Automotive Engineering Services Market Size & Trends 2028

Automotive Engineering Services Market

The global automotive engineering service market is anticipated to grow from USD 153.2 billion in 2022 to USD 243.9 billion by 2028, with a CAGR of 8.1%. The increasing demand for zero-emission vehicles, advancements in technologies like ADAS and connectivity, and the rise of commercial transport are driving the demand for automotive engineering services worldwide.

One of the major factors contributing to the growth is the demand for engineering services related to electric vehicles. The increased popularity of electric passenger cars and commercial vehicles, which offer lower emissions and operating noise compared to internal combustion engine (ICE) vehicles, has led to a higher demand for services such as battery development, charger testing, and motor control. Automotive OEMs often outsource processes like design, prototyping, system integration, and testing to external sources, which helps them integrate product development with related operations and enhance efficiency.

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Prototyping is expected to be the largest service type segment in the automotive engineering services market. Rapid prototyping, enabled by technologies like 3D printing, allows professionals to create functional models of new part designs quickly. This technology has opened doors for the creation of safer, cleaner, and lighter designs, with shorter delivery times and lower costs. Prototyping plays a crucial role in testing new parts and technologies before they are implemented in the assembly line, ensuring safety and efficiency. Many OEMs and service providers have developed innovative prototyping techniques to expedite design and development processes.

In-house engineering services are projected to be the fastest-growing segment during the forecast period. OEMs prefer to keep research and design in-house to maintain control over the vehicle engineering process. In-house services offer advantages such as streamlined communication, improved quality control, faster time to market, adaptability to technology changes, and enhanced customer satisfaction. Long-term partnerships or joint ventures with application software specialists are also established to strengthen in-house capabilities. Asia Pacific is expected to witness significant growth in in-house investments, with major companies focusing on designing their own electric vehicles and customization.

Asia Pacific is predicted to be the fastest-growing market for automotive engineering services. The region benefits from favorable government regulations and a high adoption rate of electric vehicles. Japan is estimated to be the largest market due to its role in advanced electronic technology development, while India is expected to experience the fastest growth with the presence of leading automotive service providers offering various engineering services.

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Key players in the automotive engineering services market include Capgemini, IAV Automotive Engineering, Tech Mahindra, AKKA Technologies, and HCL Technologies, among others. These established players dominate the market and provide a wide range of services to meet the growing demand.

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