       9.10.1 Company Overview
                       9.10.2 Financial Performance
                       9.10.3 Service Benchmarking
                       9.10.4 Recent Developments
                   9.11 FEV Group GmbH
                       9.11.1 Company Overview
                       9.11.2 Financial Performance
                       9.11.3 Service Benchmarking
                       9.11.4 Recent Developments
                   9.12 Horiba, LTD.
                       9.12.1 Company Overview
                       9.12.2 Financial Performance
                       9.12.3 Service Benchmarking
                       9.12.4 Recent Developments
                   9.13 P3 IAV
                       9.13.1 Company Overview
                       9.13.2 Financial Performance
                       9.13.3 Service Benchmarking
                       9.13.4 Recent Developments
                   9.14 ITK Engineering GmbH Kistler Group
                       9.14.1 Company Overview
                       9.14.2 Financial Performance
                       9.14.3 Service Benchmarking
                       9.14.4 Recent Developments
                   9.15 P3 group GmbH
                       9.15.1 Company Overview
                       9.15.2 Financial Performance
                       9.15.3 Service Benchmarking
                       9.15.4 Recent Developments
                   9.16 RLE INTERNATIONAL Group
                       9.16.1 Company Overview
                       9.16.2 Financial Performance
                       9.16.3 Service Benchmarking
                       9.16.4 Recent Developments

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