Automotive TIC Market Size, Share & Industry Analysis, By Service Type (Testing, Inspection, Certification), By Vehicle Type (Passenger Cars, Commercial Vehicles), and Regional Forecast, 2024-2032

The global automotive TIC market size was USD 23.05 billion in 2023. The market is projected to grow from USD 24.66 billion in 2024 to USD 39.86 billion by 2032 at a CAGR of 6.2% during the 2024-2032 period.

Automotive certification relates to certifying automobiles or specific components as per the requirements of numerous statutory regulating organizations. Automotive testing and certification are critical to achieve regulatory requirements. Here, these services help raise production standards by testing, inspecting, and certifying products according to legislation worldwide. They assure that commodities are safe, dependable, sustainable, and high quality.

The growing number of occurrences of component failure in vehicle resulted in a rise in the use of TIC. Component failures cost the organization a significant amount of money and consumer discontent. Furthermore, the industry's key vendors' challenges of maintaining the quality of their vehicles have created new prospects for the market. For instance, in March 2021, Jaguar Land Rover reported that more than 100,000 sales are affected annually owing to quality difficulties, resulting in a negative reputation. The company intends to address the quality issue with a new business strategy.

The COVID-19 pandemic significantly impacted the global automotive Testing, Inspection, and Certification (TIC) market. Lockdown measures, supply chain disruptions, and reduced vehicle production have led to a temporary slowdown in TIC services. However, the pandemic also highlighted the importance of quality and safety standards in the automotive industry, driving the need for TIC services to ensure compliance. As the automotive sector rebounds post-pandemic, the demand for TIC services is expected to recover gradually.

Automotive TIC Market Trends

Increasing Digitization to Set a Positive Trend for Market Growth

The COVID-19 pandemic has accelerated the market's digitalization trend, with some of the world's largest corporations investing in TIC software solutions. Furthermore, government authorities accept remote testing, which aids in the market's expansion. The German KBA (Kraftfahrtbundesamt), the Irish NSAI (National Standards Authority of Ireland), the Dutch RDW (Rijksdienst voor het Wegverkeer), and the Luxembourgish SNCH (Société Nationale de Certification et d'Homologation) all accept TUV SUD's remote TIC services for automobiles.

Furthermore, periodic technical inspection (PTI) is a law enforced by several governments, including the U.S. and Germany to ensure that vehicles on the road are in good technical condition and comply with safety and pollution regulations. The country's transportation department inspects passenger and commercial motor vehicles to ensure that all parts and components are in excellent operating order to improve traffic safety. As a result of COVID-19, most PTI was completed using emerging digital technologies such as smart sensors, cloud, and data analytics. As a result, the market in the region will rise as more countries mandate PTI.

Automotive TIC Market Growth Factors

Rising Focus of Governments for Imposition of Strict Regulatory Standards on Automotive Industry to Drive Market Growth

The increasing emphasis on vehicle safety and compliance with stringent regulatory requirements globally drives the market. The automotive industry continues to witness a growing demand for TIC services driven by heightened awareness of safety concerns among consumers, regulatory bodies, and automotive manufacturers alike.

According to data from regulatory agencies and industry reports, the global automotive sector has seen a rise in the number of vehicle recalls and safety-related issues in recent years.

• For instance, in 2023, there were over 800 vehicle recalls in the U.S. alone, affecting millions of vehicles due to various safety concerns such as faulty airbags, braking systems, and electrical components. Similarly, in 2024, the European Union reported a significant increase in vehicle recalls, highlighting the critical need for stringent testing and inspection protocols to ensure vehicle safety.

The proliferation of new technologies, such as autonomous driving systems, electric vehicles (EVs), and connected vehicles, has further emphasized the importance of safety and regulatory compliance in the automotive industry. These technologies bring unique challenges related to safety-critical functionalities, cybersecurity risks, and interoperability, driving the demand for specialized TIC services.

In response to these trends, regulatory bodies globally have implemented stricter safety and environmental standards for vehicles. For example, in 2023, the European Union introduced new regulations mandating advanced safety features and emission reduction targets for all new vehicles sold in the region. Similarly, in 2024, the U.S. Environmental Protection Agency (EPA) announced tighter emission standards for light-duty vehicles, aiming to reduce greenhouse gas emissions and improve air quality.

In conclusion, the rising focus on vehicle safety and regulatory compliance, coupled with technological advancements and the globalization of the automotive industry, serves as a significant driving factor for the continued growth of the automotive TIC market in 2023 and 2024. As the automotive sector evolves, the demand for TIC services is expected to escalate further, ensuring the safety, reliability, and compliance of vehicles worldwide.

Increasing Penetration of Internet of Things (IoT)-based Technology to Fuel Market Growth

The Internet of Things (IoT) is a network of interconnected computing devices that exchange data for executing a task without requiring human interaction. Testing and inspection of the software powering the smart digital systems will become as vital as hardware testing & inspection as the linked gadgets, mobile payments, and connected autos are becoming more prevalent. For instance, AsiaInspection, a quality control and compliance firm, performs product inspections, laboratory testing, and supplier audit programs. AsiaInspection's customer interface has been digitized such that the inspection is completed within 48 hours after making an appointment, and a thorough report is provided online the same day.

RESTRAINING FACTORS

Lack of Standardization in Regulation Across Regions Poses a Constraint on Market Expansion.

As of 2024, the automotive industry faces a landscape of rapidly evolving regulations pertaining to vehicle safety, emissions, cybersecurity, and emerging technologies, such as autonomous driving systems. The dynamic nature of these regulations poses challenges for both manufacturers and TIC service providers in ensuring compliance and certification.

Moreover, the lack of harmonization and consistency in regulatory frameworks across different regions further complicates matters, leading to increased compliance costs and administrative burdens. For instance, differing safety standards between major automotive markets, such as the EU, North America, and Asia, can necessitate separate testing and certification processes, adding to the time and resources required for market entry.

Additionally, the emergence of new technologies in the automotive sector, such as electric vehicles (EVs) and advanced driver assistance systems (ADAS), introduces additional layers of complexity for TIC processes. Ensuring the safety, performance, and interoperability of these technologies requires specialized expertise and testing methodologies, further straining resources and capabilities within the TIC industry.

Addressing these challenges requires collaboration between regulators, industry stakeholders, and TIC service providers to streamline regulatory processes, promote harmonization, and facilitate knowledge sharing. By overcoming barriers related to regulatory complexity, the automotive TIC market can unlock its full potential and better support the automotive industry's transition towards safer, cleaner, and more innovative mobility solutions.

Automotive TIC Market Segmentation Analysis

By Service Type Analysis

Testing Segment Dominates the Market due to Widespread Applications

The market is segmented into testing, inspection, and certification based on service type.

The testing type dominates the classification of service types and is anticipated to exhibit the highest CAGR throughout the forecast period. Testing is the most significant aspect of the automobile industry as it helps manufacturers in decision-making to meet predetermined specifications. Testing and analysis services help ensure that the products and commodities have the attributes that customers need. According to statutory standards, rules, and specifications, the test is primarily determined experimentally, and on-site testing is available for only manufacturing and process industries. The service providers work on building a massive global network of laboratories. Their facilities are strategically positioned for the convenience of their clients, allowing easy accessibility from ports and major production hubs. They offer an array of laboratory equipment and field-specific technical experience. To avoid fatal errors, businesses with minimal spending patterns in the automobile industry conduct testing and then introduce the product to the market.

Inspection and verification of OEM component manufacturers offer performance testing, durability testing, chemical compliance testing, engine endurance, functional safety, and cybersecurity in the inspection segment. It guarantees better consumer protection through safer products and assists government authorities in improving efficiencies and maximizing market surveillance resources that are already limited. It also aids manufacturers in lowering internal compliance costs and navigating global market regulations more effectively. As a result, the inspection market is expected to increase steadily.

Third-party attestation of automotive products, processes, and systems is included in the certification. Some of the key certifications for customer safety in the automobile sector include IATF 16949, ISO (International Organization for Standardization) family, TISAX (Trusted Information Security Assessment Exchange), and EMAS (Eco-Management and Audit Scheme). The Consumer Product Safety Improvement Act (CPSIA) of 2008 in the U.S. mandates third-party testing and certification of certain products before they are introduced. Government-mandated certification could aid in the expansion of this market.

By Vehicle Type Analysis

Passenger Cars Segment to Hold Largest Automotive TIC Market Share

The market is segmented into passenger cars and commercial vehicles based on vehicle type.

The passenger cars sector currently has the biggest market share, which is expected to hold during the forecast period. The market for connectivity standards is developing with the growing demand for technologies, such as connected automobiles and other IoT applications, owing to escalating safety concerns and regulations. As a result, demand for these services is expected to rise. Also, to ensure consumer safety, blockchain can be used to implement end-to-end traceability systems for cab services. As a result, the passenger cars category now has a large market share and will continue to do so during the forecast period.

The commercial vehicles segment is expected to exhibit the highest CAGR during the projected period. This factor is due to TIC businesses supplying fleet operators with services on an order-by-order or daily basis. For example, smart sensors in products provide round-the-clock remote monitoring and inspection capabilities, which may be utilized for 24/7 safety & security inspections and predictive maintenance for commercial vehicles. Big Data and analytics will enable TIC organizations to deliver new services, such as predictive maintenance and data-based services in new sectors, in addition to providing superior insights for existing services.

REGIONAL INSIGHTS

Asia Pacific has the maximum market share, accounting for USD 10.69 billion in 2023. The growing demography of countries, such as China and India, which accounts for more than 38% of the world population is a crucial element driving the region's growth. This expansion is due to increased urbanization and greater disposable income, which resulted in changing consumer preferences. The automotive sector is expanding in South Korea, India, and China, owing to increased car production. In 2019, India produced 4.51 million automobiles, which were 3.62 million were cars. In addition, China was the world's top vehicle producer in 2019, producing 25.72 million vehicles, 21.36 million of them being cars. The automotive TIC market growth in the region is fueled by a strong automotive sector and rising number of car manufacturers. As a result, Asia Pacific is expected to lead the market during the forecast period.

Europe is expected to be the second-largest stakeholder, exhibiting the fastest growth during the forecast period. It can be attributed to the fact that most big TIC businesses have their headquarters in Europe and that the majority of their sales come from APAC and EU nations. According to a report published by the European Commission in 2018, around 178 vehicle facilities are present across the EU. During the projection period, the market is projected to be driven by continued development of vehicle-to-infrastructure and in-vehicle entertainment technologies. The presence of major car manufacturing businesses, such as Robert Bosch GmbH (Germany), Volkswagen AG (Germany), and Daimler AG (Germany), makes Europe a major hub for the automotive sector.

The automotive TIC market in North America accounted for the third-largest market. As far as major automotive TIC organizations are concerned, the U.S. is first in this region. The U.S. has dominated the light vehicle segment. The North America market is anticipated to grow significantly throughout the forecast period, owing to increased vehicle manufacturing in the U.S. New potential for this industry has risen due to rise in electric vehicles.

Furthermore, the government is a primary driver of a country's market expansion. For illustration, the U.S. Environmental Protection Agency (EPA) proposed technical changes to emissions testing protocols for the Fuel Economy Standards and Greenhouse Gas Emissions (GHG) Standards in 2022 to ensure a smooth transition from fuel blends with 0% ethanol to 10% ethanol. As a result of introducing such legislation and other requirements, TIC services have become essential for automobile companies in this region.

Latin America, the Middle East, and Africa make up the rest of the world. There are no strong laws in Africa, and there are no resources to alter them. On the other hand, the Middle East is expected to play a big role in the market expansion. This can be related to the region's socio-economic prosperity. As a result, automotive testing, inspection, and certification market in this region are anticipated to be in high demand.

List of Key Companies in Automotive TIC Market

Applus Services SA Focuses on Technological Developmental Acquisitions to Enhance Market Share

Applus+ is a global leader in testing, inspection, and certification. Its competent and skilled staff of over 23,000 people ensures operational excellence in over 70 countries across numerous sectors. Applus+ RTD, Applus+ K2, Applus+ Velosi, Kiefner and Associates, X-R-I Testing, and JAN X-Ray Services are some of Applus's well-known brands in the U.S.

In October 2021, Applus+ purchased Mipel, S.A.'s Instrumentation Area and Metrology Laboratory, and it will be merged into the Applus+ Laboratories business. The laboratory is equipped with high-performance equipment and facilities. Its employees are well-versed in serving industries that require meticulous control of measuring instruments such as automotive, aeronautics, pharmaceutical, government agencies, and hospitals. In May 2021, Applus+ purchased IMA Dresden, a testing laboratory with a solid reputation for excellence in materials and structural testing. Also, it is a leader in most of its core areas of European automotive, railway, aerospace & military, wind power, and medical devices markets.

LIST OF KEY COMPANIES PROFILED:

• TÜV SÜD (Munich, Germany)


• Applus Services, S.A (Madrid, Spain)


• Dekra SE (Stuttgart, Germany)


• SGS Group (Geneva, Switzerland)


• Bureau Veritas Group (Neuilly-sur-Seine, France)


• Intertek Group Plc (London, U.K.)


• Mistras Group (New Jersey, U.S.)


• Element Material Technology Ltd (London, U.K.)


• British Standards Institution (London, U.K.)


• DNV GL (Baerum, Norway)

KEY INDUSTRY DEVELOPMENTS:

• March 2024: SGS, the world's leading testing, inspection, and certification company, expanded its far-reaching expansion of fire safety, resistance, and flammability testing services with ISO/IEC 17025:2017 accreditation at its laboratory in Farmingdale, New York, USA. Its services will be offered across the aviation, automotive, and maritime sectors.


• February 2024: SGS, a global leader in testing, inspection, and certification services, collaborated with Jaguar Land Rover (JLR). This brings an Electromagnetic Compatibility (EMC) testing facility in Chakan, Pune.


• February 2024: China Automotive Certification Center Co., Ltd. (CCAP) initiated CCAP mark certification for electric vehicle charging equipment. This certification adheres to several standards, including GB/T 18487.1-2015 and GB/T 18487.2-2017, among others, covering various aspects, such as general requirements, electromagnetic compatibility, and communication protocols. Many products and components related to E-Mobility require CCC Certification to be approved for import and sale on the Chinese market.


• December 2023: UL Solutions opened a battery development facility in South Korea’s central electric vehicle battery manufacturing hub, Pyeongtaek. This Korea Advanced Battery Laboratory offers evaluation analysis services covering the essential stages of development, including concept and design verification, product validation, and certification. This collaboration assists Korean electric charger manufacturers in obtaining ENERGY STAR certification.


• October 2023: DEKRA acquired the environmental testing laboratories of Weiss Technik Testing Services. This strategic move adds an extensive range of environmental testing services, further strengthening DEKRA's product testing portfolio in North America.

REPORT COVERAGE

The global market report provides detailed market analysis and focuses on crucial aspects such as leading companies, types, and leading product applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market's growth over recent years.

Report Scope & Segmentation