Automotive On-Board Diagnostics (OBD) Market by Product, Vehicle Type, and Geography - Forecast and Analysis 2023-2027

The automotive on-board diagnostics (OBD) market is estimated to grow at a CAGR of 18.29% between 2022 and 2027. The size of the market is forecast to increase by USD 35,638.36 million. The growth of the market depends on several factors, including the increase in the adoption of usage-based insurance (UBI) using OBD as a measurement parameter, the increase in electronic content in vehicles, and the regulations mandating OBD systems. 

This report extensively covers market segmentation by product (allied services and OBD port) and geography (APAC, North America, Europe, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021. 

 What will the Size of the Automotive On-board Diagnostics (OBD) Market be During the Forecast Period?

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Parent Market Analysis

Technavio categorizes the global automotive OBD market as a part of the global automotive components and accessories market within the global auto components market. The global automotive components and accessories market covers companies engaged in the production of parts and accessories for automobiles like passenger cars (PCs), electric vehicles (EVs), commercial vehicles (CVs), heavy-duty vehicles, off-road vehicles, motorcycles, scooters, quad bikes, and three-wheelers. The global auto components market is expected to grow at a moderate pace. Technavio calculates the global auto components market size based on combined revenue generated by manufacturers of auto parts and accessories. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.

Automotive On-board Diagnostics (OBD) Market: Key Drivers, Trends, Challenges, and Customer Landscape

The increase in the adoption of usage-based insurance (UBI) using OBD as a measurement parameter is notably driving the automotive on-board diagnostics (OBD) market growth, although factors such as the increase in the cost of integrating telematics may impede the market growth. Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market. Although there has been a decrease in demand for the market during the COVID-19 pandemic, a holistic analysis of drivers will help companies refine marketing strategies to gain a competitive advantage.   

Key Automotive On-board Diagnostics (OBD) Market Driver

The increase in the adoption of usage-based insurance (UBI) using OBD as a measurement parameter is the key factor driving the global automotive on-board diagnostics market growth. 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. 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.

Key Automotive On-board Diagnostics (OBD) Market Trend

The growing focus on remote diagnostics will fuel the global automotive on-board diagnostics 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.

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.

Key Automotive On-board Diagnostics (OBD) Market Challenge

The increase in the cost of integrating telematics is a major challenge to the global automotive on-board diagnostics 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.

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.

Key Automotive On-board Diagnostics (OBD) Market Customer Landscape

Our analysis of the Life Cycle of the market indicates a movement from the innovator’s stage to the laggard’s stage. The report illustrates the lifecycle of the market, focusing on the adoption rates of the major countries including the US, China, Japan, Germany, and the UK. Technavio has included key purchase criteria, adoption rates, adoption lifecycles, and drivers of price sensitivity to help companies evaluate and develop growth strategies from 2022 to 2027.

Global Automotive On-board Diagnostics (OBD) Market Customer Landscape

Who are the Major Automotive On-board Diagnostics (OBD) Market Vendors?                          

Vendors 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 

auteltech.com - The company offers automotive OBD such as MaxiSYS ultra EV, MaxiSYS MS909EV, EV diagnostics kit, and MaxiSYS pro model. Also, through this segment, the company offers automotive intelligent diagnostics, detection, and analysis systems and automotive electronic components such as Professional Tool, TMPS, ADAS, Special Tool, and IMMO Tool.

We also have detailed analyses of the market’s competitive landscape and offer information on 20 market vendors, including :

• AVL DiTEST GmbH
• Bridgestone Corp
• Continental AG
• General Motors Co
• Hearst Communications Inc.
• 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.
• Zubie Inc.
• Dashboard Labs Corps.
• Denso Corp.
• HELLA GmbH & Co. KG

Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak. 

What is the Fastest-Growing Segment in the Automotive On-board Diagnostics (OBD) Market?

The market share growth by the allied services segment will be significant during the forecast period. 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.  

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The allied services segment showed a gradual increase in market share with USD 13159.09 million in 2017 and continue to grow by 2021. 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. Furthermore, our report provides a brief analysis of the historical and forecast market share and their segments along with the reasons for growth from 2017 to 2027.

The growth of this segment is primarily attributed to the increasing adoption of Automotive OBD solutions, which is driven by an increase in the global demand for the Automotive On-board Diagnostics (OBD) Industry.

Which are the Key Regions for Automotive On-board Diagnostics (OBD) Market?

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North America is projected to contribute 32% by 2027. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. 

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. 

This report forecasts the contribution of all the segments to the growth of the market. In addition, we have included the COVID-19 impact and the recovery strategies for each segment. The outbreak of COVID-19 led to a decline in the demand for automotive OBD solutions in North America. In 2020 and 2021, the automotive OBD market in North America witnessed a temporary decline owing to the outbreak of the COVID-19 pandemic. In 2020 and 2021, many end-user sectors, especially commercial end-users such as the construction, automotive, and industrial sectors, partially shut down their operations due to the pandemic. This led to an economic downturn and hindered trade in North America. The temporary shutdown of the industrial and automotive sectors halted their operations, which reduced the manufacturing, installation, and use of OBD tools and ports in 2020 and early 2021. However, in 2021, the mass vaccination drives and other government initiatives resulted in the removal of lockdown restrictions and the partial resumption of industrial activities, with social distancing norms in place and using a limited workforce, which stabilized the growth of the regional market. Such factors are expected to drive the growth of the automotive OBD market during the forecast period.

Segment Overview

Our report forecasts revenue growth at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by product, vehicle type, and region.

• Product Outlook (USD Million, 2017 - 2027)
  • Allied services
  • OBD port 
• Vehicle Type Outlook (USD Million, 2017 - 2027)
  • IC engine
  • Electric vehicle
• Region Outlook (USD Million, 2017 - 2027)
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Columbia

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What are the Key Data Covered in this Automotive On-board Diagnostics (OBD) Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the automotive on-board diagnostics (OBD) market between 2023 and 2027
• Precise estimation of the size of the automotive on-board diagnostics (OBD) market and its contribution to the parent market.
• Accurate predictions about  upcoming trends and changes in consumer behaviour
• Growth of the automotive on-board diagnostics (OBD) market industry across North America, APAC, Europe, the Middle East and Africa, and South America
• A thorough analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive details of factors that will challenge the growth of automotive on-board diagnostics (OBD) market vendors

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