Vehicle Diagnostics Market

Vehicle Diagnostics Market Size - (2023-2028):

The Global Vehicle Diagnostics Market was worth US$ 34.86 billion in 2022 and is anticipated to reach a valuation of US$ 92.17 billion by 2028 and is predicted to register a CAGR of 17.85% during 2023-2028.

The Vehicle Diagnostics market comprises investigative solutions that are used to analyze the state of functions performed by sensors, electrical, and electronic systems to enhance the proper functioning of vehicles. It is a part of the auto services utilized in the service stations. The vehicle diagnostic system identifies and overcomes the problems associated with performance and operational efficiency. It has wide applications in the automotive industry.

Market Drivers

The growing production volume of vehicles is expected to push the global vehicle diagnostics system market during the forecast timeframe. Rising awareness among consumers, vehicle manufacturers, and vehicle service providers regarding safety and security in recent years is anticipated to boost the vehicle diagnostics system market in the coming years. Rising demand for the premium segment of passenger cars due to the shifting consumer preference for luxury cars equipped with the latest high-tech features is estimated to fuel the global vehicle diagnostics system business during the outlook period.

Market Restraints

A key factor restricting the global vehicle diagnostics market is data security and privacy concerns. Additional data must be diagnosed on a real-time basis owing to the increased number of electronic components in the vehicle. The need to send real-time information to the system would bring about the threat of cybersecurity. It would severely affect the market. Another factor hindering market growth is the stringent regulations by several governments for fuel economy. Some minor mechanical problems are likely to be there in the vehicle, for which the vehicle diagnostics system may not certainly show an error. Such inaccuracy may also restrict the demand for these products worldwide. 

Market Recent Developments

• In October 2018, Denso Corporation announced that they had acquired Ease Simulation Inc. After this acquisition, Ease Simulation Inc. will be merged with Denso Products and Services Americas, Inc.
• In October 2017, Repairify, Inc. announced that they had completed the purchase of Professional Automotive Diagnostics. After the acquisition, Repairify, Inc. will be integrated into the asTech business brand of Repairify, Inc.

VEHICLE DIAGNOSTICS MARKET REPORT COVERAGE:

Market Segmentation

Vehicle Diagnostics Market - BY Function:

• Engine Control
• Battery and Charging

The engine control diagnostic segment holds a significant share of the market. Engine components must be analyzed regularly to be positive about the engine condition. Therefore, the engine control diagnostic system is generally equipped in automobiles. Another segment based on function is the battery and charging system. As the demand for electric and hybrid cars is growing, the demand for battery and charging diagnostic systems also increases.

Vehicle Diagnostics Market - By Application:

• Automatic Crash Notification
• Vehicle Tracking
• Vehicle Health Alert

The roadside assistance segment dominated the market and is estimated to be the largest shareholder during the foreseen period. The high requirement for roadside assistance as a standard feature in vehicles is attributed to its advantages, including service at the time of a vehicle breakdown, emergency support, and sending a mechanic in case of critical failure. Such applications are witnessing substantial growth, with regulatory bodies planning to mandate some of the applications. 

Vehicle Diagnostics Market - By Connectivity:

• 3G
• 4G/LTE
• Wi-Fi
• Bluetooth

The Bluetooth segment is estimated to grow at a notable growth rate during the anticipated timeframe. Directly connecting to any of the network modes enhances the chances of hacking the system. If the system gets hacked, the hacker can gain direct control over the vehicle, cut off the brakes, disable the transmission, or lock the driver inside the car. Other network connectivity drawbacks are expected to provide promising opportunities for Bluetooth connectivity for vehicle diagnostics soon.

Vehicle Diagnostics Market - By Sales Channel:

• OEMs
• Aftermarket

The OEM segment holds the leading market share due to the long-term agreement between the vehicle manufacturers and the component suppliers.

Market Regional Analysis:

The Global Vehicle Diagnostics Market Report includes the segmentation of regions:

• North America
• Europe 
• Asia Pacific
• Latin America 
• Middle East and Africa

Most of the product demand in the Asia Pacific region is fulfilled by China, India, South Korea, and Japan. In 2018, China was one of the leading countries in the Asia Pacific region as well as globally. China is the largest automotive market, with 300 million cars on the road and production of 24.8 million vehicles in 2017, compared to 11.2 million in the U.S., 8.4 million in Japan, almost 5.7 million in Germany, and 4 million and 3.7 million vehicles in India and South Korea, respectively.

North America and Europe are at the forefront of the technology and are anticipated to control a larger share in the global vehicle diagnostics market. The latest technological advancements in the region are the key factor contributing to the development of this market.

North America has stringent norms for emissions, vehicle safety, and fuel economy globally, which is the crucial factor driving the regional market. In the Asia Pacific, the vehicle diagnostics market is estimated to grow at a higher CAGR due to the increasing demand for automobiles and ever-increasing awareness about road safety. In the Asia Pacific, the market is anticipated to grow at a higher rate in China, Japan, and South Korea.

Impact of COVID-19 on the Vehicle Diagnostics Market:

The unexpected disruption of the coronavirus pandemic has occurred suddenly and imposed a considerable impact on the vehicle diagnostics market. It has been noticed that the impact of COVID-19 could make consumers more risk-averse to higher-priced vehicles and new technologies, which hampers vehicle diagnostics market growth in the current scenario. For instance, China is the largest manufacturer and exporter of renewable energy sources, which supplies the main inputs in the form of batteries used to manufacture electric vehicles. However, due to the unprecedented coronavirus situation, the current production is at a halt in China. It is ultimately affecting other electronic producers based in Europe, the U.S., and other countries, which creates a gap between private vehicle demand and supply. On the contrary, to overcome this pandemic situation, the Indian Government is investing in a policy named "Niti Aayog," which helps achieve sustainable development by encouraging EV imports.

Leading Company

OnStar LLC is currently the market leader and has adopted expansion as a critical strategy to gain traction in emerging markets. For instance, in 2016, the company entered the Argentinian market to expand its South American presence.

Market Key Players

Some of the key players operating in the global vehicle diagnostics market are

1. Robert Bosch GmbH (Germany)
2. Delphi Automotive PLC (U.K.)
3. Continental AG (Germany)
4. OnStar LLC (U.S.)
5. Voxx International Corporation (U.S.)
6. Snap-On Inc. (U.S.)
7. Magneti Marelli S.p.A (Italy)
8. Softing AG (Germany)
9. Vector Informatik GmbH (Germany)

The companies mentioned above have been concentrating on new product development and collaborating with key local organizations to expand their global market presence.