The Automotive industry is no exception. Today, consumer demand for Automotive technology innovation is high as never before. However, there’re challenges holding back more intense innovation adoption within the industry. Continuous inventory shortages, rapidly growing demands for online and mobile services and interactive in-car solutions, the EV surge, and engineering talent recruitment and retention are topping the list of these challenges.
As an effective way of solving some of these issues, Tech Outsourcing comes in handy. Through custom software development outsourced to more resourceful locations and specialist providers, automotive companies enhance their R&D expertise and software delivery capabilities, improve quality, increase marketplace speed, generate new know-how, create value for their customers, and drive that value into the business.
In this article, we dive deep into current Romania’s Automotive Technology landscape to explore why Romania is being considered to be an emerging hotspot for the outsourced Automotive technology development.
By outsourcing software development projects to Romania, many EU and North American businesses have the advantage of working with one of the largest and most skilled talent pools in the CEE region. Known for high qualification and potential, flexibility, and language skills, Romania’s ITC professionals have achieved an excellent reputation worldwide. The country’s current legislation even exempts IT professionals from the standard 10% income tax to support the industry growth. Their skills and technological capabilities include Java, JavaScript, C#, HTML, CSS, Angular, React, Python, C ++, .Net, DevOps, Machine and Deep Learning, NLP, Computer Vision, Data Science, Cloud, and Cybersecurity.
According to the National Institute of Statistics, Romania’s ITC sector is the primary driver for the automotive and aerospace industry and Industry 4.0.
With the ongoing pandemic aftermath and new geopolitical challenges like war in Ukraine, Romania’s economic resilience has proven to be efficient. According to a recent study conducted by Ernst&Young on Foreign Direct Investments attractiveness, Romania ranks second among Eastern Europe’s most appealing investment destinations, after Poland. The same study shows that Romania’s automotive and mobility sector is in the top 3 industries that are set to drive the country’s growth in the following years.
With more than 80 years of experience, the Romanian automotive industry has been experiencing continuous growth for years and was valued at $30 billion in 2019. The top outsourcer to Romania’s automotive industry is Germany. Bosch Engineering, a German company, saw the immense potential in the area and opened an R&D center here, investing around €30 million in it. This center develops software, hardware, and products for mechanical engineering in autonomous driving, electric vehicles, and IoT.
As per Romania-Insider, Romania, Romania has 4th largest workforce in the automotive industry in the EU.
The Romanian automotive industry is home to two original equipment manufacturers (OEMs) – Renault Dacia and Ford but also benefits from international investments from companies like Bosch or Porsche Engineering.
Renault Dacia is one of the most technologically advanced companies in the region. Their operations are unique, covering the entire production chain (design-engineering-testing-tooling-manufacturing-logistics-aftersales-financing), making good use of their four operation centers across the country. The French Renault Group spent more than €1.5 billion investing in Dacia 12 years ago, which generates more than 350,000 vehicles per year.
Ford entered the Romanian automotive scene in 2008, purchasing 72.4% of Automobile Craiova, the only owner of Daewoo Automobile Romania. It recently announced that it would invest $300 million into producing a new light commercial car at its Craiova plant in Romania. Since it arrived in 2008, Ford’s total investment in its manufacturing operations in Romania has approached $2 billion.
Romania’s growth potential as seen by investors
According to the 2021 EY Attractiveness Survey in Romania, Timisoara ranks amongst the top 3 cities in the country in terms of foreign direct investments with a total of 11% of FDI projects, after Bucharest, which attracted 33%, and Cluj (12%). However, the 2022 study shows that Timisoara moved up to second place in terms of desirability to FDI projects, now offering a 13.9% preference to investors and Bucharest 38.9%. Timisoara is becoming a desired destination for automotive software development every year.
Among the first companies to leverage the potential in this city was Porsche Engineering, a technology service provider and a subsidiary of the well-known car manufacturer Porsche. The German company opened its second Romanian branch, an R&D center in Timisoara, intending to expand the network of innovation centers to develop future cars that are smart and connected.
“The tech activities of Porsche Engineering in Romania have been a great success story so far. The consistent growth with highly skilled function and software specialists in Cluj-Napoca motivated us to consider expanding to a second Romanian location,” says Dirk Lappe, Chief Technology Officer at Porsche Engineering
At rinf.tech, we have robust Automotive Software Development Business Unit in Timisoara that provides custom development services to some of the leading Original Equipment Manufacturers (OEMs) and Tier 1 providers.
We identified, based on our firsthand experience, that the following types of projects are the highest in demand for outsourcing among automotive companies so far:
The latest trends in the automotive industry, such as autonomous driving, OTA updates, predictive maintenance, v2x connectivity, diagnostics, and security, are mainly based on in-vehicle software functions. Each electric control unit (ECU) must work efficiently for all the other parts to deliver seamless performance. In 2003, Tier 1 automotive suppliers, semiconductor manufacturers, software, and tool suppliers created a consortium called Automotive Open System Architecture (AUTOSAR) that leveraged better coordination between OEMs and Tier 1 suppliers and improved ECU software quality that resulted in reduced development time and costs.
The Automotive Open System Architecture (AUTOSAR) is a software tool that supports tasks about essential automotive functions in the overall context of vehicle system development. AUTOSAR has brought together the knowledge and experience of major automotive manufacturers and suppliers and supports a comprehensive set of automotive use cases. This software platform is suitable for a wide range of statically defined functions used in traditional automotive ECUs with simple or complex features.
AUTOSAR has many practical, real-world applications used in the automotive industry, such as:
From seamless software sharing between teams/companies, design flexibility, and increased efficiency to reduced costs and development type, AUTOSAR has a complete list of advantages that many automotive solutions development teams choose to leverage. The AUTOSAR Adaptive Platform is a more flexible software infrastructure that supports application-type functions and updates for more complex ECUs. Adaptive AUTOSAR allows automobile manufacturers to create systems that run more efficiently and faster. In other words, OEMs can now use this platform to deploy high-tech software features and update them wirelessly as needed.
The automotive industry is expanding rapidly, and new technologies are making their way into supporting this fast-paced development. The need to learn and use systems like AUTOSAR is crucial. Investing in the education system and promoting AUTOSAR technologies more gives the automotive industry a real chance to overcome many challenges like limited talent. Cars of the future will be highly dependent on the technological advancements made by today’s automotive software development engineers.
With its vast history and proven experience, Romania is quickly becoming a top destination for automotive software development outsourcing. From FDI attractiveness to OEMs and Tier 1 automotive companies that choose this country to open engineering and R&D centers. Amongst the main reasons why investors and significant companies choose Romania are:
At rinf.tech, we offer automotive software development expertise backed by many years of experience in automotive technology and custom software engineering services. Did we mention that we speak fluent AUTOSAR?
We help OEMs and Tier 1 automotive companies achieve their technology strategies and are always on top of the digitalization trends. This is an open invitation for you to leverage our vast experience with automotive software development, embedded development, and R&D.
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