Automotive Contract Manufacturing Market Report 2026

The automotive contract manufacturing market size has grown strongly in recent years. It will grow from $43.96 billion in 2025 to $47.38 billion in 2026 at a compound annual growth rate (CAGR) of 7.8%. The growth in the historic period can be attributed to shift toward asset-light automotive business models, expansion of global OEM production networks, cost optimization pressures on automakers, availability of specialized contract manufacturers, increasing vehicle platform standardization.

The automotive contract manufacturing market size is expected to see strong growth in the next few years. It will grow to $63.25 billion in 2030 at a compound annual growth rate (CAGR) of 7.5%. The growth in the forecast period can be attributed to rising demand for electric and autonomous vehicles, expansion of contract manufacturing for niche vehicle segments, increasing use of digital manufacturing technologies, growing focus on speed-to-market, rising collaborations between OEMs and contract manufacturers. Major trends in the forecast period include increasing outsourcing of ev and module manufacturing, rising adoption of flexible contract manufacturing models, expansion of joint development manufacturing agreements, growing demand for scalable vehicle production capacity, integration of advanced automation in contract plants.

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 companies operating in the automotive contract manufacturing market are Magna International Inc., Valmet Automotive Group, VDL Groep, Foxconn Technology Group, AM General LLC, IWN GmbH & Co. KG, Steyr Automotive GmbH, Karmann GmbH, Heuliez Group, Nedcar B.V., Pininfarina S.p.A., Cecomp S.p.A., Multimatic Inc., Bollinger Motors Manufacturing Services, SVI Public Company Limited, Blue Solutions Manufacturing, Arrival Automotive UK Ltd, Rimac Technology, Hofer Automotive GmbH, ATP Automotive Engineering, Thaco Group.

Asia-Pacific was the largest and fastest-growing region in the automotive contract manufacturing market in 2025. The regions covered in the automotive contract manufacturing market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the automotive contract manufacturing market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, 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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