PUBLISHER: The Business Research Company | PRODUCT CODE: 1931870
PUBLISHER: The Business Research Company | PRODUCT CODE: 1931870
Automotive contract manufacturing is a business model in which a company outsources the production of vehicles or automotive components to a specialized manufacturer. It enables automakers to utilize external expertise, advanced technologies, and scalable production capabilities without maintaining complete in-house facilities. This approach enhances efficiency, reduces costs, and accelerates the delivery of high-quality automotive products to the market.
The primary types of automotive contract manufacturing services are complete vehicle manufacturing, component or module manufacturing, and design and engineering services. Complete vehicle manufacturing refers to producing fully assembled vehicles, integrating all components, modules, and systems into a finished product. Various contract types include build-to-print (BTP), build-to-specification (BTS), and joint development manufacturing (JDM), and they are applied for two-wheelers, passenger cars, commercial vehicles, and construction and agricultural vehicles. It serves various end uses, including original equipment manufacturers (OEM) and aftermarket.
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.
Tariffs are significantly impacting the automotive contract manufacturing market by increasing costs for imported automotive components, advanced tooling, robotics systems, battery modules, and electronic assemblies used in outsourced production. Passenger car and electric vehicle programs are most affected, particularly in North America and Europe, where contract manufacturers rely heavily on cross-border supply chains from Asia-Pacific. These tariffs are raising per-unit manufacturing costs, compressing margins, and influencing OEM sourcing strategies. However, they are also accelerating localization of production, encouraging regional manufacturing hubs, and strengthening long-term partnerships between OEMs and domestic contract manufacturers.
The automotive contract manufacturing market research report is one of a series of new reports from The Business Research Company that provides automotive contract manufacturing market statistics, including automotive contract manufacturing industry global market size, regional shares, competitors with a automotive contract manufacturing market share, detailed automotive contract manufacturing market segments, market trends and opportunities, and any further data you may need to thrive in the automotive contract manufacturing industry. This automotive contract manufacturing market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.
The automotive contract manufacturing market size has grown strongly in recent years. It will grow from $43.96 billion in 2025 to $47.38 billion in 2026 at a compound annual growth rate (CAGR) of 7.8%. The growth in the historic period can be attributed to shift toward asset-light automotive business models, expansion of global OEM production networks, cost optimization pressures on automakers, availability of specialized contract manufacturers, increasing vehicle platform standardization.
The automotive contract manufacturing market size is expected to see strong growth in the next few years. It will grow to $63.25 billion in 2030 at a compound annual growth rate (CAGR) of 7.5%. The growth in the forecast period can be attributed to rising demand for electric and autonomous vehicles, expansion of contract manufacturing for niche vehicle segments, increasing use of digital manufacturing technologies, growing focus on speed-to-market, rising collaborations between OEMs and contract manufacturers. Major trends in the forecast period include increasing outsourcing of ev and module manufacturing, rising adoption of flexible contract manufacturing models, expansion of joint development manufacturing agreements, growing demand for scalable vehicle production capacity, integration of advanced automation in contract plants.
The increasing demand for electric vehicles is expected to propel the growth of the automotive contract manufacturing market going forward. Electric vehicles are zero-emission vehicles that reduce reliance on fossil fuels, lower operating costs, and require less maintenance compared to conventional vehicles. The demand for electric vehicles is rising as consumers and businesses increasingly prefer environmentally friendly transportation solutions and seek long-term cost savings. Automotive contract manufacturing supports EVs by enabling manufacturers to expand production rapidly without significant investments in new facilities, reducing costs and accelerating time-to-market. For instance, in December 2023, according to the European Environment Agency, a Europe-based government organization, the share of electric vehicles in new registrations rose to 22.7% for cars and 7.7% for vans, up from 19% for cars and 6% for vans in 2022. Therefore, the increasing demand for electric vehicles is driving the growth of the automotive contract manufacturing market.
Major companies operating in the automotive contract manufacturing market are focusing on leveraging semi-knock-down (SKD) assembly to enhance production flexibility and localization of EV manufacturing. Semi-knock-down (SKD) assembly involves importing partially assembled vehicle kits that are completed at local facilities, helping manufacturers reduce logistics costs, comply with regional regulations, and accelerate market entry. For instance, in September 2025, Magna International, an Austria-based automotive contract manufacturer, commenced contract assembly of XPENG's G6 and G9 electric SUVs at its Graz facility. The production uses SKD kits shipped from China, enabling XPENG to optimize costs, shorten lead times, and comply with EU regulatory and tariff standards. The Graz facility's advanced manufacturing capabilities, flexible production lines, and high-quality standards make it a strategic location for scaling XPENG's EV operations in Europe.
In January 2025, American Axle & Manufacturing (AAM), a US-based provider of automotive driveline and drivetrain components, acquired Dowlais Group plc for $1.44 billion. Through this acquisition, American Axle & Manufacturing (AAM) aims to expand its powertrain-agnostic product portfolio, integrate advanced additive manufacturing and metal-forming capabilities, and strengthen its position in the evolving global automotive market. Dowlais Group plc is a UK-based automotive contract manufacturing service.
Major companies operating in the automotive contract manufacturing market are Magna International Inc., Valmet Automotive Group, VDL Groep, Foxconn Technology Group, AM General LLC, IWN GmbH & Co. KG, Steyr Automotive GmbH, Karmann GmbH, Heuliez Group, Nedcar B.V., Pininfarina S.p.A., Cecomp S.p.A., Multimatic Inc., Bollinger Motors Manufacturing Services, SVI Public Company Limited, Blue Solutions Manufacturing, Arrival Automotive UK Ltd, Rimac Technology, Hofer Automotive GmbH, ATP Automotive Engineering, Thaco Group
Asia-Pacific was the largest and fastest-growing region in the automotive contract manufacturing market in 2025. The regions covered in the automotive contract manufacturing market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa
The countries covered in the automotive contract manufacturing market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The automotive contract manufacturing market includes revenues earned by entities by providing services such as prototype development, plastic injection molding, powertrain assembly, quality testing, and fabrication. 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 Contract Manufacturing Market Global Report 2026 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses automotive contract manufacturing 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 contract manufacturing ? 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 contract manufacturing 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, total addressable market (TAM), market attractiveness score (MAS), competitive landscape, market shares, company scoring matrix, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
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