Automotive Engineering Services Outsourcing Market Is Expected To Contribute To The Segment Growth In The Coming Years

 Automotive Engineering Services Outsourcing Industry Overview

The automotive engineering services outsourcing market size was estimated at USD 65.5 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 27.8% from 2020 to 2027.

Growing technical capabilities of Engineering Service Providers (ESPs) to offer R&D and product innovation in their offerings for vehicle positioning, connected cars, and guidance systems are anticipated to drive the market. Furthermore, the abrupt shift in preferences of OEMs for digitized solutions over mechanical and core assistance is expected to contribute to the market’s overall revenue.

 

Gather more insights about the market drivers, restrains and growth of the Global Automotive Engineering Services Outsourcing Market

 

Increasing emphasis of the automotive industry on manufacturing automobiles with five significant trends, namely, Electrified, Autonomous, Shared, Connected, and Yearly updated ('EASCY') is anticipated to provide opportunities to the ESO market players. Engineering support providers are focused on offering solutions supporting these trends so as to provide a competitive edge to their clients. For instance, Altran announced the release of its fronthaul framework that is deployed on Intel Field Programmable Gate Arrays (FPGAs) and will assist network equipment as well as wireless carriers’ manufacturers for aggregating large-scale 5G fronthaul deployment.

De-verticalization, which is the process of desegregating services and functions from a vertically integrated business, has attained traction over the last two decades. In case of de-verticalization, OEMs transfer their designing and product manufacturing aspects to the ESPs. The automotive services outsourcing industry has majorly benefitted from this phenomenon as it has helped in creating a more global-scale supply base with newly established assembly plants, thereby resulting in the geographic expansion of the ESO companies.

Furthermore, modular outsourcing has also gained prominence as the manufacturers are demanding standardized interfaces incorporated with self-contained functional units in their automobiles. The advent of modular designs has enabled the automotive OEMs to outsource complicated self-contained modules in addition to the procurement of services for simpler vehicle parts.

However, instead of procuring services from ESPs, certain OEMs emphasize on fabricating their end-products in-house at their main centers or captive destinations due to the complexity of engine design, powertrain design, and transmission systems. In fact, the rising concerns around the disclosure of intricate designs of automobiles and intellectual property rights have compelled the OEMs to establish their own manufacturing units at off-shore locations. Transformation of business models wherein the manufacturers are now designing the product in-house is anticipated to be a roadblock to the otherwise growing market.

 

Browse through Grand View Research's Automotive & Transportation Industry Research Reports.

  • Shared Mobility Market - The global shared mobility market size was valued at USD 166.3 billion in 2021 and is anticipated to expand at a compound annual growth rate (CAGR) of 16.9% from 2022 to 2030.

 

  • Smart Transportation Market - The global smart transportation market size was valued at USD 101.26 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 12.6% from 2022 to 2030. 

 


Automotive Engineering Services Outsourcing Market Segmentation

Grand View Research has segmented the global automotive Engineering Services Outsourcing (ESO) market on the basis of application, service, location, and region:

  • Automotive ESO Application Outlook (Revenue, USD Billion, 2016 - 2027)
    • Autonomous Driving/ADAS
    • Body & Chassis
    • Powertrain and After-treatment
    • Infotainment & Connectivity
    • Others

 

  • Automotive ESO Service Outlook (Revenue, USD Billion, 2016 - 2027)
    • Designing
    • Prototyping
    • System Integration
    • Testing
    • Others

 

  • Automotive ESO Location Outlook (Revenue, USD Billion, 2016 - 2027)
    • On-shore
    • Off-shore

 

  • Automotive ESO Regional Outlook (Revenue, USD Billion; 2016 - 2027)
    • North America
    • Europe
    • Asia Pacific
    • Latin America
    • MEA

 

Market Share Insights

  • May 2019: Alten collaborated with Syrphus GmbH, which designs unmanned autonomous vehicles and aircraft as well as offers services for multicopter and manned aviation.
  • July 2018: IAV GmbH entered into a strategic partnership with vehicle component provider Ziehl-Abegg Automotive GmbH & Co. KG and body manufacturer Tassima AG for electrifying double-decker tourist buses.


Key Companies profiled:

Some prominent players in the Automotive Engineering Services Outsourcing market include

  • Alten GmbH
  • Altran Technologies S.A.
  • HORIBA, Ltd.
  • Bertrandt
  • AVL List GmbH

 

Order a free sample PDF of the Automotive Engineering Services Outsourcing Market Intelligence Study, published by Grand View Research. 

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