USD 120.3 billion
Automotive Engineering Services Outsourcing Market Size, Share, and Growth Analysis
Automotive Engineering Services Outsourcing Market By Service (Designing, Prototyping), By Vehicle Type (Passenger Vehicles, Commercial Vehicles), By Location Type (On-shore, Off-shore), By Nature Type, By Propulsion, By Application, By Region - Industry Forecast 2025-2032
Report ID:
SQMIG45B2205 |
Region:
Global |
Published Date: March, 2025
Pages:
189
|Tables:
93
|Figures:
71
Format -
Automotive Engineering Services Outsourcing Market Insights
Automotive Engineering Services Outsourcing Market size was valued at USD 120.3 billion in 2023 and is poised to grow from USD 132.45 billion in 2024 to USD 285.99 billion by 2032, growing at a CAGR of 10.1% during the forecast period (2025-2032).
The rapid need of advanced and improved connectivity solutions from automotive manufacturing houses is creating global automotive engineering services outsourcing market growth opportunities. Moreover, demand for enhanced connectivity solutions such as navigation, smart infotainment, passenger safety, and remote diagnostics is enhancing market growth prospects. The growing technological skills of Engineering Service Providers (ESPs) in providing research and development (R&D) and product innovation in their offerings for vehicle positioning, connected automobiles, and guidance systems are expected to fuel the market growth. In addition, the increasing initiatives by governments to deploy green vehicles to reduce harmful gas discharges are also propelling the market growth. The automotive ESO industry developed from mechanical services provision to high-tech solutions integration, including Artificial Intelligence (AI), Internet of Things (IoT), and many others.
Due to the rapid integration of Information Technology (IT) in automobiles, advanced services rose with the achievement of commutation objectives and comfort, safety, and ease of use for consumers. The increasing trend of OEMs towards digitalized solutions is predicted to open doors for growth in the market. This is because end-users are gradually changing their paradigms toward more technological solutions. The ACES disruptions are a digitalized model adopted by key players in the market, allowing advanced mobility standards to improve consumer's interaction and experience with vehicles.
Market snapshot - 2025-2032
Global Market Size
Largest Segment
On-Shore
Fastest Growth
Off-Shore
Growth Rate
10.1% CAGR
Global Automotive Engineering Services Outsourcing Market ($ Bn)
Country Share for North America (%)
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Automotive Engineering Services Outsourcing Market Segments Analysis
Global Automotive Engineering Services Outsourcing Market is segmented by Service, Vehicle Type, Location Type, Nature Type, Propulsion, Application and region. Based on Service, the market is segmented into Designing, Prototyping, System Integration, Testing and Others. Based on Vehicle Type, the market is segmented into Passenger Vehicles and Commercial Vehicles. Based on Location Type, the market is segmented into On-shore and Off-shore. Based on Nature Type, the market is segmented into Body Leasing and Turnkey. Based on Propulsion, the market is segmented into ICE and Electric. Based on Application, the market is segmented into Autonomous Driving/ADAS, Body and Chassis, Powertrain and After-treatment, Infotainment and Connectivity and Others. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa.
Analysis by Service
As per the 2024 global automotive engineering services outsourcing market analysis, the prototyping segment held the highest market revenue share. Growth in the segment is due to the increased adoption of advanced technologies, such as 3D printing technology, by the automotive industry to design a prototype of an assembly, certain parts, or a model of an entire car. With 3D printing technology, manufacturers can rapidly identify loopholes in the prototype and take corrective measures in a timely manner, supporting a cost-efficient approach. Moreover, prototyping enables faster iteration and validation of designs, delivering shorter product development cycles, which is crucial in the highly competitive automotive industry, where time-to-market is a significant differentiator. This service has seen a rise in demand, which is predicted to provide attractive growth opportunities for automotive ESO providers, hence supporting segment growth.
The design segment is expected to witness significant growth in the near future due to increased investments by manufacturers toward the development of advanced automobile features. Increasing demand for high-tech design tools such as advanced Computer-Aided Design (CAD), Virtual Reality (VR) technologies, and simulation software that help create sophisticated and efficient vehicle design processes is a big opportunity for engineering services outsourcing providers. The growing trend of carmakers focusing more on user experience through innovative vehicle design with ergonomic interiors and advanced infotainment systems and intuitive interfaces is also providing an impetus to seek ESO providers that can provide expertise in the design process.
Analysis By Location
Based on the 2024 global automotive engineering services outsourcing market forecast, the on-shore segment generated the highest revenue share, driven by the OEMs' preferences to collaborate with locally available ESPs. Skilled workforce in on-shore locations have experience and expertise in the design, testing, validation, and regulatory compliance in automotive engineering. In addition, on-shore locations offer more robust legal protection for intellectual property rights than offshore locations. The issues, such as varying time zones, language, and laws & regulations imposed, while dealing with ESPs from another country, restrain OEMs from outsourcing from other countries, thereby causing a sharp rise in the demand for the on-shore segment. The growing use of automation technology and self-serve solutions has prompted automobile OEMs to seek support from on-shore engineering service firms.
The off-shore segment is expected to show a substantial CAGR during the forecast period. The off-shore trend in the market is growing as major OEMs look to offshoring increasingly complex engineering services to countries with a lower cost of labor. Automotive companies benefit from saving overhead, yet remain competitive for requirements such as R&D, CAD, and software integration using skilled engineers harnessed from offshore locations. This trend is leading in emerging markets like India and Southeast Asia because of the growing talent there, along with their increasing technological capabilities. By this shift in offshore outsourcing, companies are able to fulfill the rapid change in automotive, where both innovation and efficiency are the watchwords.
Global Automotive Engineering Services Outsourcing Market By Location
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Automotive Engineering Services Outsourcing Market Regional Insights
North America is the leading market for automotive engineering services outsourcing (ESO) with a revenue share of more than 21% in 2024, led by rapid technological advancements and increased adoption of electric and autonomous vehicles. Innovation and research and development are high on the priority list of this region, making it a competitive market where companies seek specialized engineering expertise to remain competitive. This increasing focus on developing next generation vehicles has created intense demand for leading-edge ESO providers. The market player keeps updating and enriching service with the focus of improving customers' experience, who optimize their expenditures and increase operational efficiency. Another driver of further accelerating the development in North American is the co-operations built between OEM and ESO suppliers.
Asia-Pacific is the dominant region in the market in automotive engineering services, accounting for 43.77% revenue share in 2024. It is expected to witness the highest CAGR over the forecast period. The primary driver for this growth is the adoption of electric passenger cars in the region, especially in China, where government initiatives are geared towards reducing emissions and encouraging green technology. The automobile companies of the region are now increasingly outsourcing specialized engineering expertise for compliance with strict environmental regulations and innovative products. Asia Pacific has the edge due to government policies favorable to the automobile sector, an efficient skilled workforce, and low-cost engineering solutions. The fast growth trend emphasizes that Asia Pacific is the leading market.
Global Automotive Engineering Services Outsourcing Market By Geography
- Largest
- Fastest
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Automotive Engineering Services Outsourcing Market Dynamics
Automotive Engineering Services Outsourcing Market Drivers
Increasing Demand for Electric and Autonomous Vehicles
- Electrification and self-driving vehicles justify the growing demand for specific engineering skills. In such a competitive world, automotive companies are outsourcing their engineering services to take proper advantage of severe environmental regulations in developing sophisticated technologies such as electric drivetrains, battery management systems, and autonomous driving solutions.
Cost-Effective Engineering Solutions
- Outsourcing engineering services allows companies to save on costs by tapping into the expertise of specialized providers in regions with a cost-effective workforce. This way, organizations can focus on core competencies while outsourcing complex tasks such as design, prototyping, and testing, ensuring operational efficiency and quicker time-to-market.
Automotive Engineering Services Outsourcing Market Restraints
Concerns Over Intellectual Property (IP) Security
- The major reason that makes companies avoid outsourcing engineering services is the risk of losing proprietary data and intellectual property. Since the third-party provider will handle the company's sensitive designs and technological details, this is a source of risk of data breaches, and outsourcing may face setbacks in such highly competitive markets.
Complexities in Managing Outsourced Projects
- Outsourced engineering projects are often problematic to manage because of the different time zones, communication gaps, and inadequate collaboration tools. The misaligned project goals and expectations between outsourcing companies and providers can lead to cost overruns, delays, and quality issues, making it harder for markets to grow.
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Automotive Engineering Services Outsourcing Market Competitive Landscape
Leading companies that focus on innovation and strategic alliances form the competitive landscape of the global automotive engineering services outsourcing (ESO) industry. Businesses are investing in cutting-edge technology such as autonomous driving, electric cars, and green solutions to meet changing consumer needs. Competitive factors include cost effectiveness, knowledge of cutting-edge technology, and customized services; Asia Pacific is becoming known as a center for highly qualified, reasonably priced engineering solutions.
Top Player’s Company Profile
- Bertrandt AG (Germany)
- IAV GmbH (Germany)
- AVL List GmbH (Austria)
- EDAG Group (Switzerland)
- AKKA Technologies (France)
- Altran (Capgemini Engineering) (France)
- FEV Group GmbH (Germany)
- Alten Group (France)
- P3 group GmbH (Germany)
- Altair Engineering Inc. (USA)
- RLE International Group (Germany)
- ASAP Holding GmbH (Germany)
- Kistler Group (Switzerland)
- Tata Consultancy Services Limited (India)
- Infosys Limited (India)
- Tech Mahindra Limited (India)
- HCL Technologies Limited (India)
- Wipro Limited (India)
Recent Developments
- In June 2024, HORIBA, Ltd. launched the new STARS Battery software that meets the diverse requirements of battery testing. The HORIBA STARS Automation is a flexible platform for test automation, which provides a complete set of tools to tackle a wide range of testing tasks in the mobility area. By integrating the STARS Battery in the STARS Automation tool set, HORIBA was able to provide a dedicated application for the performance and endurance testing of batteries.
- In May 2024, Bertrandt AG completed the acquisition of CENTUM SOLUTIONS, S.L.U. (Centum Digital), a company famous for offering engineering services based on cutting-edge technologies and innovative products. The acquisition was in line with Bertrandt AG's objectives of increasing its global presence, enhancing its digital capabilities, and accelerating innovative efforts.
- In January 2024, EDAG Engineering GmbH further strengthened its global presence by opening two new facilities in Austria in Steyr and Neustift. The Steyr and Neustift locations were already operational since December 2023 and offered an extensive range of services in vehicle development and robotics.
Automotive Engineering Services Outsourcing Key Market Trends
- Improved Leverage of Digital Engineering Tools: Outsourcing techniques are evolving with the help of advanced digital engineering tools such as computer-aided design (CAD), simulation software, and virtual prototyping. With these technologies, suppliers can offer more accurate and efficient solutions, which reduces development time and enhances the overall quality of engineering services outsourced.
- Focus on Green and Sustainable Technologies: Due to the global trend toward sustainability, automotive firms are seeking ESO providers who have experience in green technology. This means developing solutions for fuel-efficient lightweight materials, electric vehicle technology, and integration of renewable energy sources. This trend is further supported by the fact that governments emphasize reducing emissions, which pushes innovation in sustainable car engineering.
Automotive Engineering Services Outsourcing Market SkyQuest Analysis
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected using Primary Exploratory Research backed by robust Secondary Desk research.
As per SkyQuest analysis, the global automotive engineering services outsourcing (ESO) market outlook is predicted to change steadily because of factors such as cost-cutting, use of the latest digital technologies, and increased demand for electrified and driverless cars. To gain specialized expertise, reduce costs, and boost innovation, companies are increasingly outsourcing engineering tasks. Asia Pacific leads in the industry mainly due to highly qualified workforce cost-effectiveness and pro-government regulations that boost green technology. Issues such as managing the project and dealing with intellectual property remain, yet changes in AI, virtual prototyping, and sustainable engineering seem to be making the difference in this industry. Providers of ESO stand at an advantage to influence significant changes in how the automobile world globally transforms given that innovation picks its pace within this sector.
| Report Metric | Details |
|---|---|
| Market size value in 2023 | USD 120.3 billion |
| Market size value in 2032 | USD 285.99 billion |
| Growth Rate | 10.1% |
| Base year | 2024 |
| Forecast period | 2025-2032 |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
|
| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
|
| Customization scope | Free report customization with purchase. Customization includes:-
|
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Table Of Content
Executive Summary
Market overview
- Exhibit: Executive Summary – Chart on Market Overview
- Exhibit: Executive Summary – Data Table on Market Overview
- Exhibit: Executive Summary – Chart on Automotive Engineering Services Outsourcing Market Characteristics
- Exhibit: Executive Summary – Chart on Market by Geography
- Exhibit: Executive Summary – Chart on Market Segmentation
- Exhibit: Executive Summary – Chart on Incremental Growth
- Exhibit: Executive Summary – Data Table on Incremental Growth
- Exhibit: Executive Summary – Chart on Vendor Market Positioning
Parent Market Analysis
Market overview
Market size
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- SWOT Analysis
KEY MARKET INSIGHTS
- Technology Analysis
- (Exhibit: Data Table: Name of technology and details)
- Pricing Analysis
- (Exhibit: Data Table: Name of technology and pricing details)
- Supply Chain Analysis
- (Exhibit: Detailed Supply Chain Presentation)
- Value Chain Analysis
- (Exhibit: Detailed Value Chain Presentation)
- Ecosystem Of the Market
- Exhibit: Parent Market Ecosystem Market Analysis
- Exhibit: Market Characteristics of Parent Market
- IP Analysis
- (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
- Trade Analysis
- (Exhibit: Data Table: Import and Export data details)
- Startup Analysis
- (Exhibit: Data Table: Emerging startups details)
- Raw Material Analysis
- (Exhibit: Data Table: Mapping of key raw materials)
- Innovation Matrix
- (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
- Pipeline product Analysis
- (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
- Macroeconomic Indicators
COVID IMPACT
- Introduction
- Impact On Economy—scenario Assessment
- Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
- Revised Market Size
- Exhibit: Data Table on Automotive Engineering Services Outsourcing Market size and forecast 2021-2027 ($ million)
- Impact Of COVID On Key Segments
- Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
- COVID Strategies By Company
- Exhibit: Analysis on key strategies adopted by companies
MARKET DYNAMICS & OUTLOOK
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- Regulatory Landscape
- Exhibit: Data Table on regulation from different region
- SWOT Analysis
- Porters Analysis
- Competitive rivalry
- Exhibit: Competitive rivalry Impact of key factors, 2021
- Threat of substitute products
- Exhibit: Threat of Substitute Products Impact of key factors, 2021
- Bargaining power of buyers
- Exhibit: buyers bargaining power Impact of key factors, 2021
- Threat of new entrants
- Exhibit: Threat of new entrants Impact of key factors, 2021
- Bargaining power of suppliers
- Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
- Competitive rivalry
- Skyquest special insights on future disruptions
- Political Impact
- Economic impact
- Social Impact
- Technical Impact
- Environmental Impact
- Legal Impact
Market Size by Region
- Chart on Market share by geography 2021-2027 (%)
- Data Table on Market share by geography 2021-2027(%)
- North America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- USA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Canada
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Europe
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Germany
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Spain
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- France
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- UK
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Europe
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Asia Pacific
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- China
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- India
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Japan
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Korea
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Asia Pacific
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Latin America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Brazil
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of South America
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Middle East & Africa (MEA)
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- GCC Countries
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Africa
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of MEA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
KEY COMPANY PROFILES
- Competitive Landscape
- Total number of companies covered
- Exhibit: companies covered in the report, 2021
- Top companies market positioning
- Exhibit: company positioning matrix, 2021
- Top companies market Share
- Exhibit: Pie chart analysis on company market share, 2021(%)
- Total number of companies covered
Methodology
For the Automotive Engineering Services Outsourcing Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Automotive Engineering Services Outsourcing Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Automotive Engineering Services Outsourcing Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Automotive Engineering Services Outsourcing Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
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