Automotive Powertrain Testing Services Market by Type, Vehicle type, and Geography - Forecast and Analysis 2023-2027

The automotive powertrain testing services market is estimated to grow at a CAGR of 7.86% between 2022 and 2027. The size of the market is forecast to increase by USD 2,434.53 million. The growth of the market depends on serval factors, including the rise in the demanding consumer base and the government's enforcement to upgrade to newer emission norms, the rising vehicle population, and R and D and testing due to cost pressure faced by OEMs.

This report extensively covers market segmentation by type (ice powertrain and hybrid and electric powertrain) and geography (APAC, North America, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

 What will the Size of the Automotive Powertrain Testing Services Market be During the Forecast Period?

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Parent Market Analysis

Technavio categorizes the global automotive powertrain testing services market as a part of the global automotive components and accessories market within the global auto components market. The global automotive components and accessories market covers companies engaged in the production of parts and accessories for automobiles like passenger cars (PCs), electric vehicles (EVs), commercial vehicles (CVs), heavy-duty vehicles, off-road vehicles, motorcycles, scooters, quad bikes, and three-wheelers. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.

Automotive Powertrain Testing Services Market: Key Drivers, Trends, Challenges, and Customer Landscape

The rise in consumer demand and government efforts to upgrade to newer emission norms are notably driving the automotive powertrain testing services market growth, although factors such as the capital-intensive nature of testing facilities and equipment for powertrain testing may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Automotive Powertrain Testing Services Market Driver 

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.

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 testing for compliance, thereby driving the global automotive powertrain testing services market.

Key Automotive Powertrain Testing Services Market Trend

The development of computer and IT-enabled powertrain testing systems will fuel the global automotive powertrain testing services 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 testing 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. It offers 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 testing. 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.

Key Automotive Powertrain Testing Services Market Challenge

The capital-intensive nature of testing facilities and equipment for powertrain testing is a major challenge to the global automotive powertrain testing services market growth. Powertrain testing machinery and setup are considered capital-intensive. The average price of a powertrain testing machine is $500,000-$1,000,000. In addition, the setting up of a powertrain testing facility is more expensive. The test equipment is expensive and involves significant investments by testing 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 testing 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.

Key Automotive Powertrain Testing Services Market Customer Landscape

The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Automotive Powertrain Testing Services Market Customer Landscape

Who are the Major Automotive Powertrain Testing Services Market Vendors?

Vendors 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.

atsautomation.com - The company offers automotive powertrain testing services such as engine assembly and test, gear mesh test, and axel assembly and test. Also, under this segment, the company includes planning, resource allocation, capabilities building, and implementation of best practices on a global basis.

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:

• A and D Co. Ltd.
• AKKA Technologies SE
• 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

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; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.

What is the Fastest-Growing Segments in the Automotive Powertrain Testing Services Market?

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 automotive powertrain testing services market.

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The ICE powertrain segment shows a gradual increase in market share from USD 3236.76 million in 2017 and continued to grow until 2021. 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.

Which are the Key Regions for the Automotive Powertrain Testing Services Market?

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APAC is projected to contribute 60% by 2027. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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 automotive powertrain testing services 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.

However, automobile manufacturing has been recovering since 2021 due to the initiation of large-scale vaccination drives and the resumption of normal operations in the region. Various automakers are focusing on increasing production and reducing supply chain disruptions as their paramount goal after the COVID-19 outbreak is contained. Thus, it is anticipated that the uncertainty in the automotive industry may lead to slow growth of the regional market during the forecast period.

Segment Overview

The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by type, product, distribution channel, and region.

• Type Outlook ( USD Million, 2017 - 2027)
  • ICE powertrain
  • Hybrid and electric powertrain
• Vehicle Type Outlook ( USD Million, 2017 - 2027)
  • Passenger vehicle
  • Commercial vehicle
• Region Outlook ( USD Million, 2017 - 2027)
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Brazil
    • Colombia
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

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What are the Key Data Covered in this Automotive Powertrain Testing Services Market Report?

• CAGR of the market during the forecast period.
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the size of the automotive powertrain testing services market size and contribution of the market in focus to the parent market.
• Accurate predictions about upcoming trends and changes in consumer behavior.
• Growth of the automotive powertrain testing services market industry across APAC, North America, Europe, South America, and Middle East and Africa.
• Thorough analysis of the market’s competitive landscape and detailed information about vendors.
• Comprehensive analysis of factors that will challenge the growth of automotive powertrain testing services market vendors.

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