|Status : Published||Published On : Sep, 2021||Report Code : VRSME9068||Industry : Semiconductor & Electronics||Available Format :||Page : 350|
The testing, inspection, and certification market in the automotive industry was USD 17 billion in 2020, registering a CAGR of 4.3% during the forecast period 2021-2027. Testing in TIC means an industry activity that assures manufactured products, individual components, and multi-component systems are suitable for the predetermined purpose. Inspection and testing are the operating parts of quality control, which is the most critical factor for the survival of any manufacturing company. Quality control directly supports other factors such as cost, productivity, on-time delivery, and market share. The testing, inspection, and certification market report is composed of conformity assessment agencies, which provide services from audit and inspection to testing, verification, quality assurance, and certification.
The rising demand for high quality and safety such as anti-skid braking systems, electronic brake-force distribution (EBD), airbags, and emission control systems, such as catalytic converters using turbochargers, and exhaust gas recirculation (EGR) systems, etc. are the key drivers for the growth of the TIC market in the automotive industry. Moreover, the automotive industry is required to meet the mandated specific norms and have to comply with national and international safety regulations and standards, rising automobile production in developing economies, rising inclination of outsourcing testing, inspection, and certification services, mounting adoption of automotive electronics to offer passenger and vehicle safety, growing instances of vehicle recalls due to component failures are the factors attributed to the growth of TIC market in the automotive industry. The shift in trend towards digital inspection rather than physical vehicle inspection and predictive maintenance is anticipated to propel the growth of the global automotive TIC market during the forecast period 2021-2027.
The COVID-19 pandemic resulted in a short-term decline in demand and revenue in the first quarter of 2020 owing to the unavailability of the labor force and the temporary shutdown of factories. However, the mounting trend of digitalization in the automotive TIC market will help the TIC companies to focus on software solutions so as to conduct audits, damage assessments, and certifications.
Business organizations in the TIC market are intensifying IT infrastructures and developing business continuity plans, implying that the testing, inspection, and certification market are holding the substantial potential to bounce back from the COVID-19 outbreak. This is due to the fact that TIC services will enhance and protect brand reputation, verify products’ safety, and enables trade.
Insight by Sourcing Type
On the basis of sourcing type, the TIC market for the automotive industry is bifurcated into in-house and outsourced. Among the two segments, the in-house segment is anticipated to dominate the tic market for the automotive industry during the forecast period owing to increased visibility, complete control over the entire process in terms of technology, skilled personnel, and testing and measurement equipment, and improved delivery performance.
Insight by Service Type
On the basis of service type, the TIC market for the automotive industry is categorized into testing, inspection, certification, and others. The testing segment is anticipated to hold the largest share in the testing, inspection, and certification market in 2020 owing to the massive demand for safety and quality of products and mandatory standards from the regulatory authorities to provide safety, quality, and efficiency of products. There are certain areas such as automotive lighting solutions and components, connected car solutions, and material and reliability testing that require automotive testing in order to comply with specific standards and regulations. Moreover, the certification market is anticipated to have a high CAGR during the forecast period owing to mandatory regulatory requirements and improve marketability of the offerings.
Insight by Industry Vertical
Based on end-use industry, the TIC market for the automotive industry is divided into vehicle inspection services, electrical components and electronics, interior & exterior materials and components, electromobility/electric vehicles, automotive fuels, fluids, and lubricants, homologation testing, Advanced Driver Assistance Systems (ADAS) testing, durability testing, OEM testing, telematics, emission testing, acoustic testing, and others. Among these segments, the vehicle inspection services account for a significant share in the TIC market for the automotive industry as it monitors vehicle damage throughout the supply chain, assesses the cost of repair for damaged vehicles, offers safe and reliable vehicles, provides quality, efficiency, and safety, decreases the environmental impact of road traffic, cost, delivery lead-times. Furthermore, the growing focus of the government to implement legislation that helps to reduce road accidents and the environmental impact of non-compliant vehicles are further supporting the growth of the automotive TIC services market for vehicle inspection.
The TIC market for the automotive industry is characterized by various industrial trends such as growing investment in AR and VR, mounting adoption of connected devices and cloud-based technology, increasing mergers and acquisitions by the industry players, and sustained consolidation of suppliers leading to globalization.
The rising instances of vehicle recall arising from component failure along with growing government-enforced regulations, considerable industry standards, certification requirements, the surge in automotive production and technological developments, environmental awareness, and huge penalties against non-compliance parties are projected to drive the demand for TIC in the automotive industry. Moreover, the increase in attention of manufacturing companies to offer safe and quality products will enhance customer retention, mounting demand for interoperability testing for connected devices and IoT, globalization, and rise of global trade, increase in disposable income in emerging economies, and emerging digital technologies will boost the growth of the TIC market in the automotive industry. Nevertheless, the increasing adoption of automotive electronics to provide passenger and vehicle safety will further boost the growth of the automotive TIC market during the forecast period.
The testing, inspection, and certification market face certain challenges like trade wars and growth fluctuations, a huge investment for automation and installation of industrial safety systems, high cost of TIC owing to diverse standards and regulations globally, and a decrease in the sale of vehicles globally due to COVID-19 pandemic. Moreover, there are certainly more challenges faced by the automotive industry such as the long lead time required for overseas qualification tests, compliance to CSR, lack of testing facilities and skilled personnel may hamper the growth of the TIC market.
Testing, inspection, and certification is a massive market that provides lucrative opportunities in technologies such as AI, robotics, drones, big data analytics, next-generation automation, and cloud and cybersecurity. Moreover, there is a need to have a periodic technical inspection (PTI) of vehicles mandated by governments such as the US and Germany, rising number of electric and hybrid vehicle production, growing sales, and production of vehicles in developing economies will create opportunities for growth for the TIC market in the automotive industry.
Europe is anticipated to witness the largest market share in the TIC market for the automotive industry as many TIC companies have their headquarters in Europe and generate their revenues from PAC and European countries. Many European automotive OEMs such as Audi AG, Volkswagen are developing ADAS and self-driving cars resulting in mounting adoption of automotive testing services. Moreover, massive infrastructure advancement for electric vehicle charging stations in the region will propel the demand for inspection and certifications services.
Key players are focusing on mergers & acquisitions, product launch, expansion, generate new revenues, optimize the operational cost, and enhance service efficiencies via process upgrades. The industry players are taking the COVID-19 crisis as an opportunity to restructure and revisit their existing strategies, focus on new services and delivery models to access the growing demand for automation, remote service execution, and improved digitalization.
Bureau Veritas has launched a complete portfolio of services on Electric Vehicle Charging Stations (EVCS) which covers the full lifecycle—from design, construction, and commissioning to operations.
Applus+ Automotive division in the US won 4 contract extensions for statutory vehicle inspections. These contracts are reinforcing Applus+ as a strong player in the US market, proving its commitment to providing governments, manufacturers, and traders with the best solutions in improving vehicle safety and reducing harmful vehicle emissions.
Some of the key players operating in the TIC market in the automotive industry: Intertek Group plc, Bureau Veritas, UL LLC, SGS SA, Eurofins Scientific, TUV Rheinland, Lloyd Register Group Limited, DEKRA SE, Applus+, and DNV GL.