PUBLISHER: The Business Research Company | PRODUCT CODE: 1816473
PUBLISHER: The Business Research Company | PRODUCT CODE: 1816473
Automotive engineering services encompass design services aimed at optimizing the manufacturing process to enhance the overall operational efficiency of vehicles. These services focus on incorporating advanced and innovative features related to comfort, infotainment, and safety through the integration of cutting-edge electronics into vehicles.
The primary vehicle types addressed by automotive engineering services include both passenger cars and commercial vehicles. Passenger cars, designed for transporting passengers, typically have fewer than eight seats, excluding the driver's seat. Various automotive engineering service types are involved, covering aspects such as concept/research, design, prototyping, system integration, and testing. These services can be provided on-shore and off-shore, spanning diverse applications like electrical and electronics, body controls, advanced driver-assistance systems (ADAS) and safety, chassis, connectivity services, powertrain and exhaust, interior and exterior, body engineering, and simulation.
Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.
The sharp rise in U.S. tariffs and the resulting trade tensions in spring 2025 are having a notable impact on the services sector, particularly in business services, IT, and professional consulting. The increased costs of imported technology, office equipment, and critical digital infrastructure are driving up operating expenses for service providers, compelling them to either pass these costs on to clients or absorb the financial strain themselves. Outsourcing firms and IT service providers are grappling with higher hardware costs and supply chain delays, which are disrupting project timelines and squeezing profitability. Furthermore, retaliatory tariffs have weakened demand for U.S.-based professional services in key global markets, slowing export-driven revenues. To navigate these challenges, the sector must focus on accelerating digital transformation, optimizing costs, and strengthening domestic client relationships to sustain growth and remain competitive in an increasingly uncertain trade environment.
The automotive engineering services market research report is one of a series of new reports from The Business Research Company that provides automotive engineering services market statistics, including automotive engineering services industry global market size, regional shares, competitors with an automotive engineering services market share, detailed automotive engineering services market segments, market trends and opportunities, and any further data you may need to thrive in the automotive engineering services industry. This automotive engineering services market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future state of the industry.
The automotive engineering services market size has grown rapidly in recent years. It will grow from $266.62 billion in 2024 to $295.47 billion in 2025 at a compound annual growth rate (CAGR) of 10.8%. The growth in the historic period can be attributed to globalization of automotive industry, increased complexity of vehicle systems, emphasis on fuel efficiency and emissions reduction, growth in automotive electronics and software, demand for innovative vehicle designs and features.
The automotive engineering services market size is expected to see rapid growth in the next few years. It will grow to $441.98 billion in 2029 at a compound annual growth rate (CAGR) of 10.6%. The growth in the forecast period can be attributed to rise of electric and autonomous vehicles, accelerated adoption of connected car technologies, increasing focus on sustainability and green engineering, integration of advanced driver-assistance systems (ADAS), demand for personalized and user-centric automotive experiences. Major trends in the forecast period include use of advanced technology, embrace of digital twin technology for simulation and testing, collaboration for research and development in autonomous driving, growing importance of cybersecurity in automotive engineering, use of artificial intelligence in design optimization and manufacturing.
The forecast of 10.6% growth over the next five years reflects a slight reduction of 0.1% from the previous projection. This reduction is primarily due to the impact of tariffs between the US and other countries. The U.S. may experience elevated outsourcing expenses as tariffs on engineering software suites and digital twin platforms from Germany and India inflate overall development costs. The effect will also be felt more widely due to reciprocal tariffs and the negative effect on the global economy and trade due to increased trade tensions and restrictions.
The growing demand for emission-free transportation is anticipated to drive the expansion of the automotive engineering services market. The use of fossil fuels such as diesel and gasoline releases greenhouse gases like carbon dioxide, methane, hydrofluorocarbons, and nitrous oxide into the atmosphere, leading to climate changes. This has resulted in a heightened demand for emission-free transport options, including electric vehicles. For example, in January 2024, the UK Department for Transport reported that 80% of new cars and 70% of new vans sold in Great Britain will be zero-emission by 2030, rising to 100% by 2035. The growing demand for emission-free transportation, along with increased awareness of these solutions, is expected to boost the automotive engineering services market.
The rising demand for passenger vehicles is a significant factor driving the growth of the automotive engineering services market. Passenger vehicles include various types of motorized transport used for private or public purposes, and the increasing demand for safety features such as airbags, collision avoidance systems, and advanced driver-assistance systems (ADAS) aligns with the growing number of these vehicles on the road. For example, in 2024, the International Organization of Motor Vehicle Manufacturers, a France-based trade association, reported that sales of passenger cars increased to 68.02 million in 2023, up from 61.55 million in 2022. As a result, the growing demand for passenger vehicles directly contributes to the expansion of the automotive engineering services market.
Leading companies in the automotive engineering services market are introducing technologically advanced solutions, such as parking development solutions, to boost efficiency, optimize space usage, and enhance user experience. A parking development solution is an integrated system designed to improve the planning, construction, and management of parking facilities, enhancing space utilization, traffic flow, and convenience in urban or commercial settings. For example, in March 2024, Applied Intuition, a US-based software firm, launched an automated parking development solution for advanced driver-assistance systems (ADAS) and automated driving (AD). This solution enables ADAS and AD development teams to create, test, and deploy machine learning-based or classical automated parking systems (APS) up to 12 times faster with enhanced safety and reliability.
Major companies operating in the automotive engineering services market are developing strategic partnerships. Strategic partnerships refer to a process in which companies leverage each other's strengths and resources to achieve mutual benefits and success. For instance, in October 2022, Tech Mahindra, an Indian-based provider of digital transformation, consulting, and business re-engineering services and solutions, announced that it had partnered with the Foxconn-initiated MIH (Mobility in Harmony) Consortium, an open electric vehicle (EV) alliance initiated by Foxconn, a Taiwan-based electronics manufacturing company. The partnership will focus on developing sustainable mobility solutions and building the next generation of electric vehicles, autonomous driving solutions, and mobility service applications that can deliver value for stakeholders in the mobility industry.
In September 2023, HCL Technologies, an Indian-based multinational IT services and consulting company, acquired ASAP Group for $266. 49 million. Through this acquisition of ASAP and HCL Tech's own presence in the automotive space, the combined business will be a platform for growth in Germany and for further expansion into other key automotive markets in Europe, the Americas, and Japan. ASAP Group is a US-based automotive engineering services provider.
Major companies operating in the automotive engineering services market include Capgemini SE, IAV GmbH, Tech Mahindra Limited, AKKA Technologies Group, Bertrandt AG, Harman International Industries Inc., ALTEN Cresttek Engineering Solutions Pvt Ltd., L&T Technology Services Ltd., Fev Europe GmbH, AVL List GmbH, Ricardo plc, EDAG Engineering GmbH, Valmet Automotive Oyj, Onward Technologies Ltd., T-Net Japan Co. Ltd., Kistler Holding AG, Continental AG, semcon engineering uk limited, Robert Bosch GmbH, Altran India Pvt. Ltd., Tata Technologies Ltd., Altair Engineering Inc., HORIBA Ltd, MBtech Group GmbH, P3 Automotive GmbH, ASAP Holding GmbH, Link Engineering Company, Ansys Inc., EPAM Systems Inc., GlobalLogic, Hunter Engineering Company
Asia-Pacific was the largest region in the automotive engineering services market in 2024. The regions covered in the automotive engineering services market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa
The countries covered in the automotive engineering services market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Italy, Canada, Spain.
The automotive engineering services market consists of revenues earned by entities that are engaged in providing connectivity services, interior, exterior, and body engineering, powertrain and exhaust, simulation, battery development and management. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Automotive Engineering Services Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on automotive engineering services market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for automotive engineering services ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The automotive engineering services market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the technological advancements such as AI and automation, Russia-Ukraine war, trade tariffs (government-imposed import/export duties), elevated inflation and interest rates.