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The global automotive on-board diagnostics (OBD) market size is estimated to grow by USD 62.49 billion, at a CAGR of 24.27% between 2023 and 2028. The automotive electronics market has experienced remarkable growth driven by an expanding array of consumer demands and original equipment manufacturer (OEM) offerings. These demands encompass safety, performance, stability, and comfort, compelling the market to outpace the growth of the traditional automotive sector. Conventional mechanical components alone are inadequate to address the evolving challenges in the automotive industry. Electronic components play a pivotal role in meeting these demands, offering specialized features that distinguish products. With the inevitability of automotive electrification, there's a projected surge in software implementation within vehicular systems, indicating a future trajectory toward enhanced electronic integration. The market forecasting report also includes an in-depth analysis of drivers, trends, and challenges.
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In the era of the information age, automotive technology is at the forefront, with wireless communications and in-vehicle electronics revolutionizing the driving experience. Central to this transformation is Automotive On-Board Diagnostics (OBD), enabling real-time data transmission and driver behavior monitoring. OBD technology encompasses a wide range of solutions, from location technology and fleet management to emission testing and vehicle maintenance. Insurance carriers leverage OBD data to assess risk portfolios and offer tailored coverage, while the connected car ecosystem integrates consumer telematics for enhanced vehicle connectivity. With a diverse array of OBD aftermarket products, including OBD scanner tools and diagnostic devices, the market caters to both handheld and PC/laptop-based solutions. As automotive production embraces the Internet of Things, supplementary instrumentation and fleet management tools play a pivotal role in optimizing vehicle customization and ensuring efficient fleet management operations. Our researchers analyzed the data with 2023 as the base year and the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The increase in the adoption of usage-based insurance (UBI) using OBD as a measurement parameter is the key factor driving market growth. Align with market growth and trends, the automotive insurance industry is expected to grow with the increase in vehicle production globally. As the complexity of vehicles is also increasing, automotive insurance providers are exploring various options that help achieve accuracy in insurance claims. One such method is usage-based insurance (UBI), which is gaining popularity among insurance providers. In this method, an insurance provider defines the premium for the insurance subscription based on the driving pattern of the driver. This pattern is measured by the data provided by the OBD system.
Further, the OBD system provides data points, such as braking system data, speed data, and driving patterns, based on which the insurance provider decides the premium on the insurance cover. UBI is popular in Europe and the US, and insurers are making profits from this concept. The integration of telematics, along with OBD, has helped insurers in procuring adequate information, thereby helping in obtaining accurate data based on usage. This is helping in market pricing for insurers.
The growing focus on remote diagnostics will fuel the market growth. Remote OBD systems diagnose a fault or a potential malfunction in the component of a vehicle and transmit the relevant trouble codes to a remote data center. The data center then collects the data in software or application-compatible formats that help interpret the data and later sends them across to the respective driver or technician.
Moreover, remote diagnostics is a valuable tool, as it helps in preventive maintenance and scheduling vehicle service cycles, which helps in reducing vehicle downtime and breakdowns. The use of remote diagnostics is gaining popularity among OBD system manufacturers. This can be attributed to the increasing demand for these systems from fleet operators of both passenger cars as well as commercial vehicles. This is expected to continue during the forecast period.
The increase in the cost of integrating telematics is a major challenge to the market growth. The growth of the global automotive OBD market can be largely attributed to the market dynamics of telematics applications and services. This stems from the fact that OBD services have been a part of bundled offerings of connected car services. The market for OBD hinges on the low costs (incurred by the customer and OEMs per vehicle) because such applications use the same TCU and hardware components of other connected car offerings. Therefore, a subscription pricing strategy will play a crucial role in the expansion of OBD services. To this end, it is crucial for OEMs to offer OBD systems along with other connected car offerings.
Additionally, the reluctance of customers to pay for such technology poses a significant challenge to market growth. Such customer attitudes prevail especially in the mass market segment. Vehicle variants in which remote vehicle diagnostics are offered as an optional service will require customized pricing strategies that increase their uptake. Both the mid-level and mass vehicle segments may offer remote vehicle diagnostics as an optional offering; therefore, buyers will prefer to choose only the connectivity application that they will generally use.
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Passenger cars dominated the global automotive OBD market in 2022 as these cars have the first-mover advantage, which resulted in deeper penetration. As connected car offerings were introduced initially in the luxury vehicle segment, remote diagnostics achieved maximum penetration in this segment in the form of bundled offerings. During the late 2000s, high-end passenger cars saw a significant increase in the uptake of remote diagnostics; these are now considered standard features.
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The allied services segment showed a gradual increase in market share with USD 15.36 billion in 2018. The industry's need to manage breakdowns with minimum downtime is the key to sustaining competition in the fleet business. This can be significantly achieved by using remote diagnostics solutions. In addition, the need to comply with vehicle emission standards is crucial as these are subject to regular verifications by regulatory and pollution control authorities. Remote vehicle diagnostics can inform fleet managers of any deviations in emissions from the fleet, which makes it possible to schedule maintenance only when and as required.
North America is estimated to contribute 32% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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North America was the largest market for automotive OBD solutions globally. We note that the evolution of the vehicle diagnostics market in this region dated to the 1990s when the US government mandated the implementation of OBD systems. Currently, the automotive OBD market has come a long way since its inception in the US, with innovations and many new companies. These companies are innovating in terms of automotive OBD connectivity, embedded display systems, and telematics. Therefore, remote vehicle diagnostics have gained traction due to the extension of the traditional OBD to becoming a crucial part of connected car offerings, which comprise various telematics applications and services. The market in this region will be driven by feature upgrades and newer business models aimed at developing additional revenue streams for OEMs.
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Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market. One of the major players in the market include:
Autel Intelligent Technology Co. - The company offers automotive OBD such as MaxiSYS ultra EV, MaxiSYS MS909EV, EV diagnostics kit, and MaxiSYS pro model.
The report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified. Furthermore, it is also quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments
In the realm of automotive technology, On-Board Diagnostics (OBD) systems have emerged as indispensable tools for vehicle owners, mechanics, and enthusiasts alike. These systems monitor various aspects of vehicle performance, including mileage, driver behavior data, and vehicular emissions, catering to a wide range of vehicles, from electric vehicles to light commercial vehicles and heavy commercial vehicles. OBD devices, equipped with features like geo-fencing and remote diagnostic solutions, provide real-time vehicle tracking and cloud-based diagnostics. With the advent of 5G implementation and OTA software updates, companies like Sibros are pioneering cloud diagnostic managers to address privacy concerns and ensure data security. From diagnostic devices to telematics solutions, the market spans various segments, including fleet management and usage-based insurance, offering proactive maintenance and early issue detection to minimize financial burdens and warranty disputes. As vehicle technology advances, OBD systems play a pivotal role in enhancing vehicle health and performance, ultimately driving time and cost savings for both car owners and vehicle manufacturers.
Market Scope |
|
Report Coverage |
Details |
Page number |
172 |
Base year |
2023 |
Historic period |
2017-2021 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 24.27% |
Market Growth 2024-2028 |
USD 62.49 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
19.2 |
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
Performing market contribution |
North America at 32% |
Key countries |
US, China, Germany, Japan, and UK |
Competitive landscape |
Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Autel Intelligent Technology Co., AVL DiTEST GmbH, Bridgestone Corp., Continental AG, Dashboard Labs Corps., DENSO Corp., General Motors Co., Hearst Communications Inc., HELLA GmbH and Co. KGaA, Innova Electronics Corp., Intel Corp., iWave Systems Technologies Pvt. Ltd., Marelli Holdings Co. Ltd., Mercedes Benz Group AG, Moj.io Inc., OBD Solutions LLC, Robert Bosch GmbH, Vector Informatik GmbH, Verizon Communications Inc., and Zubie Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Vehicle Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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