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Why You Should Probably Move to Shenzhen
Why You Should Probably Move to Shenzhen
Ganesh Subramaniam

Senior Consultant at Draup

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Why You Should Probably Move to Shenzhen

14 Feb 2019

 

1. Service Provider Competition in China is Heating Up
There is a large addressable market for service providers but the competition is low and nascent. China’s automotive R&D headcount is 94,000 which is greater than several traditional auto hubs. ER&D market addressed by service providers in China account for more than $2 bn. European and Indian Service Providers dominate the automotive services market with ~70% of overall engineering services revenue ($450-500 mn).
overall engineering services revenue
2. Body Engineering Segment is the Dominant Revenue Generator
Body engineering and safety restraints have high outsourcing intensity in both the commercial and passenger car segments, accounting for 40% of the revenue among top 5 SPs. With increasing focus on digital engineering within automotive, OEMs are also prioritizing initiatives around connected cars and infotainment.
revenue among top 5 SPs
3. Who Can Service Providers Target?
Auto firms in China are hunting for highly efficient technology partners that can help them fasten time-to-market. Among foreign players, Bosch and Ford have high outsourcing intensity while SAIC Motors and BYD are the front-runners among domestic firms. Design, embedded hardware and software, and testing and validation are key engagement areas.
SAIC Motors and BYD