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The global automotive engineering service outsourcing market size is expected to reach USD 227.60 billion by 2030, registering a CAGR of 10.3% from 2025 to 2030, according to a new report by Grand View Research, Inc. Increasing collaborative activities between Original Equipment Manufacturers (OEMs) and Engineering Service Providers (ESPs) to achieve promising technologies for performance enhancement, self-driving, and safety assurance adjustments are the factors anticipated to propel the automotive ESO market growth.
Furthermore, the government's introduction of strict emission norms for the effective utilization of fuels is predicted to contribute to the demand for the automotive ESO market. For instance, in January 2021, the U.S. President, Joe Biden, signed an executive order that addressed the climate crisis to protect the environment and public health. The order directed the Environmental Protection Agency (EPA) to propose revising, suspending, or rescinding the earlier set standard under the "The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021–2026 Passenger Cars and Light Trucks".
The automotive ESO market has witnessed technological growth owing to the increasing demand for the shared mobility, electrification, and self-driving. Furthermore, key companies have incorporated cloud technologies into their product offerings to connect & access data and develop more autonomous products. For instance, in May 2018, Horiba, LTD.'s Smart Emissions Measurement System (SEMS) used the combination of a cloud server and a database to obtain emission data, as there was a need to develop solutions for the emission measurement to build a cleaner future.
On the other hand, key participants in the market are impacted by the regulations stressing the elimination or limitation of CO2 emissions, enhancing testing procedures, and limiting noise pollution specific to certain regions or countries. For instance, in India, the automobile industry regulations are set by various committees, such as the Central Motor Vehicle Rules-Technical Standing Committee, Standing Committee on Implementation of Emission Legislation (SCOE), and Automotive Industry Standard Committee (AISC).
Gather more insights about the market drivers, restrains and growth of the Automotive Engineering Service Outsourcing Market
Automotive Engineering Service Outsourcing Market Report Highlights
• The powertrain and after-treatment segment led the market in 2024, accounting for over 61% of the global revenue. The growth is attributed to the electrification of powertrains as a replacement for Internal Combustion Engines (ICE) fueled by petroleum and gasoline that can minimize the impact of carbon emissions on the environment.
• The infotainment & connectivity segment is predicted to foresee significant growth in the coming years. This is attributed to the emerging need among end-users to incorporate advanced digital solutions in vehicles.
• The prototyping segment accounted for the largest market revenue share in 2024. The segment growth is attributed to the increased adoption of advanced technologies, such as 3D printing technology, by the automotive industry to design a prototype of an assembly, certain parts, or a model of an entire car.
• The on-shore segment accounted for the largest market revenue share in 2024. This is attributed to the preferences of OEMs to collaborate with locally available ESPs.
• The automotive engineering service outsourcing market in the Asia Pacific dominated with a revenue share of 43.77% in 2024 and is anticipated to register the highest CAGR over the forecast period.
• The automotive ESO market has evolved to incorporate a wide range of new product development, product support, and value engineering functions across numerous verticals, including automotive, aerospace, and industrial businesses
Automotive Engineering Service Outsourcing Market Segmentation
Grand View Research has segmented the global automotive engineering service outsourcing market on the basis of on application, service, location, and region:
Automotive Engineering Service Outsourcing Application Outlook (Revenue, USD Billion, 2018 - 2030)
• Autonomous Driving/ADAS
• Body & Chassis
• Powertrain And After-treatment
• Infotainment & Connectivity
• Others
Automotive Engineering Service Outsourcing Service Outlook (Revenue, USD Billion, 2018 - 2030)
• Designing
• Prototyping
• System Integration
• Testing
• Others
Automotive Engineering Service Outsourcing Location Outlook (Revenue, USD Billion, 2018 - 2030)
• On-shore
• Off-shore
Automotive Engineering Service Outsourcing Regional Outlook (Revenue, USD Billion, 2018 - 2030)
• North America
o U.S.
o Canada
o Mexico
• Europe
o UK
o Germany
o France
• Asia Pacific
o China
o India
o Japan
o Australia
o South Korea
• Latin America
o Brazil
• MEA
o UAE
o South Africa
o KSA
Order a free sample PDF of the Automotive Engineering Service Outsourcing Market Intelligence Study, published by Grand View Research.
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