Dublin, April 28, 2021 (GLOBE NEWSWIRE) -- The "Global Automotive Engineering Services Market by Application (ADAS & Safety, Body Electrical & Electronics, Chassis, Connectivity, Interior/Exterior, Powertrain & Exhaust, Battery, Motor, Charger Test, Simulation), Service, Location, Vehicle, and Region - Forecast to 2027" report has been added to ResearchAndMarkets.com's offering.
The global automotive engineering services market is projected to grow at a CAGR of 8.8% from USD 153.3 billion in 2021 to USD 253.9 billion by 2027.
Factors such as the increasing demand for connected vehicles, increasing EV sales, and adoption of advanced technologies are expected to boost the market. However, high investment risk and increasing competition are the key challenges in the automotive engineering services market.
Increasing concerns over air pollution and global warming have forced the governments of several countries to enforce strict emission policies and regulations for ICE vehicles. Increasing adoption of electric vehicles is expected to change the outlook of the automotive engineering services market. More EV sales would accentuate the need to develop new battery technologies, new chassis and exterior designs, and advanced transmission systems for these vehicles.
EV manufacturers such as Tesla, Nissan, and BAIC outsource the design and development of new technologies and solutions to tier 1 engineering companies. This trend is likely to grow with the rise in EV sales and would drive the automotive engineering services market during the forecast period.
Tesla, Volkswagen, Ford, General Motors, and Google plan to launch fully autonomous vehicles in the coming years. These vehicles would require automotive engineering services, including newly designed chassis systems and body controls, new electronic components, advanced vehicle aerodynamics, and stability solutions.
Major OEMs and e-hailing service providers such as General Motors, Ford, Uber, Lyft, and Waymo have launched robo-taxi trials in the US. Passengers can hail a self-driving cab from a dedicated application. The US became the first country to fully deploy robo-taxis for public transportation. Companies such as Tesla, Volkswagen, Ford, General Motors, and Waymo also plan to launch fully autonomous vehicles in the coming years.
In March 2018, Nissan announced plans to deploy ProPILOT in 20 models by 2022. The increasing focus on autonomous driving systems would require OEMs to incorporate more cruise control features and advanced safety systems for semi-autonomous vehicles. This is further expected to generate more opportunities for engineering services companies, especially in the autonomous vehicles space. However, the negative impact of COVID-19 might delay the development and deployment of autonomous driving systems. For example, Ford delayed the rollout of autonomous vehicles till 2022, from earlier announced 2021.
The passenger cars segment is expected to be the largest and the fastest segment in the forecast
The passenger vehicles segment is the most focused vehicle segment for service providers. Technologies used in these vehicles are frequently changing due to the high demand from consumers for luxurious and ADAS features. Also, government regulations for emissions are frequently changing, influencing the manufacturers to increase the EV output ranges and offer energy-efficient as well as low maintenance technologies to consumers.
Increasing urbanization and evolving customer needs have influenced global passenger car sales in recent years. The automotive engineering services market has grown significantly in the passenger car segment due to the increasing customer demand for connectivity and safety features.
The growing demand for digital connectivity features is supported by a wide network coverage of 5G connectivity and the installation of IoT devices in premium sedans and SUVs. In the present scenario, customers want eco-friendly mobility combined with communication.
This creates an opportunity for OEMs to offer more connectivity features in their upcoming vehicles. Hence, the demand for various automotive engineering services is set to increase during the forecast period. For instance, in 2020, Altran and 5TONIC collaborated on 5G mobile projects to improve the reliability and performance of advanced driver assistance systems (ADAS) in cars.
Outsource is expected to be the fastest location segment in the forecast period
The increasing consumer demand for advanced vehicle connectivity services would fuel the market for outsourcing during the forecast period. OEMs are likely to focus on increasing their outsourcing of automotive engineering services as they prefer the flexibility to meet customers' specific demand in all regional markets. The research and testing of connected cars and cybersecurity are major challenges that contribute to a high number of software changes and software management services.
The automotive engineering services market is dominated by global players such as Capgemini (France), IAV Automotive Engineering (Germany), Tech Mahindra (India), AKKA Technologies (Belgium), and Bertrandt AG (Germany).
Market Dynamics
Drivers
- Increasing Demand for Advanced Connectivity Solutions
- Adoption of EVs and Shared Mobility for a Greener Environment
- Demand for Luxury Vehicles
Restraints
- Intellectual Property (IP) Constraint
- Shift in Business Model
Opportunities
- Standardization of Safety Features
- Rise of Autonomous Vehicles
- Demand for Outsourcing
- Implementation of Stringent Emission Norms & Environmental Regulations
Challenges
- Intense Competition
- Risk of Heavy Investments
- Security Threats
Case Study
- Model-Based System Engineering by L&T Technology Services
- Simulation-Based Development of Functional Oil Distribution in Electric Axle Systems, by AVL and Schaeffler
Company Profiles
Key Players
- Harman International
- Ricardo
- Tech Mahindra
- Capgemini
- AVL
- Bertrandt AG
- Alten Group
- L&T Technology Services
- FEV
- AKKA Technologies
- HCL Technologies
- IAV Automotive Engineering
- Altran
Other Players
- Imaginative Automotive Engineering Services
- Onward Technologies
- Automotive Engineering Services (AES)
- Kistler
- Continental Engineering Services
- EDAG
- ESI Group
- Semcon
- Segula Technologies
- GlobalLogic
- EPAM Systems
- Belcan
For more information about this report visit https://www.researchandmarkets.com/r/us069t