Press release
Global Automotive Contract Manufacturing Market Forecasted to Expand at 7.6% CAGR Through 2029
Automotive Contract Manufacturing Market
The automotive contract manufacturing market has expanded significantly in recent years, with its value expected to grow from $40.73 billion in 2024 to $43.96 billion in 2025, supported by a 7.9% CAGR. This steady historical growth has been fueled by the rise of modular vehicle platforms, increasing demand for cost-efficient production models, a broader reliance on outsourced manufacturing, heightened focus on meeting regulatory and quality standards, and gains in workforce productivity among contract manufacturers.
Forecast valuation for the Automotive Contract Manufacturing Market by 2029
Looking ahead, the market is anticipated to reach $58.90 billion by 2029, advancing at a 7.6% CAGR. The forecasted expansion is driven by growing needs for electric vehicle (EV) assembly, wider adoption of flexible manufacturing systems, increased demand for rapid prototyping, rising requirements for autonomous vehicle components, and the adoption of more advanced assembly processes. Key trends expected during this period include advancements in robotics and automation, deeper integration of digital twins and simulation tools, increased investment in smart manufacturing research, new innovations in connected vehicle production, and the growth of environmentally sustainable manufacturing approaches.
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Drivers supporting growth in the Automotive Contract Manufacturing Market
One of the primary forces driving market expansion is the accelerating shift toward electric vehicles (EVs). These zero-emission models reduce reliance on fuel, lower operating costs, and require less maintenance, encouraging both consumers and businesses to embrace more sustainable transportation options.
Rising EV adoption fueling the Automotive Contract Manufacturing Market
As EV demand grows, contract manufacturers benefit from their ability to scale production quickly without requiring major capital investment in new facilities. According to the European Environment Agency, electric vehicles accounted for 22.7% of new passenger car registrations and 7.7% of van registrations in December 2023-up from 19% and 6% respectively in 2022. This increasing appetite for EVs directly boosts the demand for specialized contract manufacturing services.
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Trends reshaping the Automotive Contract Manufacturing Market
Companies in the automotive contract manufacturing space are integrating semi-knock-down (SKD) production techniques to support flexible assembly and expand EV manufacturing closer to target regions. SKD involves importing partially assembled vehicles and completing final assembly locally, helping manufacturers reduce logistics expenses, meet regional regulations, and accelerate market entry.
Industry example in the Automotive Contract Manufacturing Market
A notable instance occurred in September 2025 when Magna International began contract assembly of XPENG's G6 and G9 electric SUVs in Graz. These models are assembled from SKD kits shipped from China, enabling XPENG to optimize costs, reduce delivery times, meet European Union regulatory requirements, and strengthen its EV footprint across Europe through Magna's advanced facilities, flexible assembly setups, and strong quality standards.
Segment overview of the Automotive Contract Manufacturing Market
The automotive contract manufacturing market covered in this report is segmented -
By Service Type: Complete Vehicle Manufacturing, Component Or Module Manufacturing, Design And Engineering Services
By Contract Type: Build-To-Print (BTP), Build-To-Specification (BTS), Joint Development Manufacturing (JDM)
By Application: Two Wheelers, Passenger Cars, Commercial Vehicle, Construction And Agricultural Vehicle
By End Use: Original Equipment Manufacturer (OEM), Aftermarket
Subsegments:
Complete Vehicle Manufacturing: Passenger Vehicles, Commercial Vehicles, Electric Vehicles (EVs), Two-Wheelers, Off-Highway Vehicles
Component Or Module Manufacturing: Powertrain And Engine Systems, Chassis And Suspension Components, Body And Exterior Parts, Interior Modules, Electrical And Electronic Systems
Design And Engineering Services: Concept And Prototype Development, Product Design And Simulation, Testing And Validation, Tooling And Process Design, Vehicle Integration Engineering
Major companies leading the Automotive Contract Manufacturing Market
Key players operating in the automotive contract manufacturing market include Foxconn Technology Group; Continental AG; Magna International; Aisin Seiki; Jabil Inc.; Benteler International AG; Ficosa International; Kautex Textron; VDL Groep; Valmet Automotive Group; SVI Public Company Limited; AM General LLC; Astro Machine Works Inc.; Edison Manufacturing & Engineering Inc.; Brabus Automotive GmbH; Alchemy MFG LLC; Bunty LLC; HANA Technologies Inc.; Machinemaze; Solidify Manufacturing; IWN GmbH & Co. KG.
Regional insights for the Automotive Contract Manufacturing Market
Asia-Pacific was both the largest and fastest-growing region in the automotive contract manufacturing market in 2024. The covered regions include Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, and Africa.
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