Automotive Engineering Service Provider Market Report 2026

The automotive engineering service provider market size has grown strongly in recent years. It will grow from $173.72 billion in 2025 to $186.84 billion in 2026 at a compound annual growth rate (CAGR) of 7.5%. The growth in the historic period can be attributed to vehicle platform complexity, rising r&d costs, demand for faster time-to-market, emission regulation compliance, growth of global oem programs.

The automotive engineering service provider market size is expected to see strong growth in the next few years. It will grow to $244.03 billion in 2030 at a compound annual growth rate (CAGR) of 6.9%. The growth in the forecast period can be attributed to electric and autonomous vehicle development, software-centric vehicle architectures, cost optimization pressure, demand for digital engineering, sustainability-driven vehicle design. Major trends in the forecast period include outsourcing of vehicle engineering activities, growth of ev engineering services, expansion of software-defined vehicle development, demand for regulatory compliance support, integration of autonomous technologies.

The rising adoption of autonomous vehicles is expected to drive the growth of the automotive engineering service provider market going forward. Autonomous vehicles are self-driving cars equipped with sensors and artificial intelligence software that enable them to navigate and operate without human intervention. The increasing adoption of autonomous vehicles is primarily driven by rapid urbanization, as growing urban populations experience higher traffic congestion and transportation challenges that demand more efficient and sustainable mobility solutions. Autonomous vehicles require specialized engineering services, including software development, sensor integration, testing protocols, and continuous technical support throughout their lifecycle. For instance, in December 2024, according to the National Highway Traffic Safety Administration, a U.S.-based government agency, by 2030, an estimated 4.5 million self-driving vehicles are expected to operate on U.S. roads. Therefore, the rising adoption of autonomous vehicles is driving the growth of the automotive engineering service provider market.

Major companies in the automotive engineering service provider market are concentrating on advancing connected service technology to better serve their customers. Connected service technology enables vehicles to connect to the internet and cloud-based services, facilitating remote monitoring, control, and access to vehicle data and functions via mobile apps and digital platforms. For instance, in June 2024, Tata Elxsi partnered with Red Hat, Inc. to expedite application mobility in a multi-cloud network for 5G-connected vehicles. This collaboration aims to accelerate 5G connected vehicle applications using Tata Elxsi's Connected Vehicle Platform (CVP) named TETHER and Red Hat In-Vehicle OS. By leveraging Red Hat OpenShift as a unified container-as-a-service (CaaS) layer across multi-cloud environments and Tata Elxsi's Neuron platform for cloud automation and 5G application modernization, the partnership seeks to enable telecom operators and mobile virtual network operators (MVNOs) to monetize their networks effectively.

In July 2023, HCL Technologies Limited acquired ASAP Group for $271.1 million as part of its strategic expansion in the automotive engineering services market, particularly in Europe. ASAP Group, based in the UK, specializes in providing automotive engineering services.

Major companies operating in the automotive engineering service provider market report include AVL LIST GmbH, FEV GmbH, EDAG Engineering GmbH, IAV GmbH, Bertrandt AG, ARRK Product Development Group, Ricardo Plc, Altair Engineering Inc., Semcon, P3 Automotive GmbH, Alten Group, Capgemini Technology Services Limited, HCL Technologies Limited, Tech Mahindra Limited, Tata Technologies Limited, L&T Technology Services Limited, KPIT Technologies Limited, Intertek Group plc, HORIBA Ltd., TÜV SÜD, RLE International.

North America was the largest region in the automotive engineering service provider market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the automotive engineering service provider market report include Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the automotive engineering service provider market report include Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The automotive engineering service provider market includes revenues earned by entities by providing services such as manufacturing engineering, autonomous driving technology, vehicle safety engineering, and emissions testing and compliance. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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