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Automotive Engineering Service Provider Industry Expected to Reach $229.65 Billion by 2029 at 7.2% CAGR

09-09-2025 09:06 AM CET | Logistics & Transport

Press release from: The Business Research Company

Automotive Engineering Service Provider

Automotive Engineering Service Provider

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Automotive Engineering Service Provider Market Value Projection: How Much Will the Market Size by 2025?
The market size for providers of automotive engineering services has seen substantial growth in the recent times. It's anticipated to rise from $162.22 billion in 2024 to $173.72 billion in 2025, reflecting a compound annual growth rate (CAGR) of 7.1%. Factors such as the burgeoning of automotive markets, the worldwide reach of industries, a shift in consumer preferences towards sustainable practices, urban expansion, and an increased focus on safety features in vehicles, are all contributors to the growth witnessed in the historic period.

What Will Be the Market Growth Forecat for Automotive Engineering Service Provider in 2029?
In the upcoming years, the automotive engineering service provider market is predicted to witness robust growth. With a compound annual growth rate (CAGR) of 7.2%, the market is anticipated to reach a value of $229.65 billion by 2029. This growth during the forecast period can be credited to stricter emissions and safety standards, a focus on efficiency and lean manufacturing, the application of industry 4.0 concepts, heightened environmental impact awareness, and the surge in popularity of electric vehicles. Among the predominant trends projected within this period are advancements in technology, the incorporation of digital technologies such as IoT and AI, the advent of lightweight materials, the rise of autonomous vehicles, and the increasing use of 3D printing.

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What Are the Core Competitive Drivers in the Automotive Engineering Service Provider Industry?
The automotive engineering service provider market is projected to grow significantly, largely driven by the rising demand for advanced driver assistance systems (ADAS). Developed to enhance vehicle safety, ADAS employs a mix of automated technologies, including sensors and cameras, to identify potential hazards and driver shortcomings and react appropriately. Regulatory requirements for safety components, consumer fascination with technologies that minmise accidents, and ADAS's promising role in enabling autonomous driving capabilities are all fueling the demand. Engineering service providers in the automotive industry play a pivotal role in the evolution of ADAS by providing specialized expertise and technological solutions to augment vehicle safety and automation. Recent statistics from the US-based Highway Loss Data Institute in April 2022 indicate that by 2026, rear view cameras and rear parking sensors will be part of 71% and 60% of registered vehicles respectively. Meanwhile, features such as curve adaptive headlights and adaptive cruise control with lane centering will witness an increase in their usage by 7% and 15%, correspondingly. Front automatic emergency braking (AEB) is predicted to rise from 18% in 2021 to 43% in 2026, largely due to a voluntary pact to outfit vehicles with AEB by 2022. Thus, the booming demand for ADAS marks a positive trend for the growth of the automotive engineering service provider market.

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Which Automotive Engineering Service Provider Market Segment Is Projected to See the Fastest Growth?
The automotive engineering service provider market covered in this report is segmented -

1) By Service: Engine, Chassis, Transmission, Car And Body In White (BIW), Seating Systems, Cooling And Heating, Ventilation, And Air Conditioning (HVAC), Interior And Exterior Trims, Other Services
2) By Module Type: Intelligent Power Module (IPM), Power Integrated Module (PIM)
3) By Vehicle Type: Passenger Car, Commercial Vehicle, Two-Wheeler
4) By Application: Mechanical, Electrical And Electronics, Software, Safety
5) By End User: Original Equipment Manufacturers (OEMs), Automotive Component Suppliers, Other End Users

Subsegments:
Here is the list following the requested format:

1) By Engine: Engine Design and Development, Engine Testing and Calibration, Powertrain Optimization
2) By Chassis: Chassis Design and Prototyping, Suspension System Design, Chassis Testing and Validation
3) By Transmission: Transmission Design and Development, Gearbox System Design, Transmission Efficiency and Performance Testing
4) By Car and Body in White (BIW): BIW Design and Engineering, BIW Manufacturing Process Optimization, BIW Assembly and Structural Integrity Testing
5) By Seating Systems: Seating Design and Prototyping, Safety Testing for Seating, Seat Comfort and Ergonomics Engineering
6) By Cooling and Heating, Ventilation, and Air Conditioning (HVAC): HVAC System Design and Optimization, Thermal Management Solutions, Cabin Comfort and Climate Control Testing
7) By Interior and Exterior Trims: Interior and Exterior Styling and Design, Trim Materials Engineering, Interior Comfort and Functionality Testing
8) By Other Services: Vehicle Lightweighting, Autonomous Vehicle Engineering, Electric Vehicle System Integration and Design

Subsegments:
Here is the list following the requested format:

1) By Engine: Engine Design and Development, Engine Testing and Calibration, Engine Performance Optimization
2) By Chassis: Chassis Design and Development, Chassis Testing and Validation, Suspension and Steering System Engineering
3) By Transmission: Transmission Design and Development, Transmission Testing and Calibration, Transmission Efficiency Optimization
4) By Car and Body in White (BIW): BIW Design and Prototyping, BIW Manufacturing Process Optimization, BIW Testing and Validation
5) By Seating Systems: Seating Design and Development, Seating Safety and Comfort Testing, Seatbelt and Airbag Integration
6) By Cooling and Heating, Ventilation, and Air Conditioning (HVAC): HVAC System Design and Development, Thermal Management Testing and Optimization, HVAC System Integration and Performance Evaluation
7) By Interior and Exterior Trims: Interior Design and Development, Exterior Design and Development, Materials and Finishing Optimization
8) By Other Services: Vehicle Lightweighting Engineering, Autonomous Vehicle Engineering, Electric Vehicle (EV) System Integration and Design

Which Trends Are Opening New Opportunities in the Automotive Engineering Service Provider Market?
Leading firms in the automotive engineering service provider market are redirecting their focus towards the development of connected service technology to improve customer service. Connected service technology is a system that allows vehicles to establish a connection with the internet and cloud-based services, enabling remote observation, control, and access to vehicle information and features through mobile applications and digital platforms. For example, in June 2024, Tata Elxsi, a technology service provider based in India, joined forces with Red Hat, Inc., a US-based software company, to expedite application mobility in a multi-cloud network for 5G-connected automobiles. The primary goal of this strategic partnership is to boost 5G connected vehicle applications using Red Hat OpenShift and Tata Elxsi Neuron while also facilitating network monetization. Tata Elxsi and Red Hat will jointly tackle 5G connected car projects using Tata Elxsi's TETHER, a Connected Vehicle Platform (CVP), and Red Hat In-Vehicle OS. This joint effort will aid in the movement of applications in 5G multi-cloud environments for telecom operators and mobile virtual network operators (MVNOs). The collaboration will utilize Red Hat OpenShift as a unified container-as-a-service (CaaS) layer across multi-cloud environments, while Tata Elxsi's Neuron platform will ensure smooth cloud automation, 5G application placement, and modernization.

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Who Are the Leaders in the Automotive Engineering Service Provider Market?
Major companies operating in the automotive engineering service provider market are Robert Bosch GmbH, Magna International Inc., Capgemini Technology Services Limited, HCL Technologies Limited, Harman International Industries Inc., Tech Mahindra Limited, Alten Group, Intertek Group plc, AVL LIST GmbH, FEV GmbH, HORIBA Ltd., Bertrandt AG, ARRK Product Development Group, EDAG Engineering GmbH, IAV GmBH, Altair Engineering Inc., Ricardo Plc, Semcon, Continental Engineering Services Ltd., P3 Automotive GmbH, Link Engineering Company, Kistler Holding AG, Magneti Marelli S.p.A

Which Regional Automotive Engineering Service Provider Markets Offer the Greatest Growth Potential?
North America was the largest region in the automotive engineering service provider market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the automotive engineering service provider market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

Speak With Our Expert:
Saumya Sahay,
Americas: +1 310-496-7795,
Asia: +44 7882 955267 & +91 8897263534,
Europe: +44 7882 955267,
Email: saumyas@tbrc.info

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With over 15,000+ reports from 27 industries covering 60+ geographies, The Business Research Company has built a reputation for offering comprehensive, data-rich research and insights. Our flagship product, the Global Market Model delivers comprehensive and updated forecasts to support informed decision-making.

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