Automotive Engineering Services Market Revenue to Attain USD 428.09 Bn by 2033

09 Apr 2025

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Table of Content

1. Automotive Engineering Services Market Revenue and Trends 2025 to 2033 2. Market Overview     3. Report Highlights  4. Market Trends 5. Regional Insights 6. Automotive Engineering Services Market Coverage 7. Market News 8. Automotive Engineering Services Market Key Players 9. Market Segmentation

Automotive Engineering Services Market Revenue and Trends 2025 to 2033

The global automotive engineering services market revenue surpassed USD 215.79 billion in 2025 and is predicted to attain around USD 428.09 billion by 2033, growing at a CAGR of 8.94%. The market is driven by rapid growth due to advances in electric vehicles, autonomous driving cars, and the ongoing demand for new and innovative connected and sustainable mobility solutions.

Market Overview    

Automotive engineering services are solutions focused on improving vehicle design, manufacture, and performance of vehicles. It plays a fundamental role in the manufacture and processing of vehicle components that require the highest levels of quality for mechanical, electrical, and software systems. Automotive engineering services also cover upgrades to engines, transmissions, chassis, and components that will enhance vehicle performance and functionality. 

The increase in consumer demand for vehicle customization and personalization is prompting automakers to invest more in engineering services. The automotive engineering services market is also growing due to the demand for advanced ways of connectivity, such as navigation systems, connected vehicle systems, and advanced safety features. In addition, government initiatives supporting green vehicle technologies, such as electric vehicles and sustainable manufacturing, are driving the market.

Report Highlights 

• By location, the in-house segment contributed the highest automotive engineering services market share in 2024. Automotive firms often choose in-house engineering to maintain control over critical processes such as design, development, and testing. The outsourcing segment is estimated to grow rapidly during the forecast period. With the continuous pressure for fast design, prototype, manufacture, and commercialize of new products, companies are relying more upon outsourcing engineering services.
• By service, the prototyping segment held the largest market share in 2024. There is an increase in the use of advanced technologies, such as 3D printing, by the automotive industry to manufacture prototype assemblies, parts, or even entire vehicle models. The designing segment is predicted to grow at the fastest rate during the forecast period. The changing focus of OEMs on creating a better user experience with contemporary vehicle products, comfortable interiors, and sophisticated in-vehicle entertainment systems has given rise to demand for ESO providers with design experience. 
• By application, the powertrain and after-treatment segment captured the biggest market share in 2024, driven by the electrification of powertrains, replacing internal combustion engines (ICE) powered by gasoline and petroleum, which all lead to reduced carbon emissions. The body and chassis segment is expected to grow at a significant CAGR from 2025 to 2034. A significant increase in the production levels of environmentally friendly vehicles to meet minimum emission requirements.

Market Trends

R&D Investment in the Automotive Industry

Research and development (R&D) investments in the automotive industry are driving market growth through increased product innovation. Investment is also made to reduce development costs while addressing extreme government regulations, which expand the automotive engineering services market.

Developments in Autonomous Vehicles

Advanced automotive engineering services are necessary to strengthen autonomous vehicles' sensing capabilities to manage and interpret their environment. As automated driving occurs more widely, it is anticipated that the confluence of driverless vehicles will reduce accidents and street congestion due to human error.

Increased Digitization and Electrification

The automobile industry is also turning to automotive engineering services for the digitization and electrification of vehicles. Additionally, features such as advanced driving assistance systems (ADAS) and enhanced safety systems integrate ESPs are developing vehicles.

Regional Insights

Asia Pacific holds a significant market share, as the sector generated the largest revenue in 2024. The region benefits from a highly developed automotive manufacturing base driven by increasing consumer demand for electric vehicles (EVs) and many technological advancements. Countries in the region, such as China, Japan, and India, are investing heavily in research and development. 

China is the largest automotive manufacturer globally; it is also a leader in EV manufacturing. More funding and investments in electric vehicles and sustainable transportation have been witnessed across China. Moreover, regular support of the R&D process to fuel innovation with a focus on smart manufacturing has positioned China as the leading destination for automotive engineering service providers both at the multinational and domestic levels.

• In November 2024, Suzuki Motor Corporation and Tata Elxsi launched the 'SUZUKI-TATA ELXSI Offshore Development Center' in Pune, India. The center has the function of backing innovative work at Suzuki with the aim of striving for advanced engineering to create a future of mobility.

North America is expected to register the highest growth in the world automotive engineering services market. The region has a high weighting of innovation, with significant levels of investment in electric and autonomous vehicle technologies. The advanced R&D infrastructure and the emerging trend of connected cars and intelligent mobility solutions complement the overall growth of the market.

The U.S. projects significant growth in the automotive engineering services market. This growth will primarily be fuelled by new automotive technologies and growing pressure from automotive companies to innovate. U.S. automotive companies are increasingly developing partnerships and collaborations with ESO providers to accelerate product development timelines, commercialize advanced technologies, and remain competitive in a rapidly growing global market.

Automotive Engineering Services Market Coverage

Market News

• In April 2024, Infosys acquired InTech for 450 million euros. As the leading provider of engineering R&D services within the German automotive sector, this acquisition is expected to close in Q1 of FY25 and enhance the strength of Infosys in e-mobility, connected and autonomous driving, and electric vehicles.
• In June 2024, HORIBA, Ltd. launched the STARS Battery software as part of its STARS Automation platform that offers specific tools for battery testing and life cycle assessment for the automotive industry. 
• In May 2024, Bertrandt AG acquired CENTUM SOLUTIONS, S.L.U. (Centum Digital) to further boost its global footprint, create entirely new avenues of digital capabilities, and be the catalyst of innovations.

Automotive Engineering Services Market Key Players

• Tech Mahindra Limited
• L&T Technology Services
• IAV Automotive Engineering
• HCL Technologies
• Harman International Industries Inc.
• AltenCresttek Company
• Akka Technologies
• Fev Europe GmbH
• Capgemini SE
• Bertrandt AG

Market Segmentation

By Location

• In-House
• Outsource

By Service

• Designing
• Prototyping
• System Integration
• Testing
• Others

By Application

• Autonomous Driving
• Body & Chassis
• Powertrain & After-treatment
• Infotainment & Connectivity
• Simulation
• Battery Development & Management
• Charger Testing
• Motor Control
• Others

By Vehicle Type

• Passenger Cars
• Commercial Vehicles

By Nature

• Body-Leasing
• Turn-Key

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