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The Global Automotive Powertrain Testing Services Market size is estimated to grow by USD 2.75 billion, at a CAGR of 8.22% between 2023 and 2028. Market growth is driven by a demanding consumer base and government mandates to adopt newer emission norms, alongside an expanding vehicle population and increased investments in R&D due to cost pressures faced by OEMs. Consumers increasingly prioritize environmentally friendly vehicles, prompting OEMs to innovate and comply with stricter emission regulations. Simultaneously, the growing vehicle population underscores the urgency of emission control measures, necessitating ongoing R&D efforts. OEMs face financial constraints but invest heavily in R&D to develop cost-effective solutions that meet regulatory standards without compromising performance. These intertwined factors drive technological advancements and market competitiveness, ensuring that OEMs meet both consumer expectations and regulatory requirements. In essence, innovation, regulatory compliance, and strategic investments are crucial for sustaining growth and driving progress in the automotive industry. The market forecast also includes an in-depth analysis of drivers, trends, and challenges.
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The market plays a crucial role in ensuring the reliability and performance of vehicle powertrains. Covering components such as transmission, clutch, and torque converter, these services encompass thorough testing of critical systems like drive shafts, propeller shafts, and axles. With a focus on various vehicle types including passenger cars and commercial trucks, testing services extend to hybrid powertrains and electric powertrains, addressing the growing demand for alternative propulsion systems. Testing facilities specialize in areas such as transmission testing and differential testing, offering comprehensive evaluations to manufacturers. As the automotive industry evolves to reduce carbon footprints and reliance on fossil fuels, testing services play a vital role in validating the performance of gasoline, diesel, and hybrid powertrains. Manufacturers rely on these services to ensure the integrity of manufacturing units and the efficiency of downsized engines, contributing to advancements in automotive technology and sustainability. Our researchers analyzed the data with 2023 as the base year and the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The rise in consumer demand and government efforts to upgrade to newer emission norms are key factors driving market growth. Government norms that mandate upgrades to better emission-compliant vehicles or newer emission norms will also drive the market for automotive powertrain testing. For instance, India, which is one of the fastest-growing vehicle markets globally, is governed by the Bharat Stage emission standards. Since 2010, Bharat stage III norms have been enforced across India, while Bharat stage IV emission norms have been in place since April 2010 in a few cities only.
Further, in 2016, the Indian government announced that the country would skip the Bharat V norms altogether and adopt the Bharat VI norms by 2020. Bharat VI is the Indian equivalent of the Euro VI emission norms for vehicles. Such pollution control emission norms may result in car owners upgrading their engines to comply with the latest emission standards. In addition, Europe implemented the Real Driving Emission (RDE) regulation in 2017. The implementation of these regulations by government bodies will need some alterations to be made to engine components and may result in the need for it for compliance, thereby driving the market.
The development of computer and IT-enabled powertrain testing systems will fuel the global Market growth. With the increasing use of Internet-based technologies, computer networking, and IT in combination with engineering expertise, advanced systems that have the potential to transform the future of powertrain trials are being developed. One such development is Ricardo's Global Test Environment (GTE), which makes the company stand apart from the rest of the companies in the market. The system employs some of the latest secure networking and Internet-based technologies to develop a remote access system that provides everything that automotive test and development engineers require when they use a powertrain test cell.
Also, they offer the ability to cross-examine test parameters, alter test conditions, monitor results, investigate problems, look around the cell, and examine individual components. The engineer can connect to the test cell from any location through his or her computer system. Aston Martin was one of the earliest adopters of this GTE technology for powertrain trials. The automaker used this technology for its Aston Martin Vantage V8 engine testing. The company witnessed a significant reduction in test development time and costs. Thus, the aforementioned developments will drive the growth of the market to focus during the forecast period.
The capital-intensive nature of testing facilities and equipment for powertrain testing is a major challenge to the market growth. Powertrain testing machinery and setup are considered capital-intensive. The average price of a powertrain trial machine is USD 500,000-USD 1,000,000. In addition, the setting up of a powertrain trial facility is more expensive. The test equipment is expensive and involves significant investments by trial service providers.
In addition, testing the entire vehicle by running it on a chassis dynamometer is essential to prove that the vehicle conforms to emission norms and the mandated power efficiencies. Therefore, the expensive nature of powertrain trials machines restrains the potential growth of the market. Hence, the capital-intensive nature of the testing facility and systems for powertrain testing is expected to be one of the major challenges for the market during the forecast period.
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The market share growth by the ICE powertrain segment will be significant during the forecast period. Governments across the globe are implementing stringent emission regulations for powertrains in ICE vehicles. This has forced automotive OEMs and Tier-1 suppliers to continuously innovate and develop their powertrain systems, thereby increasing the need for testing services. In addition, owing to the increasing concerns about emissions in the US, automobile manufacturers are trying to meet the demand for fuel efficiency set by the Corporate Average Fuel Economy (CAFE) regulation norms. Hence, the performance of the ICE powertrain has become a major factor in purchase decisions for automobile manufacturers and customers. Therefore, all these factors are responsible for the growth of the ICE powertrain segment of the global market.
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The ICE powertrain segment showed a gradual increase in market share from USD 3.57 billion in 2018. To comply with the stringent emission standards, automobile manufacturers are continuously innovating in terms of designs and technologies for ICE powertrains that reduce greenhouse gas (GHG) emissions and improve the fuel efficiency of the vehicle. Various technologies, such as variable valve timing, variable valve lifting, engine downsizing, and turbochargers, have been successfully implemented in ICE automobiles to comply with emission standards, which has increased the complexity of modern ICE powertrain systems. The increasing complexity of these powertrain systems due to the advances in technology, along with the trend of vehicle downsizing and lightweight, would increase the need for powertrain testing. The growing vehicle consumer base has given rise to the need for more automobile production facilities or expansion in such production facilities. This, in turn, is driving the need for the expansion of powertrain test facilities, thereby contributing to the growth of the market.
APAC is estimated to contribute 62% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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Promising economic growth potential in emerging economies (such as China and India) is enhancing the number of market opportunities for passenger cars, thereby attracting global automobile manufacturers to this region. While market players are investing in technology to drive innovation in engines and powertrains, players are also expanding production facilities and setting up new facilities to cater to growing regional demand and beyond. These factors are expanding the demand for automotive test equipment, which includes powertrain testing systems. China, India, Japan, and South Korea are some of the key countries in the region, with China leading the market in APAC. This is attributed to the significantly large market for passenger cars in APAC, which also serves as a hub for the automobile and automotive components manufacturing. Furthermore, significant investments in infrastructure and industrialization have fueled the growth in the number of commercial vehicles, thereby significantly increasing the need to test vehicles.
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Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the Market. One of the major companies in the market include:
ATS Automation Tooling Systems Inc.- The company offers automotive powertrain testing services such as engine assembly and test, gear mesh test, and axel assembly and test.
The report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified. Furthermore, it is also quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market forecasting report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
The market is integral to ensuring the efficiency and reliability of vehicle powertrains. Services encompass comprehensive evaluations of components such as drive shaft and propeller shafts, crucial for transmitting power from the gasoline and diesel powertrains to the driving wheels. With the automotive industry increasingly reliant on global supply chains and economic trade, testing services play a pivotal role in validating the performance of powertrain systems across various vehicle types, including passenger cars and commercial trucks. Testing facilities specialize in areas such as drive shafts testing and hybrid powertrain testing service, addressing the unique requirements of modern hybrid powertrains and electric powertrains. As manufacturers strive to enhance fuel efficiency and reduce frictional loss through technologies like turbocharging and optimizing gear ratio, powertrain testing services ensure compliance with standards and regulations while enabling continuous improvement in automotive performance and reliability. In the global supply chain, automatic transmissions, Differentials Testing, gasoline powertrains, and internal combustion engine (ICE) play pivotal roles in passenger car production, while drive shaft and propeller shaft undergo rigorous testing for driving wheels testing and electric powertrain testing, ensuring efficient performance across commercial truck.
Market Scope |
|
Report Coverage |
Details |
Page number |
172 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 8.22% |
Market Growth 2024-2028 |
USD 2.75 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
7.43 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 62% |
Key countries |
China, US, Japan, Germany, and India |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
A and D HOLON Holdings Co. Ltd., Akkodis, ATS Automation Tooling Systems Inc., AVL List GmbH, Cambustion Ltd., Cosworth Group Holdings Ltd., FEV Group GmbH, HORIBA Ltd., IAV GmbH, Industrieanlagen Betriebsgesellschaft mbH, Intertek Group Plc, IPG Automotive GmbH, MAHLE GmbH, Mtech UK Associates Ltd., Mustang Advanced Engineering, Ricardo Plc, SGS SA, TEOS Powertrain Engineering, and thyssenkrupp AG |
Market dynamics |
Parent market analysis, market research report, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Vehicle Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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