Automotive Engineering Services Outsourcing Market Size to Hit USD 274.7 Bn at a 7.2% CAGR from 2024 to 2034 | Analysis by Transparency Market Research, Inc.
The automotive engineering services outsourcing market is driven by a rising focus on cost reduction and the increased adoption of research and development outsourcing.
Wilmington, Delaware, United States, Transparency Market Research. Inc. , July 10, 2024 (GLOBE NEWSWIRE) -- The global automotive engineering services outsourcing market (자동차 엔지니어링 서비스 아웃소싱 시장) stood at US$ 129 billion in 2023, and the global market is projected to reach US$ 274.7 billion in 2034. The automotive engineering services outsourcing market is anticipated to expand at a CAGR of 7.2% between 2024 and 2034.
The automotive engineering services outsourcing (ESO) market is experiencing substantial growth, driven by the industry's increasing focus on cost reduction and the need for advanced technological solutions. Companies in the automotive sector are leveraging ESO to access specialized expertise, enhance operational efficiency, and accelerate innovation while managing expenses.
One of the primary drivers of this market is the emphasis on cost reduction. Outsourcing engineering services allows automotive companies to lower operational costs, including overheads, labor, and taxes.
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By partnering with external service providers, companies can avoid the high costs associated with maintaining in-house engineering teams and infrastructure. This approach enables them to allocate resources more efficiently and invest in core business areas such as product development and marketing.
The rise in adoption of automotive R&D outsourcing is another significant factor propelling market growth. Automotive companies are increasingly outsourcing research and development activities to external firms with specialized knowledge and advanced technological capabilities. This trend is particularly prevalent in the development of electric vehicles (EVs), autonomous driving technologies, and connected car solutions. By outsourcing R&D, companies can tap into a global pool of talent and accelerate the development and deployment of cutting-edge technologies.
Furthermore, the ESO market is driven by the need for compliance with stringent regulatory standards and the demand for innovative solutions in vehicle safety, performance, and efficiency. External engineering service providers offer expertise in regulatory compliance and access to the latest tools and technologies, ensuring that automotive companies meet industry standards while staying competitive.
The competitive landscape of the automotive ESO market includes a mix of established players and emerging companies. Strategic collaborations, mergers, and acquisitions are common as firms seek to expand their service offerings and geographic reach. Additionally, advancements in digital engineering tools, simulation software, and artificial intelligence are enhancing the capabilities of ESO providers, further driving market growth.
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Key Takeaways of Market Report
- Global automotive engineering services outsourcing market to generate absolute dollar opportunity worth US$ 274.7 billion until 2034.
- Global automotive engineering services outsourcing market is valued at US$ 129 billion in 2023.
- North America is forecasted to hold the largest share in 2023.
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Automotive Engineering Services Outsourcing Market: Growth Drivers Top of Form
- Outsourcing enables automakers to access a global talent pool with specialized skills without the overhead of maintaining a large in-house staff. This approach is especially beneficial for complex projects such as electric vehicles and autonomous driving features, where expertise might be scarce.
- The growing demand for electric vehicles and the increasing use of autonomous vehicles equipped with innovative technologies like Advanced Driver Assistance Systems (ADAS) for vehicle and passenger safety are expected to boost the automotive engineering services outsourcing market revenue. Additionally, the shift towards lightweight vehicles to enhance fuel efficiency and performance further drives the need for specialized engineering services.
Automotive Engineering Services Outsourcing Market: Regional Landscape
- In 2023, North America held the largest share of the automotive engineering services outsourcing market. The region's growth is driven by the incorporation of robotics and automation to enhance engineering operations, improve efficiency, and reduce costs.
- Asia Pacific is expected to hold the second-largest market share during the forecast period. The region's rapid growth is attributed to its emerging automotive markets, increased investment in R&D, and a strong focus on developing electric and autonomous vehicles.Top of Form
Automotive Engineering Services Outsourcing Market: Key Players
- In 2023, ALTEN Group expanded its capabilities in the automotive engineering services outsourcing market (自動車エンジニアリングサービスアウトソーシング市場) by establishing a new dedicated center for electric vehicle (EV) technology development.
- In 2023, Bertrandt AG launched an innovative AI-driven simulation platform to enhance its automotive engineering services. This platform leverages artificial intelligence and machine learning to optimize vehicle design and testing processes, reducing development time and costs.
Automotive Engineering Services Outsourcing Market: Segmentation
By Service Type
- Design and Prototyping Services
- System Integration Services
- Testing and Validation Services
- Manufacturing Support Services
- Others
By Engineering Domain
- Mechanical Engineering
- Electrical/Electronic Engineering
- Software Engineering
- Embedded Systems
- Safety and Compliance Engineering
- Others
By Outsourcing Model
- Onshore Outsourcing
- Offshore Outsourcing
By Application
- ADAS and Safety
- Electrical, Electronics, and Body Controls
- Connectivity Services
- Chassis
- Interior, Exterior, and Body Engineering
- Powertrain and Exhaust
- Simulation
- Battery Management
- Others
By Vehicle Type
- Two/Three Wheelers
- Passenger Cars
- Hatchbacks
- Sedans
- SUVs
- Light Commercial Vehicles
- Heavy Duty Trucks
- Buses and Coaches
- Off-road Vehicles
By Propulsion
- IC Engine
- Electric
By Region
- North America
- Europe
- Asia Pacific
- Middle East & Africa
- Latin America
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