Automotive Engineering Service Providers (ESP) Market size is set to grow by USD 10.91 bn from 2024-2028, increasing digitization and electrification of automobiles to boost the market growth, Technavio

NEW YORK, May 14, 2024 /PRNewswire/ — The global automotive engineering service providers (esp) market size is estimated to grow by USD 10.91 bn from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of over 9.64% during the forecast period. 

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Forecast period

2024-2028

Base Year

2023

Historic Data

2018 – 2022

Segment Covered

Application (In-house and Out-source), Product Type (Powertrain, Complete vehicle, Electrical/electronics, and Others), and Geography (Europe, APAC, North America, South America, and Middle East and Africa)

Region Covered

Europe, APAC, North America, South America, and Middle East and Africa

Key companies profiled

Adecco Group AG, Altair Engineering Inc., ASM Technologies Ltd., AVL List GmbH, Belcan LLC, Bertrandt AG, Capgemini Service SAS, Contechs Group Holdings Ltd., EDAG Group, EPAM Systems Inc., FEV Group GmbH, HCL Technologies Ltd., Hitachi Ltd., IAV GmbH, KPIT Technologies Ltd., L and T Technology Services Ltd., Magna International Inc., Mahindra and Mahindra Ltd., Onward Technologies Ltd., and Ricardo Plc

Key Market Trends Fueling Growth

  • Connected cars rely on Vehicle-to-Everything (V2X) communication for real-time data exchange.
  • ESPs develop communication protocols, sensor integration, and connectivity solutions to enable V2X communication, enhancing transportation safety and efficiency.
  • With increased connectivity comes higher cyber threat risks; ESPs focus on developing robust cybersecurity solutions to protect connected cars from vulnerabilities and unauthorized access.
  • Connected cars generate extensive data on driving habits, preferences, and performance, which ESPs analyze to personalize driving experiences, predict maintenance needs, and offer tailored insurance and roadside assistance services.
  • ESPs develop diagnostic tools, remote software updates, and Over-The-Air (OTA) upgrades for connected cars, creating ongoing revenue opportunities.
  • Companies like Bertrandt AG and EDAG Group offer innovative aftermarket solutions for connected vehicles.
  • As demand for connected car technologies rises, automotive ESPs remain essential partners in driving innovation and addressing evolving automotive ecosystem needs, consequently boosting market growth.

Market Challenges

• Autonomous vehicles and connected cars bring new regulations, posing uncertainties for Automotive Engineering Service Providers (ESPs). Strict safety regulations, such as data privacy and autonomous driving standards, necessitate substantial investments in understanding, interpreting, and complying. Fear of non-compliance and potential liability may hinder innovation, with ESPs hesitant to develop cutting-edge technologies due to regulatory risks. High barriers to entry, created by stringent safety testing and certification, favor larger, established providers, potentially limiting competition and market dynamism. Key areas of focus include 5G networks, electric vehicles, vehicle efficiency, collision avoidance sensors, connection sensors, lightweight vehicles, fuel efficient vehicles, electric motors, battery management systems, sensor fusion, cybersecurity, data analytics, and vehicle safety.

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Segment Overview 

This automotive engineering service providers (esp) market report extensively covers market segmentation by

  1. Application 
  • 1.1 In-house
  • 1.2 Out-source
  • Product Type
    • 2.1 Powertrain
    • 2.2 Complete vehicle
    • 2.3 Electrical/electronics
    • 2.4 Others
  • Geography 
    • 3.1 Europe
    • 3.2 APAC
    • 3.3 North America
    • 3.4 South America
    • 3.5 Middle East and Africa

    1.1 In-house- The Automotive Engineering Service Providers (ESP) Market encompasses mechanical and electrical engineering, leveraging lightweight materials and digital vehicles to enhance connectedness and software development. ESPs address cybersecurity and data analytics concerns, ensuring vehicle safety and fuel efficiency through expertise in electric motors and battery management systems. Sensor fusion engineering solutions facilitate designing, developing, fabricating, and assembling mechanical, electrical, electronics, and software elements for automobiles. ESPs cater to stringent safety regulations in the automotive engineering field, delivering improved quality, safe structured vehicles, and convenient driving experiences for models and vehicles, including commercial ones. With the advent of 5G networks, ESPs are poised to revolutionize the industry through engineering solutions for autonomous and electric vehicles. Investment pockets lie in the areas of safety elements, luxury vehicles, and the integration of advanced technologies, such as 5G networks and autonomous driving systems.

    For more information on market segmentation with geographical analysis including forecast (2024-2028) and historic data (2018 – 2022) – Download a Sample Report

    Research Analysis

    The Automotive Engineering Service Providers (ESP) market encompasses the design, development, fabrication, and integration of mechanical, electrical, and electronics elements for commercial vehicles. This includes the implementation of 5G networks and advanced technologies such as autonomous and electric vehicles. ESPs focus on enhancing vehicle efficiency through the use of lightweight materials and fuel-efficient components. Collision avoidance sensors and connection sensors are essential mechanical and electrical features that ESPs incorporate into digital and connected vehicles. Software engineering and cybersecurity are critical aspects of ESP services, ensuring data analytics and secure communication between vehicles and infrastructure. The ESP market continues to evolve, offering innovative solutions to meet the demands of the automotive industry.

    Market Research Overview

    The Automotive Engineering Services Market encompasses a diverse range of offerings, including vehicle design, development, testing, and consulting services. These solutions cater to various sectors, such as body and chassis, powertrain, electronics, and software. ESPs employ cutting-edge technologies like CAD, CAE, and CAM to create efficient, safe, and eco-friendly vehicles. They also focus on regulatory compliance, ensuring that vehicles meet stringent safety and emissions standards. Additionally, ESPs provide services related to vehicle connectivity, autonomous driving, and electric powertrains, reflecting the industry’s ongoing evolution. The market is driven by factors like increasing vehicle production, growing demand for advanced technologies, and stringent regulations.

    Table of Contents:

    1 Executive Summary
    2 Market Landscape
    3 Market Sizing
    4 Historic Market Size
    5 Five Forces Analysis
    6 Market Segmentation

    • Application
    • Product Type
      • Powertrain
      • Complete Vehicle
      • Electrical/electronics
      • Others
    • Geography
      • Europe
      • APAC
      • North America
      • South America
      • Middle East And Africa

    7 Customer Landscape
    8 Geographic Landscape
    9 Drivers, Challenges, and Trends
    10 Company Landscape
    11 Company Analysis
    12 Appendix

    About Technavio

    Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

    With over 500 specialized analysts, Technavio’s report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio’s comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

    Contacts

    Technavio Research
    Jesse Maida
    Media & Marketing Executive
    US: +1 844 364 1100
    UK: +44 203 893 3200
    Email: [email protected]
    Website: www.technavio.com/

    SOURCE Technavio

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