Global Automotive Engineering Services Market - 2022-2029

Market Overview

The global automotive engineering services market size was worth US$ XX million in 2021 and is estimated to reach US$ XX million by 2029, growing at a CAGR of XX % during the forecast period (2022-2029).

Automotive engineering services are a collection of distinct service offerings used to create an automobile, including mechanical, software, electrical, electronics and safety engineering. The services aim to improve the production process to increase the organization's overall operating cycle without sacrificing vehicle efficacy.

Automotive enhanced service providers (ESPs) produce more adaptable and personalized solutions for OEMs as the business climate changes. As a result, most OEMs are working with automotive ESO providers to design, develop and test new engines, transmissions and designs, propelling the global automotive engineering services market forward.

Market Dynamics

The growing demand for advanced connectivity solutions is expected to drive automotive engineering services. However, intellectual property (IP) constraint is expected to restrain the market.

The growing demand for advanced connectivity solutions is expected to drive the automotive engineering services

Automobile and OEM companies have put significant resources into developing next-generation connected vehicles. Ultrasonic sensors, IoT gadgets and high-definition cameras are standard in upscale sedans and SUVs. The various components combine to form an eco-system that can communicate with the outside world and share data to improve the in-car experience. Further, the information is utilized to assess the vehicle's state and health to plan maintenance, which can help avoid unexpected engine breakdowns.

Connected cars have significant advantages, including the possibility of being safer and less detrimental to the environment. They also provide the automobile industry with a more substantial potential to develop and build stronger customer ties than ever before. The auto industry's future is 5G connectivity, which will alter mobility as we know it.

The fully connected car would rely on three pillars of automotive engineering services: infotainment, telematics and infrastructure. Heads-up displays, audio, in-car entertainment and other forms of infotainment are included. It will link drivers, passengers and vehicles, providing real-time information on its operation. Telematics connects the car to the cloud, allowing data about driver behavior and vehicle functions to be collected and shared. Finally, infrastructure connects the vehicle to its surroundings, detecting people, traffic signals and even communicating with the driver's smart home.

Intellectual property (IP) constraint is expected to restrain the market

Outsourcing is becoming a regular practice among OEMs and automobile businesses. A typical engineering service begins with a research phase and progresses through the design and testing phases before reaching the final manufacturing stage. In some circumstances, the OEM owns the intellectual property of new technologies during the process. However, service providers may cooperate with numerous OEMs for comparable requirements or specifications, restricting existing OEM-patented technology.

As a result, service providers must exercise extreme caution regarding IP breach legislation. Innovation necessitates a significant investment of resources and time in the automotive sector. IP laws prevent service providers from repurposing the same technology, limiting their engineering service technology.

COVID-19 Impact Analysis

COVID-19 had a minor impact on the automotive engineering services market, although more than half of the service providers are located in Europe and Asia-Pacific, which can be linked to the market's service-based approach. Even though many production halts wreaked havoc on the entire automobile industry's supply chain, the impact on automotive service providers was unaffected.

Ricardo, Tech Mahindra, Capgemini and HCL Technologies, among other major automotive engineering service suppliers, saw no significant revenue reduction in 2020. For instance, the COVID-19 pandemic had a minor impact on Tech Mahindra, with revenue falling 6.7% QoQ and 3.2% YoY in Q1 2020-21. The COVID-19 minor impacted the ESI Group, with revenue declining by about 6% in Q1 2020 compared to Q1 2019. Similarly, the pandemic had no significant effect on HCL Technologies' performance.

Segment Analysis

Based on application, the global automotive engineering services market is ADAS and safety, body and chassis electronics, infotainment, telematics and connectivity, advanced driver assistance systems, powertrain, body engineering and others.

Telematics and connectivity is a communication technology service for the automotive industry that relies on data traveling to and from automobiles over wireless networks. The automobile industry is being pushed into the information age by the confluence of wireless communications, location technology and in-vehicle electronics.

According to the United Nations (UN), roughly 1.3 million people die in road traffic accidents each year, another 20-50 million suffering non-fatal injuries. Out of which, road users, such as cyclists and pedestrians, account for more than half of fatalities. Vehicle-to-everything communication allows for a more direct flow of information between automobiles, pedestrians and road infrastructure. As a result, drivers will be informed of adjacent hazards such as broken-down vehicles, potentially reducing the risk of an accident. It has the potential to improve significantly global traffic safety.

5G-enabled smart cars will become the new standard as the need for better connectivity grows. According to industry analysis, 40% of consumers would switch car brands to acquire additional connectivity in their vehicles, with 61% of Chinese drivers agreeing. Drivers in 5G-enabled automobiles may use their favorite entertainment apps, such as music streaming or audiobook services, from the comfort of their car.

Geographical Analysis

The global automotive engineering services market is segmented into North America, Europe, South America, Asia-Pacific and Middle East & Africa based on geography.

Asia-Pacific is a significant market for automotive engineering services due to the extensive use of electric passenger cars, particularly in China. In addition, South Korea, Japan and India are all seeing a surge in demand due to policies and requirements enacted by their respective governments to reduce emissions and encourage the usage of green technology. Japan has the largest market share for automotive engineering services in the Asia Pacific. Many local governments are considering replacing their current public fleets with electric vehicles in the future. The rapid expansion of the logistics industry is also boosting demand for commercial electric cars, driving up demand for automotive engineering services.

Many automotive engineering service providers are contemplating organic and inorganic investments in Asia-Pacific, providing potential for the region's market to flourish. For instance, FEV expanded its presence in India by opening a new mobility center in Pune in May 2019. The new mobility hub will pave the path for breakthrough technology in India. Moreover, in April 2019, Ricardo and Geely Auto Group, one of China's largest automakers, partnered to develop an advanced hybrid transmission specifically for a range-extended plug-in hybrid.

Global Automotive Engineering Services Market Competitive Landscape

The global automotive engineering services market is moderately consolidated and competitive, with increasing demand for electrical vehicles (EVs) and IoT services, resulting in high investment by multinational and local companies. Major players are Bertrandt AG, IAV Automotive Engineering, Tech Mahindra, AKKA Technologies, Capgemini, L&T Technology Services Limited, Alten Cresttek, FEV Group GmbH, Harman International and Altran Technologies, among others. Further, the companies adopt growth strategies such as acquisitions, expansions, product launches and collaborations, contributing to the market growth globally.

Bertrandt AG

Overview: Bertrandt AG is a Germany-based company specializing in engineering consulting services to the automobile industry. It is headquartered in Ehningen, Germany. The company has subsidiaries in France, Germany and United Kingdom.

Product Portfolio: Bertrandt AG provides innovative solutions for the automotive sector, including designing all the automotive elements.

Key Development:

• In September 2020, Bertrandt AG signed an agreement with Bozzio AG, one of the world's leading drive-by-wire system manufacturers. The collaboration will aid in the effective development of autonomous systems. Bertrandt and Bozzio will assist their customers from the initial concept to the final implementation, significantly impacting future vehicle development.

Why Purchase the Report?

• Visualize the composition of the automotive engineering services market segmentation by vehicle type, service type, location, application and region, highlighting the key commercial assets and players.
• Identify commercial opportunities in the automotive engineering services market by analyzing trends and co-development deals.
• Excel data sheet with thousands of automotive engineering services market-level 4/5 segmentation data points.
• PDF report with the most relevant analysis cogently put together after exhaustive qualitative interviews and in-depth market study.
• Product mapping in excel for the key product of all major market players

The global automotive engineering services market report would provide access to an approx. 69 market data table, 68 figures and 198 pages.

Target Audience

• Automotive Businesses
• IT and Services Companies
• Traders, Distributors and Suppliers of Automotive Vehicles
• Investment Banks
• Investment Research Firms