The global auto parts manufacturing market size was valued at USD 744.37 Billion in 2025. Stringent emissions norms in Europe and Asia are compelling automakers to adopt lightweight, high-performance auto parts, accelerating demand for precision-cast aluminium alloys, forged carbon composites, and next-gen suspension systems. In turn, the market is expected to grow at a CAGR of 6.10% during the forecast period of 2026-2035 to reach a value of USD 1345.68 Billion by 2035.
Funds granted by the governments all around the globe significantly generate demand in the auto parts manufacturing market. The United States Department of Energy has already invested USD 13 million in grants toward domestic EV parts production. Similarly, India’s Production Linked Incentive (PLI) Scheme for Auto Components has attracted companies, with INR 25,938 crore earmarked to ramp up the manufacturing of critical parts like advanced batteries and EV motors. The market growth is further accelerated by tech-savvy manufacturers investing heavily in automation, sustainability, and AI-driven production.
The surge in demand for lighter, durable components compatible with EVs and hybrids is creating fresh growth opportunities for auto parts manufacturing companies. Firms are integrating 3D printing and digital twin technology to reduce lead times and prototype costs. For instance, Spanish-based manufacturer, Gestamp, is harnessing the capabilities of LTE and 5G networks as well as IoT-based devices for the development of a smart factory that relies on data analytics and processing for the real-time control and processing of the auto parts, thereby propelling the auto parts manufacturing market growth. This initiative, funded by the European Union, is aimed at promoting digitalisation in the automotive sector of the country.
Base Year
Historical Period
Forecast Period
Auto parts manufacturers are enhancing their online presence to reach a broader customer base.
Favourable government regulations are expected to promote the demand for environmentally friendly auto parts.
North America is expected to emerge as a significant market due to the high usage of commercial vehicles.
Compound Annual Growth Rate
6.1%
Value in USD Billion
2026-2035
*this image is indicative*
| Global Auto Parts Manufacturing Market Report Summary | Description | Value |
| Base Year | USD Billion | 2025 |
| Historical Period | USD Billion | 2019-2025 |
| Forecast Period | USD Billion | 2026-2035 |
| Market Size 2025 | USD Billion | 744.37 |
| Market Size 2035 | USD Billion | 1345.68 |
| CAGR 2019-2025 | USD Billion | XX% |
| CAGR 2026-2035 | USD Billion | 6.10% |
| CAGR 2026-2035 - Market by Region | Asia Pacific | 7.9% |
| CAGR 2026-2035 - Market by Country | India | 9.1% |
| CAGR 2026-2035 - Market by Country | Brazil | 7.6% |
| CAGR 2026-2035 - Market by Sales Channel | Aftermarket | 6.8% |
| CAGR 2026-2035 - Market by Vehicle Type | Passenger Cars | 7.0% |
| Market Share by Country 2025 | Canada | 2.0% |
The rapid shift towards EVs has compelled companies to restructure components, indirectly impacting the auto parts manufacturing market development. For instance, Tesla’s gigacasting technique now replaces up to 70 individual parts with a single casting. This trend towards modularisation is emerging in this space, especially in China and Germany. Moreover, the EU Commission reports that EVs could make up 55% of total vehicle sales by 2030. This shift compels manufacturers to invest in new tooling, materials, and assembly lines. Modular parts also reduce maintenance costs, which happens to be a critical B2B selling point for fleet operators.
Global trade tensions have resulted in increased local production, stimulating the auto parts manufacturing market value. Recently, the EU launched the Critical Raw Materials Act to secure supply chains for EV components. Meanwhile, the United States Inflation Reduction Act incentivises domestic part production for clean energy vehicles. OEMs prefer local partners to recommend shipping costs and meet ESG targets. Suppliers embracing regional micro-factories and on-demand production, are witnessing faster client acquisition cycles, especially among Tier 1 manufacturers.
3D printing has become a popular trend in the auto parts manufacturing market. Companies like Ford use 3D-printed components for assembly jigs and even functional parts in select models. According to SmarTech Analysis, the automotive 3D printing market is expected to exceed USD 9 billion by 2029. Companies like BMW are integrating additive manufacturing into its Mini lineup to offer bespoke parts. This trend allows auto parts manufacturers to respond faster to unique OEM demands, improving turnaround times significantly.
The rise of connected vehicles has catalysed demand for smart components, reshaping the auto parts manufacturing market dynamics. For instance, Bosch offers sensor-laden steering systems that feed real-time road data to onboard computers, which has become critical for driver safety. Manufacturers are embedding microprocessors in shock absorbers, brake systems, and filters, further adding value through diagnostics. OEMs now seek suppliers who can co-develop intelligent subsystems.
Automakers are demanding components made from carbon fibre and magnesium alloys to improve fuel efficiency. In September 2023, in Japan, Toray Industries has partnered with Honda to develop ultra-light yet strong parts for next-gen vehicles. According to the United States Department of Energy, reducing vehicle weight by 10% can improve fuel economy by 6-8%. Suppliers able to deliver these advanced materials experience increased contracts from premium automakers like Audi and Lexus, who prioritise performance without environmental trade-offs.
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The EMR’s report titled “Global Auto Parts Manufacturing Market Report and Forecast 2026-2035” offers a detailed analysis of the market based on the following segments:
Market Breakup by Component
Key Insight: Engine components, such as fuel systems, ignition systems, and engine control modules, help to improve overall vehicle performance and efficiency, accelerating the overall auto parts manufacturing demand. The growing emphasis on engine optimisation, emission reduction, and powertrain electrification has fuelled the demand for innovative engine components. New emission standards like Euro 7 formulated by the European Union have compelled manufacturers to innovate exhaust treatment systems and cylinder deactivation technology. In response, firms like Federal-Mogul are prototyping coatings that reduce friction and heat loss.
Market Breakup by Sales Channel
Key Insight: OEM sales channel occupies a significant share of the auto parts manufacturing market industry revenue, owing to the rising demand for auto parts that are manufactured by the original manufacturer. These parts usually fit the exact description of the specific vehicle and offer a longer lifespan compared to the aftermarket parts. Moreover, OEMs have standardised quality control, which often leads to greater reliability and performance.
Market Breakup by Vehicle Type
Key Insight: Passenger cars considerably boost the auto parts manufacturing market growth due to high unit volumes and diversity in model variants. As more models integrate semi-autonomous systems, the demand for precision parts, including LiDAR mounts, sensor housings, micro-actuators, has grown exponentially. Moreover, components such as engines, transmissions, components, and interior accessories are some of the highest in-demand auto parts for passenger cars.
Market Breakup by Region
Key Insight: Asia Pacific emerged as a largest regional market for auto parts manufacturing. The region is anticipated to be a major global market over the forecast period as well, witnessing a robust growth rate as automotive sales grow and new technology applications for producing automotive parts are explored. Additional market opportunities are supported by an increase in the production and sales of passenger cars and the digitisation of distribution systems for automotive components.
| CAGR 2026-2035 - Market by | Country |
| India | 9.1% |
| China | 7.6% |
| Brazil | 7.6% |
| Mexico | 6.4% |
| Australia | 5.4% |
| Japan | 4.7% |
| USA | XX% |
| Canada | XX% |
| UK | XX% |
| Germany | XX% |
| France | XX% |
| Italy | XX% |
| Saudi Arabia | XX% |
By Component, Engine Components Secure a Substantial Share of the Market
Engine components continue to hold the dominant share in the industry largely due to hybrid vehicle proliferation. Despite the booming EV sector, BEV and PHEV sales increased by 35% in 2023, led by markets like Japan and the United States. Engine blocks, pistons, and turbochargers are evolving with their lightweight nature and smart features. For instance, Mahle’s Smart Cylinder Head is integrated with sensors for real-time thermal monitoring.
Battery parts have emerged to be the fastest-growing component accelerating the market revenue. As per the auto parts manufacturing market analysis, the global EV battery component market recorded USD 64.36 billion in 2024 and is projected to grow at a 19.20% CAGR over the forecast period. Companies like Panasonic and CATL are investing in modular battery casings with built-in cooling systems. Government initiatives are also fuelling this category’s growth. For example, India’s ACC PLI scheme and South Korea’s USD 15.1 billion battery subsidy plan have fast-tracked innovation. Automotive part manufacturers focusing on solid-state separators and thermal interface materials are attracting Tier 1 contracts.
By Sales Channel, OEM Account for the Dominant Share of the Market
OEMs account for the dominant share of the global industry as automakers prefer integrated supply chains. Tier 1 suppliers like Magna, Bosch, and Denso are being looped into co-development cycles for newer models. Contracts have been made significantly longer, often 5-10 years, allowing component firms to plan R&D activities. For instance, Hyundai’s MoU with LG Energy Solution, signed in May 2023, to build an EV battery cell plant in Karawang, near the Indonesian capital Jakarta has been one of the significant developments in this segment. OEM demand is especially strong in the EV sector, where real-time co-design helps reduce prototyping errors and recalls.
Aftermarket channels are witnessing fast-paced growth in the auto parts manufacturing market. The average vehicle age in the United States hit a record of 12.5 years in 2023. Hence, parts remanufacturing demand, especially for EVs and hybrids, is growing rapidly. EU regulations now allow reuse of battery modules and motors. Aftermarket players like LKQ are integrating blockchain-based verification for component traceability. This trust factor has sparked B2B demand among fleet operators and insurance repair chains looking for quality-certified, cost-effective replacements.
By Vehicle Type, Passenger Cars Hold the Leading Position in the Market
Passenger cars significantly dominate the global industry revenue. Urbanisation and rising middle-class incomes in Asia, especially India and Indonesia have been the key motivators of the surging global demand. For example, in FY2025, India alone produced 4.3 million passenger units. Compact SUVs with advanced infotainment and safety systems require more parts per vehicle. From drive-assist modules to electronic mirrors, the component count per car is rising. OEMs are launching more variants annually, pushing suppliers to diversify SKUs and speed up tooling cycles.
The booming e-commerce sector is driving the LCV category’s dominance in the auto parts manufacturing market shares. Ford’s E-Transit and Rivian’s delivery fleet are major examples. The commercial push has entailed the demand for robust, long-life auto parts, including upgraded suspension, drivetrain cooling, and modular cargo systems. Suppliers innovating in regenerative braking and thermal management are well-positioned to grow in this space.
By Region, Asia Pacific Registers the Dominant Market Share
Asia Pacific continues to be the dominant regional market for auto parts manufacturing. China, India, and Japan collectively manufacture over 60% of global vehicles. The country’s push for NEVs (new energy vehicles) has turbocharged auto component demand. Companies like BYD and Geely are signing billion-dollar supply contracts with local parts makers. India’s 2023 vehicle parts export recorded USD 21.1 billion, with Europe and the United States as top buyers. Policies like Japan’s Green Innovation Fund are pushing for carbon-neutral part production. B2B buyers in the region are shifting from price-sensitive to tech-sensitive sourcing.
The auto parts manufacturing market in North America is also anticipated to gain a sizeable share during the forecast period, owing to the presence of some of the leading global automotive companies in the region. The regional market growth is supported by the rising usage of advanced technologies by vehicle manufacturers owing to the region’s superior production capabilities, state of the art infrastructure, and technological know-how.
Leading auto parts manufacturing market players like Bosch, ZF Friedrichshafen, and Aisin are focusing on electrification, sensor integration, and sustainable production. Strategic collaborations with OEMs have become the new strategies for growth. Startups in AI-driven part inspection and recycling-based manufacturing are disrupting the traditional tiers. Companies are also investing in digital twins, traceability technology, and cloud-based supply chain platforms. Auto parts manufacturing companies are steadily incorporating sustainable auto parts, which are manufactured from tree waste to reduce their dependency on plastics and biocomposites. These sustainable auto parts reduce waste generation and contribute to the circular economy by reusing waste tree parts which are discarded. Furthermore, tests have shown that these auto parts are durable and robust and can be incorporated into vehicles for mass production, opening new avenues and creating opportunities for further development.
Robert Bosch is a multinational engineering technology company in automotive parts industry, based in Gerlingen, Germany. Founded in 1886, the company offers smart building solutions, carbon neutrality solutions, and hydrogen technology, among others.
DENSO is an automotive component provider, headquartered in Aichi, Japan. Some of its specialties include electric/hybrid components, human-machine interfaces, wireless charging, and robotics, among others.
Continental AG is an automotive parts manufacturer in the automotive sector, based in Hanover, Germany. Incorporated in 1871, the company offers efficient and cutting-edge solutions for the mobility and transport sectors.
Valeo, a French-based auto parts company, known for its innovations in electric systems, ADAS technologies, and thermal management. The company also focuses on sustainable mobility and partnerships with major automakers. The firm announced that it is expanding its operations in Tamil Nadu, India, to strengthen its position in the Indian subcontinent.
*Please note that this is only a partial list; the complete list of key players is available in the full report. Additionally, the list of key players can be customized to better suit your needs.*
Other key players in the market are ZF, Friedrichshafen AG, Hyundai Motor Group, Aisin Corporation, Magna International Inc., Lear Corporation, Yazaki Group, Tenneco Inc., Sumitomo Electric Industries, Ltd., Akebono Brake Industry Co., Ltd., Panasonic Holdings Corporation, Faurecia S.E., and Marelli Holdings Co., Ltd, among others.
Explore the latest trends shaping the global auto parts manufacturing market 2026-2035 with our in-depth report. Gain strategic insights, future forecasts, and key market developments that can help you stay competitive. Download a free sample report or contact our team for customized consultation on auto parts manufacturing market trends 2026.
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In 2025, the auto parts manufacturing market reached an approximate value of USD 744.37 Billion.
The market is projected to grow at a CAGR of 6.10% between 2026 and 2035.
The market is estimated to witness a healthy growth during 2026-2035 to reach around USD 1345.68 Billion by 2035.
Key strategies driving the market include investing in AI prototyping, scaling regional micro-factories, partnering with OEMs for R&D, enhancing recyclability of parts, and localising sensor tech supply chains.
The key trends aiding the market include surge in the production of hybrid vehicle parts; growth of 3D printing; growing demand for autonomous vehicle parts; and favourable government initiatives supporting sustainable auto body parts.
The major regions in the industry are North America, Latin America, the Middle East and Africa, Europe, and the Asia Pacific.
The leading components in the market are battery, cooling system, underbody components, engine components, automotive filter, lighting components, and electrical components, among others.
The major sales channels in the industry are OEM and aftermarket.
The significant vehicle types in the market are passenger cars, light commercial vehicles, and heavy commercial vehicles, among others.
The major players in the market are Robert Bosch GmbH, DENSO CORPORATION, Continental AG, ZF, Friedrichshafen AG, Hyundai Motor Group, Aisin Corporation, Magna International Inc., Valeo, Lear Corporation, Yazaki Group, Tenneco Inc., Sumitomo Electric Industries, Ltd., Akebono Brake Industry Co., Ltd., Panasonic Holdings Corporation, Faurecia S.E., and Marelli Holdings Co., Ltd, among others.
COVID-19 restrictions, along with health and safety concerns, led to fewer workers in factories. This shortage slowed down production rates, even as demand began to recover.
The key challenges are raw material volatility, rising compliance costs, and tech obsolescence.
Explore our key highlights of the report and gain a concise overview of key findings, trends, and actionable insights that will empower your strategic decisions.
| REPORT FEATURES | DETAILS |
| Base Year | 2025 |
| Historical Period | 2019-2025 |
| Forecast Period | 2026-2035 |
| Scope of the Report |
Historical and Forecast Trends, Industry Drivers and Constraints, Historical and Forecast Market Analysis by Segment:
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| Breakup by Component |
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| Breakup by Sales Channel |
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| Breakup by Vehicle Type |
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| Breakup by Region |
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| Market Dynamics |
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| Competitive Landscape |
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| Companies Covered |
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