April 4, 2020

Automotive Engineering Services Outsourcing (ESO) Market will be Growing at a CAGR of 8.3% during the forecast period from 2019 to 2027

According to a new market research report published by Credence Research, the global automotive engineering services outsourcing (ESO) market was valued at US$ 43.13 billion in 2018 and is expected to expand to CAGR by 8.3 per cent during the 2019-2027 forecast.

Market Insight

After a period of lull during unstable economic conditions, the automotive industry has regained momentum and is set to grow steadily in the coming years. The gradual shift in technology towards electrification, autonomous driving and connected services is driving R&D activities and attracting investment in the automotive industry. In 2016-17, the automotive industry globally invested more than US$ 126 billion in R&D, with Europe leading the spending share (47%). In addition, strict regulations have placed serious strain on small automotive engineering firms, such as testing, calibration of powertrains and homologation, among others. With the inflexible and capability-intensive internal engineering capacity of OEMs, outsourcing of R&D operations has become an increasingly important medium for the timely implementation of technology integration, while also managing the workload of internal engineering resources. Many automotive manufacturers worldwide work in conjunction with engineering service providers to design, prototype, develop and test new components. For example, in February last year, Jaguar Land Rover Ltd. joined forces with ALTEN to design and develop new engines. Similar trends can be observed across the industry.

Browse the full report at “Automotive Engineering Services Outsourcing (ESO) Market

In terms of vehicle type, the contribution of engineering services to internal combustion engine vehicles was the highest. The trend will be expanded and the value contribution from internal combustion engine vehicles will remain the highest during the forecast period. However, engineering outsourcing services for electric vehicles are expected to increase at a higher rate of growth. The growing need to reduce dependence on fossil fuels and government support in the form of subsidies and incentives will drive the uptake of electric vehicles and, along with that, complementary engineering services. In addition, since development process of new electric drives is cost intensive and time consuming, manufacturers prefer outsourcing it to third party sources.

Some of the leading companies profiled in the research study include Onward Technologies Ltd., Alten SA, Altran Technologies Limited, AVL, ESG Elektroniksystem- und Logistik-GmbH, P3 Automotive GmbH, ITK Engineering GmbH, Kistler Instrumente AG, M Plan GmbH, EDAG Engineering GmbH, Bertrandt, and MBtech Group GmbH among others. Although the automotive industry is on steady path of recovery and offering favorable market environment for automotive engineering service providers, their profitability has declined over the last few years in spite of taking over bigger chunks of work from clients. A trend towards increased consolidation/mergers & acquisitions in a bid to build up necessary competences and capacity can be observed in the market.

 

Credence Research is Providing Free Sample Here

Report Scope by Segments

Application Segment (2017–2027; US$ Bn)

  • Designing & Prototyping
  • Development & Integration
  • Testing
  • Body Leasing

Service Model Segment (2017–2027; US$ Bn)

  • On-shore Automotive Engineering Services Outsourcing
  • Off-shore Automotive Engineering Services Outsourcing

Vehicle Type Vertical Segment (2017–2027; US$ Bn)

By Geography Segment

  • North America (U.S., Rest of North America)
  • Europe (U.K., Germany, France, Rest of Europe)
  • Asia Pacific (China, Japan, India, Rest of Asia Pacific)
  • Rest of the World (Middle East & Africa, Latin America)

Credence Research is Providing Free Sample Here

 

Leave a Reply

Your email address will not be published. Required fields are marked *