Automotive Engineering Services Market Outlook - Forecast Trends, Market Size, Share and Growth Analysis Report (2025-2034)

The global automotive engineering services market attained a value of USD 246.17 Billion in 2024. The industry is further expected to grow at a CAGR of 12.10% in the forecast period of 2025-2034. The industry is projected to reach a value of USD 771.42 Billion in 2034 owing to the rising demand and technological advancements in the automotive industry.

Key Trends and Developments

The automotive engineering services market is growing due to increasing demand for electric vehicle integration, the development of autonomous vehicles, connected vehicle technology, as well as the use of lightweight materials and a focus on fuel efficiency.

January 2025

At CES 2025, Microsoft highlighted the rapid advancements in automotive, mobility, and manufacturing driven by AI and software. They showcased AI-driven innovations like software-defined vehicles, autonomous driving, and connected in-vehicle experiences. Microsoft’s Azure platform helped accelerate vehicle development, enhance factory efficiency, improve supply chains, and elevate customer experiences.

January 2025

Honda announced its next-gen electric vehicles (EVs) at CES 2025, set to launch in North America by 2026. Built on an advanced battery platform, these models feature ultra-thin batteries offering rapid charging in 10-15 minutes. Equipped with AI and Level 3 autonomous driving, they promise a futuristic driving experience, blending innovation and sustainability.

December 2023

L&T Technology Services (LTTS) used Amazon Web Services (AWS) to speed up the transition to Software Defined Vehicles (SDVs). By leveraging generative AI, LTTS accelerated the development of smart automotive applications, reducing product launch time by 25%. Additionally, they initiated a training program to upskill 1,000 engineers globally.

April 2023

Magna announced a contract to engineer and manufacture INEOS Automotive's new electric off-road vehicle, with production set for 2026 in Graz, Austria. This addition strengthens Magna’s role as a leading multi-OEM manufacturer, further expanding its expertise and partnership with INEOS, following their previous work on the Grenadier.

Electric Vehicle Integration is a Key Trend in the Automotive Engineering Services Market

The integration of electric vehicles (EVs) is significantly reshaping the automotive engineering services sector. Engineers are focused on advancing battery technology, drivetrains, and charging infrastructure to meet the growing demand for sustainable and eco-friendly solutions. As manufacturers respond to stricter environmental regulations, there is increasing demand for EV-specific design and testing services. The National Electric Vehicle Strategy (2023-2024) highlighted that EV sales reached 9.4% of new vehicle sales by April 2024, showing a steady rise from 8.4% in 2023.

Developments of Autonomous Vehicles are Boosting the Demand of the Automotive Engineering Services Market

The rise of autonomous vehicles (AVs) is driving significant changes in the automotive engineering services market. The integration of advanced driver-assistance systems (ADAS), artificial intelligence (AI), and machine learning has accelerated the need for software development, sensor calibration, and rigorous safety testing. Engineers are working to enhance the safety and reliability of AVs for mainstream adoption. In February 2025, Ush, in partnership with Poppy Mobility, launched a commercial remote-driving car service in Belgium, marking a milestone for AV technology in Europe.

Connected Vehicle Technology is Shaping the Automotive Engineering Services Market Growth

Connected vehicle technology is revolutionising the automotive engineering services sector. Real-time data collection, cloud computing, and vehicle-to-everything (V2X) communication are enhancing both driving experiences and safety. Services related to cybersecurity, data integration, and over-the-air software updates are becoming increasingly vital as automakers strive for smarter, connected systems. To support this shift, ISG initiated a research study to assess technology providers in the global automotive market, focusing on digital transformation, innovation, and the transition to electric and autonomous vehicles.

Lightweight Materials and Fuel Efficiency is Impacting the Automotive Engineering Services Market Revenue

The automotive industry’s shift towards lightweight materials such as carbon fibre, aluminium, and advanced composites is enhancing fuel efficiency and vehicle performance. Automotive engineers are working to design lighter yet stronger vehicles, maintaining safety standards while reducing weight. This trend is creating increased demand for innovation in materials and manufacturing processes. In November 2024, Suzuki Motor Corporation and Tata Elxsi inaugurated the 'SUZUKI-TATA ELXSI Offshore Development Center' in Pune, India, focusing on lightweight designs and sustainable mobility innovations to further drive green advancements in the automotive sector.

Global Automotive Engineering Services Market Segmentation

Automotive Engineering Services Market Report and Forecast 2025-2034 offers a detailed analysis of the market based on the following segments:

Market Breakup by Service Type

• Designing
• Prototyping
• System Integration
• Testing

Market Breakup by Application

• Adas & Safety
• Electrical, Electronics, And Body Controls
• Chassis
• Connectivity Services
• Interior, Exterior, And Body Engineering
• Powertrain And Exhaust
• Simulation
• Others

Market Breakup by Location

• In-House
• Outsource

Market Breakup by Vehicle Type

• Passenger Car
• Commercial Vehicle

Market Breakup by Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa

Global Automotive Engineering Services Market Analysis

The global automotive engineering services industry is being driven by the growing investment and technological advancements by the companies. The rising demand for emission less transportation, advanced safety measures, and comfort are propelling the industry growth. The rising urbanisation and growing population in the developing economies like India are further fuelling the demand growth for the industry. Europe is expected to be the leading market due to the rising demand for low emission vehicle in the region and Germany being home to major car manufacturers.

Competitive Landscape

The automotive engineering services market key players offer connected products and solutions for the automotive, consumer, and enterprise sectors. Specialising in infotainment, audio systems, and connected car technology, these companies provide innovative solutions that enhance user experiences. They assist clients in navigating digital transformation by offering services in cloud computing, IT consulting, and data analytics, driving innovation and improving efficiency across various industries.

Harman International Industries, Inc.

Headquartered in Connecticut, United States, Harman International, established in 1980, is a leading global provider of connected products and solutions for automotive, consumer, and enterprise markets. Specialising in infotainment, audio systems, and connected car technology, the company delivers innovative solutions to enhance user experiences through cutting-edge technology.

Capgemini Services SAS

Capgemini Services, founded in 1967 and headquartered in Paris, France, is a multinational leader in consulting, technology services, and digital transformation. The company helps clients navigate the complexities of digital change by offering services in cloud computing, IT consulting, and data analytics, driving innovation and efficiency across industries.

Bertrandt AG

Bertrandt AG, headquartered in Ehningen, Germany, was founded in 1974. Specialising in engineering services for the automotive, aerospace, and industrial sectors, Bertrandt offers innovative solutions in design, development, and testing. The company focuses on providing technical expertise to support clients in developing cutting-edge products and technologies.

L&T Technology Services Limited

L&T Technology Services (LTTS), established in 2012 and headquartered in Vadodara, India, is a global leader in engineering and technology services. Providing solutions across various industries, including automotive, aerospace, and telecom, LTTS focuses on digital transformation, product engineering, and R&D services, helping clients optimise operations through innovation.

Other key players in the automotive engineering services market report are Fev Group Gmbh, Akka Technologies SE, HCL Technologies Limited, Ingenieurgesellschaft Auto und Verkehr GmbH (IAV GmbH), Tech Mahindra Limited, CRESTTEK LLC, IAV Automotive Engineering, and Altran Technologies, among others.