Automotive Engineering Service Outsourcing Market Set to Reach US$ 94.38 Billion in 2023 with 11.2% CAGR

The global automotive engineering services outsourcing market size is set to reach US$ 94.38 billion in 2023. Overall sales of automotive engineering services outsourcing are likely to surge at 11.2% CAGR, taking the forecasted market valuation to US$ 272.84 billion by the end of 2033.

The automotive engineering services outsourcing market is poised for significant growth, driven by the increasing technological skills of Engineering Service Providers (ESPs) to deliver cutting-edge research and development (R&D) and product innovation for vehicle positioning, connected automobiles, and guidance systems. The outsource automotive engineering services market is also expected to benefit from the rising government initiatives to deploy green vehicles for reducing harmful gas discharges, further fueling its growth.

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The automotive ESO industry has come a long way from delivering mechanical services to the integration of advanced technology solutions such as Artificial Intelligence (AI), the Internet of Things (IoT), and others. With the rapid integration of Information Technology (IT) in automobiles, an increase in advanced services was witnessed, accomplishing the commutation objectives and providing comfort, safety, and ease of use to the consumers. The IT-enabled the incorporation of various enhanced features such as Bluetooth and Wireless Local Area Network (WLAN) connectivity, navigation system, app connection, and other car information from sensors.

As customer requirements evolve, companies now emphasize offering mass customization of automobile production engineering services instead of mass production by combining standardization, synchronization, precision, continuity, and interchangeability. This is attributed to the growing inclination of Original Equipment Manufacturers (OEMs) for digitalized solutions, which is expected to offer opportunities for automotive ESO market growth. The Autonomous, Connected, Electric, and Shared vehicles (ACES) disruptions is a digitalized model being adopted by key players in the market to allow advanced mobility standards to enhance consumers’ interaction and experience with vehicles.

Autonomous driving has evolved through the Advanced Driver Assistance Systems (ADAS), including pedestrian detection, collision warning, and others. The connected systems enable processing data in the cloud and at the edge from a growing suite of endpoint sensors to enhance vehicle reliability and passenger safety, boost fleet efficiency, enable maintenance schedules, and offer information to smart city planners and other road users about the travel.

Key Takeaways

• The automotive ESO market is expected to experience significant growth driven by the increasing technological skills of ESPs and rising government initiatives towards green vehicles.
• The integration of advanced technology solutions such as AI, IoT, and others is driving the growth of the outsource automotive engineering services industry, providing comfort, safety, and ease of use to consumers.
• Outsource automotive engineering services providers are shifting from mass production to mass customization of automobile production engineering services.
• OEMs are emphasizing digitalized solutions and adopting models such as Autonomous, Connected, Electric, and Shared (ACES) vehicles to enhance consumer interaction and experience with vehicles.

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Competitive Landscape

The competitive landscape of the automotive engineering services outsourcing market is highly fragmented, with many players operating in the market. The market is characterized by the presence of both multinational corporations and small and medium-sized enterprises (SMEs) offering a wide range of services to automotive Original Equipment Manufacturers (OEMs).

The top players in the market include companies like Capgemini SE, HCL Technologies, and Infosys Limited. These companies offer a broad range of services, including product design and development, testing and validation, and engineering analytics, among others.

There are several other players in the market, including global engineering service providers like Tata Technologies, AKKA Technologies, Alten Group, and others. Regional players such as QuEST Global, Mindtree Limited, and L&T Technology Services also have a significant presence in the market.