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Automotive TIC is Shaping the Future of the Automotive Industry

Automotive TIC or automotive testing, inspection, and certification refer to the certificate that ensures compliance of the product with regulations/standards set by the governments. The automotive certificate is essential for certifying automobiles or a specific component to ensure the safety and quality of the particular product or service. There are several factors shaping the future of the automotive TIC industry. One of them is that the TIC has become of the essential components surging the sales of automobiles. 

TÜV SÜD signed a pact with Thailand’s Ministry of Industry and the Thailand Automotive Institute (TAI) in 2019. This agreement aims to build a battery testing center near Bangkok.

Growing automobile production and sales

The demand for automotive is significantly increasing. Growing urbanization and rising employment are two prominent factors surging the demand for automotive. In emerging markets, mainly in Asia-Pacific, automobiles sales are surging. Statista estimates that around 317,000 commercial vehicles were sold in China in September 2021. 

Moreover, the demand for automotive has been increasing in Asia-pacific. It is attributed to the presence of prominent players, such as Toyota, BYD, etc. In 2000, the emerging economies accounted for around one-fourth of the global automotive production. Meanwhile, in 2015, the region held almost half of the global automotive industry share. To describe it more, China registered the production of approximately 4 million cars in 2000, which grew to around 24 million in 2017.

Benefits of the TIC services

TIC has become an essential factor to ensure the development of high-quality components and vehicles. It also helps automotive suppliers to make amendments where needed. Moreover, growing advancements, demand for light vehicles, and increasing deployment of electric vehicles are all surging the demand for safer, secure, and physically efficient mobility services. 

The increasing preference or quality is another factor shaping the future of the automotive industry. In 2021, Jaguar Land Rover declared that the company registered a loss of 100,000 sales annually, mainly due to quality issues. Thus, TIC has become a crucial factor for companies to tackle the quality problem by introducing new business models.

Stringent government regulations

Growing government regulations has made it essential for manufacturers to follow the regulatory standards. In addition, the growth of the electric vehicle segment is forecast to offer new opportunities for the automotive TIC market. United States Environmental Protection Agency (EPA) introduced technical changes related to the emissions testing protocols and compliance calculations in 2020. The compliance calculations intend to focus on the Light-duty Greenhouse Gas (GHG) Emissions Standards and Fuel Economy Standards. 

Previously, most Chinese enterprises performed testing, inspection, and certification in-house. Later the China Compulsory Certification (CCC) became more widely accepted. Moreover, the passenger car segment is also witnessing significant growth due to the low car pricing and easy car financing alternatives. In 2017, around 80 million passenger cars were produced globally. China holds the place of the largest producer of passenger cars, accounting for 29% of all vehicles produced in 2017.

Increasing partnerships, launches, and investments

With the growth of automotive production, the offerings from automotive TIC companies are also growing. Companies are continuously entering into partnerships, making headlines due to new launches and investments. Dekra SE, Intertek Group, TUV Rhienl and Group, Applus Group, TUV SUD Group, TUV Nord, Eurofins Group, SGS Group, and Bureau Verita are some of the prominent players leveraging the market growth. Automotive TIC companies offer testing, inspection, and certification services, which is essential to maintain consumer trust. The industry is growing rapidly and is receiving benefits from the stringent government regulations, rising consumer awareness, and increasing demand for automotive players. The automotive segment and automotive TIC industry are both getting advantages as the certification has become a crucial aspect for automotive manufacturers to verify the quality. 

CharIN recognized DEKRA, a European vehicle inspection company, for the first test laboratory for interoperability certification of charging stations for electric vehicles in 2021. Moreover, DEKRA will perform tests like Combined Charging System (CCS) Basic conformance. It will also issue the CCS Basic certificate for charging stations. All of this aims to enhance the user experience. 

Another prominent player, Applus+, acquired IMA Dresden, a leading testing laboratory in Europe. Applus+ is a well-renowned company that offers testing and certification services. Moreover, it also acquired Enertis with the aim to reinforce its position in the renewables segment.

DEKRA, in April 2021, became an MFi Authorized Test Laboratory. The brand was listed as MFi Authorized Test Laboratory that aims to offer selected telecommunications, pre-testing, advisory services for vehicles, CarPlay certification testing, and infotainment system manufacturers, which are licensees of Apple’s MFi program. 

All of these events are contributing to the industry’s growth. Moreover, these are shaping the future of the automotive industry as most consumers rely on these certificates to verify the vehicle quality. Astute Analytica estimates that the global Automotive TIC services market will grow at a compound annual growth rate (CAGR) of 4.8% during the forecast period from 2021 to 2027.

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