According to DataM Intelligence's Automotive Engineering Services Market Size, Share, Industry, Forecast & Outlook (2024-2031) report, there has been a significant shift in the way cars are developed, tested, and sold. The need for specialized engineering services is growing quickly among OEMs, Tier-1 suppliers, and engineering providers due to the rise in EVs, autonomous driving, software-defined architectures, and tighter safety and emissions regulations.

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Key Highlights & Insights

• The market covers services including vehicle design & development, powertrain engineering, ADAS/AV engineering, embedded software development, testing & validation, simulation, digital twin modeling, functional safety, cybersecurity, etc.
  
  

• Major growth is driven by electrification (EV and hybrid powertrains), increasing complexity from connected/autonomous/ software-defined vehicles, regulatory pressures for emissions & safety, and OEM decisions to outsource more of their engineering workloads.
  
  

• Geographically, Asia-Pacific is emerging as a fast-growing region due to rising vehicle production, increasing R&D investment, and growing EV adoption. North America and Europe remain key in innovation, regulation, and advanced tech adoption.
  
  

Recent Developments 2025

• Several major collaborations in 2025 are accelerating engineering service offerings: Volvo Cars appointed HCLTech as a strategic engineering services partner to provide end-to-end solutions, including leveraging global delivery centers and focusing on digital services and product lifecycle management.
  
  

• L&T Technology Services (LTTS) formed a strategic partnership with thyssenkrupp Steering to launch a global software hub based in Pune, India. This hub will focus on embedded systems, functional safety, and cybersecurity solutions for modern, connected vehicles. 

• Hinduja Tech acquired TECOSIM Group in 2025 to strengthen its capabilities in virtual validation and body engineering expertise, enhancing its global footprint in advanced automotive engineering services.
  
  

• Demand in 2025 shows that a large share of engineering projects—about 35% in certain markets—are now focused on battery management systems, ADAS, and safety-critical software validation, reflecting a shift in priority among OEMs.
  
  

Strategic Outlook

To stay competitive, engineering service providers, OEMs, and investors should consider these strategic action areas:

1. Accelerate development of engineering capabilities in software, connectivity, and safety systems, including embedded control, cybersecurity, OTA updates, and ADAS/AV validation.
   
   

2. Expand partnerships and geographic presence—especially in fast-growing regions like Asia-Pacific—to tap into cost-effective talent, growing demand, and government incentives.
   
   

3. Embrace simulation, digital twins, and hardware-in-the-loop (HIL) testing and validation to reduce prototyping time, lower costs, and speed up time-to-market.
   
   

4. Invest in sustainability and EV/hybrid powertrain engineering to meet upcoming emission standards and consumer expectations.
   
   

5. Focus on modular engineering architectures to manage increasingly complex vehicle systems, including mixed propulsion systems, software-defined components, and vehicle connectivity.
   
   

Conclusion

The market for low-frequency sound-absorbing insulation materials may not be the highest growth sector in acoustics, but it is steadily becoming more important. As automotive, marine, aerospace, and built environment users demand quieter, more comfortable spaces—and as regulations around noise tighten—suppliers who innovate in material science, design, and performance will be well rewarded. Asia-Pacific’s rising influence, North America’s strong current base, and Europe’s regulatory and premium segment leadership will define the competitive landscape into 2031.

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