Automotive Contract Manufacturing Market Trends, Growth and Forecast - 2025

Automotive Contract Manufacturing Market is expected to grow at a considerable rate during the forecast period 2018-2023. Automotive contract manufacturer companies serve various product and services to the OEMs. In the automotive sector, contract manufacturing is highly prevalent owing to the ease of manufacturing the final product and increased productivity. The contract manufacturers are providing the facility for design and development, component manufacturing, electronics, and whole vehicle assembly. Additionally, due to high risk, before entering into a new market or in a new region, the automotive OEMs use the facility of contract manufacturing. Some of the factors augmenting the contract manufacturing market are increasing automotive sales globally, increasing the number of components per vehicle, and availability of skilled workforce and technology at lower cost in emerging economies. In 2017, as per International Organization of Motor Vehicle Manufacturers about 96.8 million vehicles were sold globally as compared to 94 million in 2016 which is further expected reach above 100 million in 2018. Increasing sales of the vehicle will augment the growth of contract manufacturing unit globally.

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Some of the key players operating in the global automotive contract manufacturing market are Faurecia SA, Hyundai Dymos, Lear Corp., Magna International Inc., NHK Spring Co., Ltd., PDF, Inc., Valmet Automotive Group, ZF Friedrichshafen AG, and AVTECH Ltd.

Additionally, countries such as India, China, Brazil, Mexico are providing a significant infrastructure and cheaper workforce to OEMs for contract manufacturing which is motivating shifting of component production from their own production unit to a contractor. Additionally, an initiative by the government to increase production in their countries are also augmenting the market. As an instance, India is working toward “Make in India” whereas China is enforcing its “make in China” initiative. Some of the major restraints of the market are outsourcing risks which include lack of control over production and their technique, quality concern, added price and so on. Besides this, significant opportunities can be expected due to the introduction of new technologies in the market such as a hybrid vehicle, electric vehicle, and self-driving vehicles.

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Automotive contract manufacturing market has been segmented by services offered by the contract companies and type of vehicle opting the contract manufacturing. By services, the market has been segmented into design and development, vehicle assembly, automotive electronics, and component manufacturing. Component manufacturing and vehicle assembly are expected to have a significant market share whereas automotive electronics and design and development will notice a considerable growth in the forecast period. Moreover, by vehicle type, the market has been segmented into passenger cars, two-wheelers, commercial vehicle and construction, and agricultural vehicle. It is expected that passenger cars will have a significant market along with a significant growth rate. Two wheelers are also expected to have a significant market growth in the near future.
The global automotive contract manufacturing market is further analyzed on the basis of the geographical regions that include North America, Europe, Asia-Pacific and Rest of the World. During the forecast period, it is expected that the Asia-Pacific region will hold the dominant position in the global automotive contract manufacturing market. Cheaper labor cost, continuous investment of the major market player, and favorable government policies are some of the factors that are augmenting the Asia-Pacific market.

Automotive contract manufacturing market is a diversified market which consists of several small-scale to large-scale contract manufacturing companies in a particular region. In order to sustain in the competitive market, these players adopt various strategies such as acquisitions, mergers, expansions, joint ventures, and product development and so on.

Market Segmentation

Global Automotive Contract Manufacturing Market by Services

Design and Development
Vehicle Assembly
Automotive Electronics
Component Manufacturing

Global Automotive Contract Manufacturing Market by Vehicle Type

Two Wheelers
Passenger Cars
Commercial Vehicle
Construction and Agricultural Vehicle

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