Automotive Engineering Services Outsourcing Market is Expected to Generate Huge
Posted by Vakhas on October 23rd, 2019
The global automotive engineering services outsourcing (ESO) market size is expected to reach USD 293.74 billion by 2025, according to a new report by Grand View Research, Inc. The market is estimated to expand at a CAGR of 28.4% over the forecast period. Original Equipment Manufacturers (OEMs) outsource core engineering, as well as allied, tasks to obtain highly-skilled and specialized services at a much cheaper cost. Earlier, automobile innovation was limited to R&D centers of OEMs.
However, the demand for automotive ESO services is rising significantly with growing technical capabilities of Engineering Service Providers (ESPs) to offer product innovation and automotive R&D in vehicle positioning, guidance systems, connected cars, and autonomous driving. The Asia Pacific region accounted for the largest market share in 2017 and is anticipated to continue this trend over the forecast period.
Owing to the availability of cost-effective labor in countries, such as Philippines, India, and China, major automobile OEMs are outsourcing manufacturing and allied activities to these destinations. Japan is one of the most prominent car manufacturers worldwide due to the presence of major auto manufacturers, such as Honda Motor Co., Ltd., Nissan Motor Corp., and Toyota Motor Corp. This has triggered the demand for automotive engineering services in the country, which is supporting the APAC regional growth.
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