With several companies resuming their operations and adapting to the new normal while recovering from the COVID-19 impact, the global automotive engineering services market is expected to grow from $199.0 billion in 2021 to $220.9 billion. According to a recent report by Research and Markets, the global market is anticipated to reach $336 billion in 2026 at a CAGR of 11.06%.
Earlier, these companies were led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities due to COVID-19, resulting in operational challenges.
The automotive engineering services market consists of sales of engineering services by entities (organisations, sole traders, and partnerships) that include mechanical, electrical, software, safety, and electronics engineering for designing vehicles.
Automotive engineering services optimise the manufacturing process to improve the overall operational efficiency of the vehicle. In addition, the services offer advanced and innovative features in comfort, infotainment, and safety by integrating advanced electronics into vehicles.
Major players in the automotive engineering services market are Capgemini Se, IAV, Tech Mahindra, AKKA Technologies, Bertrandt AG, Harman International, Alten Cresttek, L & T Technology Services, Fev Europe, AVL, FEV, Ricardo, EDAG Engineering GmbH, Valmet Automotive, Onward Technologies, T-NET Japan, Kistler Group, Continental AG, Semcon, and Robert Bosch. The report covers Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, the UK, USA.
The main vehicle types covered by automotive engineering services include passenger cars and commercial vehicles. Passenger cars are designed and manufactured for carrying passengers and have fewer than eight seats, excluding the driver's seat. The different automotive engineering service types include concept/research, designing, prototyping, system integration and testing.
Automotive engineering services are located on-shore and off-shore for different applications such as electrical, electronics, body controls, ADAS, safety, chassis, connectivity services, powertrain and exhaust, interior, exterior, and body engineering and simulation.
According to Research and Markets, the Asia-Pacific was the largest region in the automotive engineering services market in 2021. The regions covered in this report include Asia-Pacific, Western Europe, Eastern Europe, North America, South America, the Middle East, and Africa.
The rising demand for emission-less transportation is expected to propel the growth of the automotive engineering services market. Using fossil fuels like diesel and gasoline releases greenhouse gases such as carbon dioxide, methane, hydrofluorocarbons, and nitrous oxide into the atmosphere, resulting in changes to the climate and thus increasing demand for emission-less transport mediums such as electric vehicles, the report said.
For instance, in 2021, electric car sales doubled to 6.6 million from three million in 2020. The rising demand for emission-less transportation lowers fossil fuel consumption and reduces greenhouse gas emissions. The demand for emission-less transportation coupled with increased awareness of emission-less transportation is expected to propel the automotive engineering services market.
Deploying Artificial Intelligence (AI) in automotive engineering is a key trend gaining popularity. Helpful AI algorithms and controllers assist in providing a realistic driving-range estimation and optimising energy conservation in electric vehicles, ultimately assisting in adding additional driving range. AI is also at the core of self-driving cars, which are becoming increasingly popular in the automotive industry.
For instance, in 2021, US-based automobile manufacturer Ford collaborated with Google to leverage AI to improve customer experiences, accelerate the modernisation of product development, enhance manufacturing and supply chain management, and fast-track the implementation of data-driven business models, the report added.
Courtesy: Research and Markets. Photo is representational; courtesy: Continental.