Automotive TIC Market: Key Opportunities and Challenges

The global automotive TIC market is expected to grow from USD 16.5 billion in 2020 to USD 20.4 billion by 2025; it is expected to grow at a CAGR of 4.3%. The growth of this market can be attributed to the increasing automobile production in emerging economies, growing inclination toward outsourcing TIC services, rising focus of governments to impose strict regulatory standards on the automotive industry, surging adoption of automotive electronics to maintain passenger and vehicle safety, augmenting awareness among consumers regarding product quality and safety, and increasing instances of vehicle recalls due to component failures.

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COVID-19 Impact on Automotive TIC Market

Due to the spread of the Coronavirus, manufacturing units around the world have been shut down, footfall in showrooms has fallen sharply, and vehicle sales have taken a huge hit. Major automotive players such as Fiat Chrysler Automobiles, Ford, PSA Group, Volkswagen, Ducati, Tesla, BMW, Rolls-Royce, General Motors are among the global automotive manufacturers who have suspended their production due to the COVID-19 pandemic. With economic and industrial activity largely put on hold, it is expected that there will be a severe demand-side impact leading to a sharp decline in vehicle sales volumes. The scenario is expected to affect the market, as the growth of this is directly related to the production of vehicles. However, COVID-19 is accelerating the trend trend of digitalization in the automotive TIC market. Automotive TIC companies are now relying on software solutions to conduct audits, damage assessments, and certifications. For instance, Bureau Veritas has launched specialized digital tools for a variety of sectors to support remote operations.

Market for outsourced TIC services offered for electrical systems and components is expected to grow at higher CAGR during forecast period

Performance testing of electric and electronic automotive components includes climate testing, mechanical testing, vibration testing, electrical testing, durability testing, and EMC testing. Electrical systems and components in the automotive industry are subject to tests related to electrical parametric testing, such as power distribution and environmental performance testing of vehicles, including tensile, stress, volatility, and flammability test, as well as mechanical performance testing including vibrations, stress, fatigue, and mechanical shock. EMC testing or electric and RF testing help improve the safety of electric and electronic devices used in electric vehicles. Automotive EMC testing services include radiated emission test, conducted emission test, conducted transient emission test, electrostatic discharge test, radiated immunity test (bulk current injection), radiated immunity test, and conducted transient immunity test, and voltage variations test.

US is major market for periodical technical inspection services in North America

The North American market has been segmented into the US, Canada, and Mexico. In the US, vehicle inspection rules vary according to the state. Some states such as Delaware, District of Columbia, North Carolina, and Hawaii require annual inspection for commercial vehicles and cars and biennial inspection for passenger vehicles to test the roadworthiness and safety of on-road vehicles, while Maryland requires an inspection prior to the registration or transfer of ownership only. The Department of Land Transport has made it mandatory that all the registered vehicles must be periodically tested and inspected to ensure roadway safety and comply with traffic safety regulations. For example, in the US, passenger cars need to be inspected biennial after registration, and commercial vehicles are required to pass an annual inspection after vehicle registration.

Europe to continue to hold largest market share of automotive TIC market during forecast period

The automotive TIC market in Europe has been further segmented into Germany, France, the UK, Italy, Spain, and Rest of Europe (RoE). Major TIC companies have their headquarters in Europe, and most of the companies generate their revenues through APAC and European countries. According to a European Commission report (2016), there are about 180 automobile facilities across the EU. Consistent development of vehicle-to-vehicle, vehicle-to-infrastructure, and in-vehicle entertainment technologies is expected to drive the studied market during the forecast period. Europe is an important hub for the automotive sector owing to the presence of major automobile manufacturing companies such as Robert Bosch GmbH (Germany), Volkswagen AG (Germany), and Daimler AG (Germany). However, the outbreak of COVID-19 has significantly affected the automotive sector of Europe.

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Key Market Players

Key players operating in the automotive TIC market are DEKRA SE (DEKRA) (Germany), TÜV SÜD Group (TÜV SÜD) (Germany), Applus Services S.A. (Applus+) (Spain), SGS Group (SGS) (Switzerland), TÜV Nord Group (TÜV Nord) (Germany), TÜV Rheinland Group (TÜV Rheinland) (Germany), Bureau Veritas S.A. (Bureau Veritas) (France), Intertek Group PLC (Intertek) (UK), Eurofins Scientific (Eurofins) (Luxembourg), Element Materials Technology (Element) (UK), Lloyd’s Register Group Limited (Lloyd’s) (UK), and MISTRAS Group, Inc. (MISTRAS) (US).

COVID-19 impact on the Automotive TIC Market

According to the new market research report "Automotive TIC Market with COVID-19 impact by Service (Testing, Inspection, Certification), Sourcing, Application (Vehicle Inspection, Electrical & Components), and Geography; Periodic Technical Inspection Market by Region - Global Forecast to 2025", published by MarketsandMarkets™, the Automotive TIC Market is expected to grow from USD 16.5 billion in 2020 to USD 20.4 billion by 2025, at a CAGR of 4.3%.

The growth of the automotive TIC market can be attributed to the increasing automobile production in emerging economies, growing inclination toward outsourcing TIC services, rising focus of governments to impose strict regulatory standards on the automotive industry, surging adoption of automotive electronics to maintain passenger and vehicle safety, augmenting awareness among consumers regarding product quality and safety, and increasing instances of vehicle recalls due to component failures. The market penetration of the automotive TIC market is also analyzed for both pre-and post-COVID-19 scenarios.

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Vehicle inspection services to account for largest size of automotive inspection market, by application, during forecast period

Vehicle inspection services (VIS) are offered by automotive TIC companies. It is a technical inspection service provided by TIC companies for commercial vehicles (commercial van and truck fleets; heavy and mid-duty trucks; tractors; trailers; construction equipment; forklifts) and passenger vehicles (cars, motorcycles, pick-up trucks, boats and recreational trailers, all-terrain vehicles (ATVs), and recreational vehicles (RVs)). VIS services should ideally follow national/international regulatory standards for environmental protection. These services are also applicable to imported and used vehicles. Used vehicle inspection is another innovative approach that can be employed if a vehicle is returned with damage beyond expectations (excessive wear and tear), which drastically impacts its resale value. Vehicle inspection offers an autonomous and undisputable calculation of each returned vehicle's value so that the customer can claim the cost of repairs or check the difference between the resale and market values. It is verified by the Vehicle Inspection Management System (VIMS), which takes the entire inspection process into consideration and provides a detailed cost analysis of every fault in the car.

In-house automotive TIC service market for electric vehicles, hybrid electric vehicles, and battery systems is expected to grow at highest CAGR during forecast period

In automotive applications, in-house testing for electronic control units (ECUs) and other core components is done by automakers at their manufacturing facilities. They are collaborating with public bodies and organizations including customs, competition authorities, and industrial health and safety authorities for conducting activities related to quality control and assurance.  The market for electric vehicles is rapidly growing owing to factors such as increasing urbanization, growing demand for global hybrid vehicles, rising car sales in emerging markets, surging demand for air-conditioning systems with improved efficiency, and declining battery prices. Electric and hybrid electric vehicles largely depend on their batteries, which act as energy storage systems. The performance and safety check of such batteries is, therefore, crucial, which requires comprehensive battery testing services such as battery life cycle testing, battery abuse testing, battery performance testing, and battery environmental testing/battery durability testing.

Browse in-depth TOC on "Automotive TIC Market"
182 – Tables
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US held the largest share of North American automotive TIC market in 2019

According to the American Automotive Policy Council, automakers and their suppliers are the largest contributors to the automotive TIC market in the US, representing around 3% of the GDP. They are also one of the largest exporters of vehicles and parts; in the past 5 years, the country exported vehicles and parts that are worth over USD 692 billion in the past 5 years. The US offers an ideal environment for innovation that has facilitated massive advancements in the automotive sector. The US is an undisputed world leader when it comes to innovation, manufacturing, and marketing in the automotive sector. According to the Organisation Internationale des Constructeurs dAutomobiles (OICA), as of 2018, the US accounted for almost 11.8% of the total automotive production worldwide (with 11,314,705 units). The US also has a highly-skilled workforce in the automotive industry. MISTRAS Group Inc. and UL LLC are the TIC companies based in the US.

Key players operating in the automotive TIC market are DEKRA SE (DEKRA) (Germany), TÜV SÜD Group (TÜV SÜD) (Germany), Applus Services S.A. (Applus+) (Spain), SGS Group (SGS) (Switzerland), TÜV Nord Group (TÜV Nord) (Germany), TÜV Rheinland Group (TÜV Rheinland) (Germany), Bureau Veritas S.A. (Bureau Veritas) (France), Intertek Group PLC (Intertek) (UK), Eurofins Scientific (Eurofins) (Luxembourg), Element Materials Technology (Element) (UK), Lloyd's Register Group Limited (Lloyd's) (UK), and MISTRAS Group, Inc. (MISTRAS) (US).

What are the key trends prevalent in the automotive TIC market?

The Automotive TIC Market is expected to grow from USD 16.9 billion in 2019 to USD 22.1 billion by 2024, at a CAGR of 5.5%. The growth of the automotive TIC market can be attributed to the increasing automobile production in emerging economies, growing inclination toward outsourcing TIC services, rising focus of governments to impose strict regulatory standards on the automotive industry, surging adoption of automotive electronics to maintain passenger and vehicle safety, augmenting awareness among consumers regarding product quality and safety, and increasing instances of vehicle recalls due to component failures.

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Vehicle inspection services to account for largest size of automotive inspection market, by application, during forecast period

Vehicle inspection services (VIS) are offered by automotive TIC companies. It is a technical inspection service provided by TIC companies for commercial vehicles (commercial van and truck fleets; heavy and mid-duty trucks; tractors; trailers; construction equipment; forklifts) and passenger vehicles (cars, motorcycles, pick-up trucks, boats and recreational trailers, all-terrain vehicles (ATVs), and recreational vehicles (RVs)). VIS services should ideally follow national/international regulatory standards for environmental protection. These services are also applicable to imported and used vehicles. Used vehicle inspection is another innovative approach that can be employed if a vehicle is returned with damage beyond expectations (excessive wear and tear), which drastically impacts its resale value. Vehicle inspection offers an autonomous and undisputable calculation of each returned vehicle’s value so that the customer can claim the cost of repairs or check the difference between the resale and market values. It is verified by the Vehicle Inspection Management System (VIMS), which takes the entire inspection process into consideration and provides a detailed cost analysis of every fault in the car.

In-house automotive TIC service market for electric vehicles, hybrid electric vehicles, and battery systems is expected to grow at highest CAGR during forecast period

In automotive applications, in-house testing for electronic control units (ECUs) and other core components is done by automakers at their manufacturing facilities. They are collaborating with public bodies and organizations including customs, competition authorities, and industrial health and safety authorities for conducting activities related to quality control and assurance.  The market for electric vehicles is rapidly growing owing to factors such as increasing urbanization, growing demand for global hybrid vehicles, rising car sales in emerging markets, surging demand for air-conditioning systems with improved efficiency, and declining battery prices. Electric and hybrid electric vehicles largely depend on their batteries, which act as energy storage systems. The performance and safety check of such batteries is, therefore, crucial, which requires comprehensive battery testing services such as battery life cycle testing, battery abuse testing, battery performance testing, and battery environmental testing/battery durability testing.

US held the largest share of North American automotive TIC market in 2018

According to the American Automotive Policy Council, automakers and their suppliers are the largest contributors to the automotive TIC market in the US, representing around 3% of the GDP. They are also one of the largest exporters of vehicles and parts; in the past 5 years, the country exported vehicles and parts that are worth over USD 692 billion in the past 5 years. The US offers an ideal environment for innovation that has facilitated massive advancements in the automotive sector. The US is an undisputed world leader when it comes to innovation, manufacturing, and marketing in the automotive sector. According to the Organisation Internationale des Constructeurs dAutomobiles (OICA), as of 2018, the US accounted for almost 11.8% of the total automotive production worldwide (with 11,314,705 units). The US also has a highly-skilled workforce in the automotive industry. MISTRAS Group Inc. and UL LLC are the TIC companies based in the US.

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Key players operating in the automotive TIC market are DEKRA SE (DEKRA) (Germany), TÜV SÜD Group (TÜV SÜD) (Germany), Applus Services S.A. (Applus+) (Spain), SGS Group (SGS) (Switzerland), TÜV Nord Group (TÜV Nord) (Germany), TÜV Rheinland Group (TÜV Rheinland) (Germany), Bureau Veritas S.A. (Bureau Veritas) (France), Intertek Group PLC (Intertek) (UK), Eurofins Scientific (Eurofins) (Luxembourg), Element Materials Technology (Element) (UK), Lloyd’s Register Group Limited (Lloyd’s) (UK), and MISTRAS Group, Inc. (MISTRAS) (US).

Opportunities and Challenges in Automotive TIC Market

The automotive industry is transforming at a faster rate owing to the development of cutting-edge technologies and stringent environmental regulatory policies. This report on the automotive TIC market is a platform that explains applications, market trends, and varieties of TIC services, ranging from testing, inspection, and certification to auditing and quality control and assurance. These services help automakers to improve their performance and products; ensure the reliability and integrity of their products, processes, assets, and systems; as well as mitigate risks while bolstering their brands.

The global automotive TIC market was valued at USD 16.9 billion in 2019 and is expected to reach USD 22.1 billion by 2024, at a CAGR of 5.5%. Increasing automobile production in emerging economies, growing inclination toward outsourcing TIC services, rising focus of governments to impose strict regulatory standards on the automotive industry, surging adoption of automotive electronics to maintain passenger and vehicle safety, augmenting awareness among consumers regarding product quality and safety, and increasing instances of vehicle recalls due to component failures are the major factors propelling the automotive TIC market growth.

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Among all service types, certification services are expected to witness the highest CAGR in the automotive TIC market during the forecast period. In the TIC ecosystem, certification services validate the test and inspection results against a range of pre-specified standards set by governments, international standardization institutions, or clients. In the current scenario, certification services are widely used by manufacturers to demonstrate if their products adhere to the government/regulatory mandates, as well as to improve the marketability of their offerings.

Vehicle inspection services accounted for a majority share of the overall automotive TIC market in 2018. The mandate of periodic technical inspection of vehicles by governments in countries such as the US and Germany drives the market for vehicle inspection services. DEKRA SE (Germany), a leader in vehicle inspection, expanded its inspection business in Denmark by acquiring AL-SYN ApS. This acquisition took place in October 2018. AL-SYN is operating 6 inspection stations in the Danish regions of Jylland and Funen.

The automotive TIC market for outsourced services is expected to grow at a higher CAGR during the forecast period. The market for outsourced services is likely to witness a higher growth rate in the coming years owing to the growing focus of automotive companies on getting TIC services from experts, increasing the efficiency of third-party service providers owing to their well-established facilities, along with time and cost constraints that automotive companies have. Project deadlines and large orders are a few of the other key reasons owing to which automotive giants outsource their TIC requirements.

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Among all regions, the market in APAC is expected to growth at the highest CAGR during the forecast period. The market in APAC mainly constitutes major economies such as South Korea, Japan, China, Singapore, India, and Australia, which are expected to register high growth in the solid-state cooling market. Consumer awareness about the importance of certification is on the rise. Additionally, the growing population in emerging economies in APAC has accelerated the demand for passenger cars. The recent economic meltdown in Europe acted as a catalyst for the already growing automobile industry in APAC. Several European and American automobile manufacturers, such as Mercedes Benz (Germany) and General Motors (US), shifted their production plants to APAC. Owing to all these factors, automobile manufacturing in China and India is growing, making APAC one of the largest automotive markets with increasing sales and production of vehicles.

Attractive Opportunities in Automotive TIC Market: Business Growth, Size, Research and Forecast to 2024

According to the new market research report "Automotive TIC Market by Service Type (Testing, Inspection, Certification), Sourcing Type, Application (Vehicle Inspection, Electrical Systems, & Components), and Geography; Periodic Technical Inspection Market, by Region - Global Forecast to 2024", is expected to grow from USD 16.9 billion in 2019 to USD 22.1 billion by 2024, at a CAGR of 5.5%. 

The growth of the automotive TIC market can be attributed to the increasing automobile production in emerging economies, growing inclination toward outsourcing TIC services, rising focus of governments to impose strict regulatory standards on the automotive industry, surging adoption of automotive electronics to maintain passenger and vehicle safety, augmenting awareness among consumers regarding product quality and safety, and increasing instances of vehicle recalls due to component failures.

Browse 99 market data Tables and 35 Figures spread through 180 Pages and in-depth TOC on Automotive TIC Market

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Vehicle inspection services to account for largest size of automotive inspection market, by application, during forecast period

Vehicle inspection services (VIS) are offered by automotive TIC companies. It is a technical inspection service provided by TIC companies for commercial vehicles (commercial van and truck fleets; heavy and mid-duty trucks; tractors; trailers; construction equipment; forklifts) and passenger vehicles (cars, motorcycles, pick-up trucks, boats and recreational trailers, all-terrain vehicles (ATVs), and recreational vehicles (RVs)). VIS services should ideally follow national/international regulatory standards for environmental protection. These services are also applicable to imported and used vehicles. Used vehicle inspection is another innovative approach that can be employed if a vehicle is returned with damage beyond expectations (excessive wear and tear), which drastically impacts its resale value. Vehicle inspection offers an autonomous and undisputable calculation of each returned vehicle’s value so that the customer can claim the cost of repairs or check the difference between the resale and market values. It is verified by the Vehicle Inspection Management System (VIMS), which takes the entire inspection process into consideration and provides a detailed cost analysis of every fault in the car.

In-house automotive TIC service market for electric vehicles, hybrid electric vehicles, and battery systems is expected to grow at highest CAGR during forecast period

In automotive applications, in-house testing for electronic control units (ECUs) and other core components is done by automakers at their manufacturing facilities. They are collaborating with public bodies and organizations including customs, competition authorities, and industrial health and safety authorities for conducting activities related to quality control and assurance.  The market for electric vehicles is rapidly growing owing to factors such as increasing urbanization, growing demand for global hybrid vehicles, rising car sales in emerging markets, surging demand for air-conditioning systems with improved efficiency, and declining battery prices. Electric and hybrid electric vehicles largely depend on their batteries, which act as energy storage systems. The performance and safety check of such batteries is, therefore, crucial, which requires comprehensive battery testing services such as battery life cycle testing, battery abuse testing, battery performance testing, and battery environmental testing/battery durability testing.

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US held the largest share of North American automotive TIC market in 2018

According to the American Automotive Policy Council, automakers and their suppliers are the largest contributors to the automotive TIC market in the US, representing around 3% of the GDP. They are also one of the largest exporters of vehicles and parts; in the past 5 years, the country exported vehicles and parts that are worth over USD 692 billion in the past 5 years. The US offers an ideal environment for innovation that has facilitated massive advancements in the automotive sector. The US is an undisputed world leader when it comes to innovation, manufacturing, and marketing in the automotive sector. According to the Organisation Internationale des Constructeurs dAutomobiles (OICA), as of 2018, the US accounted for almost 11.8% of the total automotive production worldwide (with 11,314,705 units). The US also has a highly-skilled workforce in the automotive industry. MISTRAS Group Inc. and UL LLC are the TIC companies based in the US.

Key players operating in the automotive TIC market are DEKRA SE (DEKRA) (Germany), TÜV SÜD Group (TÜV SÜD) (Germany), Applus Services S.A. (Applus+) (Spain), SGS Group (SGS) (Switzerland), TÜV Nord Group (TÜV Nord) (Germany), TÜV Rheinland Group (TÜV Rheinland) (Germany), Bureau Veritas S.A. (Bureau Veritas) (France), Intertek Group PLC (Intertek) (UK), Eurofins Scientific (Eurofins) (Luxembourg), Element Materials Technology (Element) (UK), Lloyd’s Register Group Limited (Lloyd’s) (UK), and MISTRAS Group, Inc. (MISTRAS) (US).