Automotive Contract Manufacturing Global Market Report 2025

Automotive contract manufacturing is a business model in which a company outsources the production of vehicles or automotive components to a specialized manufacturer. It enables automakers to utilize external expertise, advanced technologies, and scalable production capabilities without maintaining complete in-house facilities. This approach enhances efficiency, reduces costs, and accelerates the delivery of high-quality automotive products to the market.

The primary types of automotive contract manufacturing services are complete vehicle manufacturing, component or module manufacturing, and design and engineering services. Complete vehicle manufacturing refers to producing fully assembled vehicles, integrating all components, modules, and systems into a finished product. Various contract types include build-to-print (BTP), build-to-specification (BTS), and joint development manufacturing (JDM), and they are applied for two-wheelers, passenger cars, commercial vehicles, and construction and agricultural vehicles. It serves various end uses, including original equipment manufacturers (OEM) and aftermarket.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The swift increase in U.S. tariffs and the ensuing trade tensions in spring 2025 are significantly affecting the machinery sector by increasing costs for steel, hydraulic systems, and precision bearings critical components often imported from tariff-affected regions. Manufacturers of construction, agricultural, and industrial machinery now face squeezed margins, as many long-term contracts prevent immediate price adjustments. The uncertainty has also delayed investment in automation and smart machinery technologies, slowing productivity gains. To adapt, firms are accelerating local supplier development, redesigning products to use alternative materials, and leveraging predictive maintenance to extend equipment lifespans amid higher replacement costs.

The automotive contract manufacturing market research report is one of a series of new reports that provides automotive contract manufacturing market statistics, including automotive contract manufacturing industry global market size, regional shares, competitors with a automotive contract manufacturing market share, detailed automotive contract manufacturing market segments, market trends and opportunities, and any further data you may need to thrive in the automotive contract manufacturing industry. This automotive contract manufacturing market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The automotive contract manufacturing market size has grown strongly in recent years. It will grow from $40.73 billion in 2024 to $43.96 billion in 2025 at a compound annual growth rate (CAGR) of 7.9%. The growth in the historic period can be attributed to increasing adoption of modular vehicle platforms, rising demand for cost-efficient manufacturing, growing outsourcing of production processes, increasing focus on quality and compliance standards, and rising labor productivity in contract manufacturing.

The automotive contract manufacturing market size is expected to see strong growth in the next few years. It will grow to $58.9 billion in 2029 at a compound annual growth rate (CAGR) of 7.6%. The growth in the forecast period can be attributed to growing demand for electric vehicle production, increasing preference for flexible manufacturing solutions, rising need for rapid prototyping services, increasing demand for autonomous vehicle components, and growing focus on advanced assembly technologies. Key trends in the forecast period include technological advancements in robotics and automation, developments in digital twin and simulation software, investment in research and development of smart manufacturing, innovation in connected vehicle manufacturing processes, and adoption of sustainable and green manufacturing practices.

The increasing demand for electric vehicles is expected to propel the growth of the automotive contract manufacturing market going forward. Electric vehicles are zero-emission vehicles that reduce reliance on fossil fuels, lower operating costs, and require less maintenance compared to conventional vehicles. The demand for electric vehicles is rising as consumers and businesses increasingly prefer environmentally friendly transportation solutions and seek long-term cost savings. Automotive contract manufacturing supports EVs by enabling manufacturers to expand production rapidly without significant investments in new facilities, reducing costs and accelerating time-to-market. For instance, in December 2023, according to the European Environment Agency, a Europe-based government organization, the share of electric vehicles in new registrations rose to 22.7% for cars and 7.7% for vans, up from 19% for cars and 6% for vans in 2022. Therefore, the increasing demand for electric vehicles is driving the growth of the automotive contract manufacturing market.

Major companies operating in the automotive contract manufacturing market are focusing on leveraging semi-knock-down (SKD) assembly to enhance production flexibility and localization of EV manufacturing. Semi-knock-down (SKD) assembly involves importing partially assembled vehicle kits that are completed at local facilities, helping manufacturers reduce logistics costs, comply with regional regulations, and accelerate market entry. For instance, in September 2025, Magna International, an Austria-based automotive contract manufacturer, commenced contract assembly of XPENG’s G6 and G9 electric SUVs at its Graz facility. The production uses SKD kits shipped from China, enabling XPENG to optimize costs, shorten lead times, and comply with EU regulatory and tariff standards. The Graz facility’s advanced manufacturing capabilities, flexible production lines, and high-quality standards make it a strategic location for scaling XPENG’s EV operations in Europe.

In January 2025, American Axle & Manufacturing (AAM), a US-based provider of automotive driveline and drivetrain components, acquired Dowlais Group plc for $1.44 billion. Through this acquisition, American Axle & Manufacturing (AAM) aims to expand its powertrain-agnostic product portfolio, integrate advanced additive manufacturing and metal-forming capabilities, and strengthen its position in the evolving global automotive market. Dowlais Group plc is a UK-based automotive contract manufacturing service.

Major players in the automotive contract manufacturing market are Foxconn Technology Group, Continental AG, Magna International, Aisin Seiki, Jabil Inc., Benteler International AG, Ficosa International, Kautex Textron, VDL Groep, Valmet Automotive Group, SVI Public Company Limited, AM General LLC, Astro Machine Works Inc., Edison Manufacturing & Engineering Inc., Brabus Automotive GmbH, Alchemy MFG LLC, Bunty LLC, HANA Technologies Inc., Machinemaze, Solidify Manufacturing, and IWN GmbH & Co. KG.

Asia-Pacific was the largest and fastest-growing region in the automotive contract manufacturing market in 2024. The regions covered in automotive contract manufacturing report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the automotive contract manufacturing market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The automotive contract manufacturing market includes revenues earned by entities by providing services such as prototype development, plastic injection molding, powertrain assembly, quality testing, and fabrication. 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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