Automotive On-Board Diagnostics (OBD) Market

The global Automotive On-Board Diagnostics (OBD) Market is valued at USD 55.4 Billion in 2023 and is projected to reach a value of USD 134.2 Billion by 2032 at a CAGR (Compound Annual Growth Rate) of 10.3% between 2024 and 2032.

Key highlights of Automotive On-Board Diagnostics (OBD) Market

• North America led the Automotive On-Board Diagnostics (OBD) market and contributing to the largest revenue share of 34.2% in 2023
• The Asia Pacific is expected witness remarkable market growth during the forecast period
• In 2023, the Handheld segment accounted to express the largest revenue share of 41.3%
• The Fleet Management segment asserted the maximum Automotive On-Board Diagnostics (OBD) market growth in 2023
• Passenger Vehicle led the Automotive On-Board Diagnostics (OBD) Market with revenue share of 46.7% in 2023
• The increasing advancement and new product launch by leading players are augmenting the growth of the Automotive On-Board Diagnostics (OBD) market in recent years. For instance, Innova Electronics Corporation introduced its latest software and firmware release for current generation OBD 2 scanner tools and dongles.

Automotive On-Board Diagnostics (OBD) Market: Regional Overview

North America accounted to have largest revenue share of 34.2% in 2023. The growing focus on pollution control and government requirements related to car safety and emissions are the crucial factors responsible in driving the growth of the Automotive On-Board Diagnostics (OBD) market in North America. For instance, The U.S. Department of Transportation's (DOT) National Highway Traffic Safety Administration (NHTSA) mandates vehicle fuel economy related regulations, while the U.S. Environmental Protection Agency (EPA) augmented greenhouse gas (GHG) emission regulations. These regulations enforced by various governments enables the development of advanced Automotive On-Board Diagnostics (OBD) systems which offer sophisticated diagnostic capabilities. This helps in monitoring real-time engine performance, emission levels, and exhaust system functionality that enables timely detection and resolution of emission-related issues.

U.S. Automotive On-Board Diagnostics (OBD) Market Overview

United States holds a substantial market share due to the presence of well-known automakers and the rapid adoption of autonomous vehicles, which increases the demand for Automotive On-Board Diagnostics (OBD) equipment like the OBD2 scanner. With emission standards becoming stricter, Automotive On-Board Diagnostics (OBD) systems are evolving to offer precise emission measurements, detect diagnostic trouble codes (DTCs), and monitor emission-related systems effectively. For instance, guidelines issued by organizations like the California Air Resources Board (CARB) provide manufacturers with detailed templates for reporting testing outcomes required by Automotive On-Board Diagnostics (OBD) regulations. These advancements in Automotive On-Board Diagnostics (OBD) technology contribute significantly to environmental sustainability by helping vehicles meet emission standards more effectively.

Automotive On-Board Diagnostics (OBD) Market: Diagnostic Device Overview

In 2023, Handheld segment generated a significant revenue of 41.3%. The Diagnostic Device segment is divided into Handheld, PC/Laptop Based, Mobile Device, and Others. These devices have simple navigation menus and user-friendly interfaces since they were designed with user-centric design concepts in mind. They are designed to serve a wide range of users, from experienced technicians to first-time car owners with little technical knowledge, and they require very little training. Furthermore, incorporating wireless communication features like Bluetooth or Wi-Fi into sophisticated handheld diagnostic instruments completely changes the diagnostics industry. This invention enables smooth connectivity with smartphones, tablets, or other gadgets, enabling users to view diagnostic data remotely, update software, and request technical assistance from suppliers or manufacturers. One prime example of this is the BlueDriver OBD II Scan Tool, which perfectly combines cutting-edge technology with simple user interface.

Automotive On-Board Diagnostics (OBD) Market: Application Overview

The Fleet Management segment accounted to mention the largest market growth in 2023. The Application segment covers Driver Behavior Monitoring, Emission Testing, Supplementary Instrumentation, Consumer Telematics, Usage Based Insurance, Fleet Management, Car Sharing, and Others. Fleet management organizations are embracing cutting-edge OBD and telematics technologies to oversee their vehicle fleets. With various capabilities, such as location tracking, fuel consumption monitoring, and service scheduling, it can be remotely access real-time vehicle diagnostic and location data. With the help of these automotive advancements, fleet managers are enhancing their analytical capabilities. They can now monitor various vehicle metrics, including idle status, fuel levels, occupancy, and overall health. This transformation in technology empowers fleet managers to take informed decisions and optimize their operations for greater efficiency and performance.

Automotive On-Board Diagnostics (OBD) Market: Vehicle Type Overview

The Passenger Vehicle segment led the Automotive On-Board Diagnostics (OBD) market with revenue share of 46.7% in 2023. The Vehicle Type segment covers Passenger Vehicle, Light Commercial Vehicle, and Heavy Commercial Vehicle. The market's growth is attributed to the need for effective diagnostics due to the growing popularity of electric vehicles, data security, privacy concerns, and the increasing use of advanced driver assistance systems like lane departure warnings and automated emergency braking. According to IEA, from 2017 to 2022, EV sales jumped from around 1 million to more than 10 million. EV sales took five years, from 2012 to 2017, to grow from around 100,000 to 1 million. This surge in demand for EVs created various opportunities for developing onboard diagnostics software in the coming years.

The global Automotive On-Board Diagnostics (OBD) market can be categorized as Diagnostic Device, Application, Vehicle Type, and Region.

Key Trends

• Cloud-based OBD solutions are witnessing significant advancements, offering scalability, flexibility, and real-time data access. These solutions enable centralized data storage, analysis, and management, facilitating remote diagnostics, predictive analytics, and fleet management applications.
• With the growing connectivity of vehicles, cybersecurity has become a critical concern in the Automotive On-Board Diagnostics (OBD) market. Manufacturers are increasingly focusing on implementing robust security measures to protect OBD systems from cyber threats, unauthorized access, and data breaches, ensuring the integrity and confidentiality of vehicle data.
• The integration of advanced sensor technologies such as accelerometers, pressure sensors, and temperature sensors into OBD systems is a key trend. These sensors enable more accurate monitoring of vehicle parameters, enhancing diagnostic capabilities and enabling proactive maintenance.
• Wireless connectivity options such as Bluetooth and Wi-Fi are becoming increasingly prevalent in Automotive On-Board Diagnostics (OBD) systems. This trend allows for seamless communication between OBD devices and smartphones, tablets, or other electronic devices, facilitating remote access to diagnostic data and enabling over-the-air updates.

Premium Insights

Integrating the ADAS calibration solution helps enhance diagnostic capabilities and enable proactive maintenance. For instance, Autel’s new ADAS calibration system, MA600 MaxiSYS, helps shops affordably target a new revenue stream. This solution provides accurate calibration procedures for camera-based systems with accessories and oversized AVM patterns available to purchase separately. Thus, the introduction of advanced technologies is augmenting the growth of the onboard diagnostics solution in the automotive sector.

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Market Dynamics

The Automotive On-Board Diagnostics (OBD) market is driven by the growing automobile industry

The growing automotive industry is expected to propel market growth during the forecast period. An expanding automotive sector results in an increased number of automobiles on the road, hence expanding the market for onboard diagnostics products and services. As more automobiles are produced and sold, there is a larger potential market for OBD-related solutions. For instance, the National Automobile Dealers Association (NADA) reported that 15.46 million new light-vehicle units were sold in 2023, a 12.4% increase from 2022.

Increasing demand for telematics from commercial vehicle fleet drives the market

The rapid industrialization across continents has resulted in an increase in trade activities, leading to a higher number of commercial vehicles on the roads. As the commercial vehicle fleet continues to expand, the demand for telematics solutions among fleet owners has grown significantly. Telematics solutions are being used to manage vehicle health and minimize downtime efficiently. This increased interest in telematics among commercial vehicle fleet owners is driving the growth of the global Automotive On-Board Diagnostics (OBD) market.

Competitive Landscape

In the competitive landscape of the Automotive On-Board Diagnostics (OBD) Market, Bosch's latest offering, the Bosch KTS 250 diagnostic tester, stands out as a versatile solution tailored for mobile and straightforward workshop use. This compact and robust device caters to small automotive workshops, offering flexibility for use at vehicle reception areas or as an additional tool in more extensive workshops. Competing against Bosch is Innova Electronics Corporation, a leading supplier of test equipment and diagnostics, with its launch of the Innova 7111 Smart Diagnostic System (SDS) diagnostic tablet. Innova's innovative approach aims to streamline diagnostic processes and facilitate efficient problem identification and resolution for today's vehicles.

The key players in the global Automotive On-Board Diagnostics (OBD) market include - AVL DiTEST GmbH, Continental AG, 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., Denso Corp., HELLA GmbH and Co. KG among others.

Recent Market Developments

• In October 2023, AVL DiTEST is investing over 15% of its revenue towards research and development efforts aimed at creating solutions for examining vehicles equipped with alternative propulsion systems.
• In July 2023, Innova Electronics Corporation introduced its Smart Diagnostic System (SDS) tablets and RepairSolutionsPRO app, offering original equipment (OE)-level diagnostics. These products are included in Innova's latest range of professional automotive solutions, developed in collaboration with ASE-certified technicians, automotive repair students, and longstanding Innova customers.
• In April 2023, Vector Informatik GmbH provided a toolchain tailored for the latest diagnostic standard ZEVonUDS (SAE J1979-3), facilitating Automotive On-Board Diagnostics (OBD) (Automotive On-Board Diagnostics (OBD)) for electric vehicles (EVs), zero emission vehicles (ZEVs), and plug-in hybrid electric vehicles (PHEVs).