Thanks to the rapidly growing Automotive ecosystem, the total Automotive ER&D spend is expected to reach USD 212 Bn by 2025, climbing at 5% YoY from just USD 166 Bn in 2020.
The rise of modern technologies, emerging markets across the globe, sustainability policies, and shifting consumer preferences are pushing Carmakers to innovate and design solutions most relevant in 2022.
The modern Automotive players are largely focusing on E-Mobility, and Autonomous cars but this ecosystem has a certain depth to it with many subgroups that need adequate attention.
These are the focus areas that can prove to be transformational for service providers willing to leverage the rapid movements of this ever-growing industry.
In this whitepaper, we will explore how service providers can power-up their efforts by targeting the correct Automotive segments to approach. We will also look at factors affecting the market and the global outsourcing footprint for a deeper understanding of the market dynamics.
Factors Affecting the Automotive ER&D Market
Due to a rise in investments and attention on modern innovations, the global Automotive market is at the cusp of a technological revolution and there are a variety of factors affecting it right now.
Robotic Process Automation (RPA) : The advent of AI in the assembly lines has streamlined vehicle production, making the manufacturing process more productive and efficient.
Low Preference for Diesel Cars: Rise in fuel prices, taxation charges and concerns about Air quality have led to a significant decrease in diesel vehicle sales.
Feature Enhancements: OEMs are focusing on introducing and enhancing vehicle features driven by notably higher demand for safety & security along with seamless connectivity.
COVID-19 Impact: The immediate and unfortunate hit of the pandemic disrupted export of parts, large-scale manufacturing and closure of assembly plants across the globe.
Electrification: Carbon neutrality and e-mobility solutions are emerging as trends governing the Automotive market in 2022. This is resulting in a conscious move towards electrification.
Autonomous Cars: Evolving customer preferences are pushing the carmakers to enhance focus on the software layer to enable autonomous and ADAS capabilities.
Global Technology Workforce Footprint
Even though the expanse of this industry is global, a majority of its technology workforce comes from the Asia-Pacific region. If we look at the data, it indicates 14% of the technology workforce comes from the Americas, 21% from EMA and 65% is centred in APAC.
In the APAC region, India, which includes Bengaluru, Pune, Chennai and NCR and China, which includes the Beijing area are the major locations in focus.
Paris, France, Munich Area, Germany, and United Kingdom continue to dominate the EMEA region as significant locations for Automotive growth.
Outsourcing Engagement : An Overview
The traditional Automotive industry has undergone a massive transformation as a result of the emergence of powerful technologies and technology providers playing a critical role.
Currently, service providers including TCS, Capgemini, HCL, Infosys and Tech Mahindra are contributing enormously to the outsourcing engagements for the Automotive industry.
This service group is focused on a variety of sub-verticals including:
- Product Engineering Services (38%)
- Consulting & System Integration (24%)
- Application Development & Maintenance (14%)
- Infrastructure Management Services (13%)
- Reporting & Analytics (7%)
- Digital Services (4%)
These sub-verticals are being infused with emerging technologies and ideas that are powering the next-generation of Automotive innovations. This is resulting in the rise of Autonomous Driving Systems, E-Mobility Charging Solutions, In-Vehicle Infotainment Solutions and more such concepts.
Service Provider Opportunities
The Automotive market is poised with opportunities that service providers can leverage to help the industry transition to the new era of innovation. Most opportunities, identified by the Draup Braindesk, are segmented into timelines that service providers have to target their efforts on. Let us explore these opportunities.
Short-term Opportunities:
- Automated Emergency Braking
- 3D Printed Auto Components
- In-Car Voice Assistance
Medium-term Opportunities:
- Automotive Cybersecurity
- Vehicle Collision Avoidance
- Emission Reduction
Long-term Opportunities:
- Autonomous Driving
- Connected Cars
- Battery Management Systems
Technologies such as Artificial Intelligence/Machine Learning, Cloud, Big Data, Augmented Reality/Virtual Reality, Internet of Things are at the forefront of most innovations and service providers adept with these can leverage the emerging market trends.
By using Sales Intelligence platforms such as Draup for Sales, service providers can identify niche outsourcing opportunities before they become mainstream.
Draup leverages data from over 4000+ sources which is then fed to our custom machine learning models that extract actionable insights for sales leaders across domains.
Download the Report to gain a comprehensive view of the Automotive ecosystem and detailed insights on service provider opportunities.
