The automotive industry is constantly evolving, and one area that is experiencing significant growth is automotive diagnostics.
In the past, automotive diagnostics relied primarily on mechanical inspection and testing to identify issues with vehicles.
However, advances in technology have led to the development of more sophisticated diagnostic tools and techniques.
By 2025, the automotive diagnostic market is expected to continue to grow and evolve as new technologies and innovations emerge.
Overview of the Automotive Diagnostic Market
The automotive diagnostic market is driven by several factors, including increasing vehicle complexity, the need for more accurate and efficient diagnostics, and the growing demand for remote diagnostics and over-the-air updates. According to a report by Grand View Research, the global automotive diagnostic market is expected to reach $51.35 billion by 2025, growing at a CAGR of 5.9% from 2020 to 2025.
According to a report by MarketsandMarkets, the North American automotive diagnostic scan tools market is expected to grow from $2.8 billion in 2020 to $3.9 billion by 2025, at a CAGR of 6.9%.
In the US, the number of registered vehicles has steadily increased from around 204 million in 2002 to over 284 million in 2020, according to data from the US Department of Transportation.
The average age of vehicles on US roads reached a record high of 12.1 years in 2021, according to IHS Markit. This indicates a growing need for diagnostic tools to keep older vehicles running smoothly and to identify potential issues before they become serious.
According to a report by Zion Market Research, the US automotive diagnostic tool market was valued at around $25 billion in 2018 and is expected to reach approximately $49 billion by 2025, growing at a CAGR of around 10.3% between 2019 and 2025.
The US Bureau of Labor Statistics predicts that employment of automotive service technicians and mechanics will grow 4% from 2019 to 2029, which is about as fast as the average for all occupations.
Automotive Diagnostic Tools and Techniques
Diagnostic tools and techniques have evolved significantly in recent years, enabling technicians to more accurately and efficiently diagnose issues with vehicles. Traditional mechanical inspection and testing have been supplemented by electronic diagnostic tools that can quickly and accurately identify issues with a vehicle's various systems.
As vehicles have become more complex, diagnostic tools have also become more specialized. For example, advanced diagnostic tools can now diagnose issues with a vehicle's engine, transmission, brakes, suspension, and other systems. These tools are essential for identifying and addressing issues before they become major problems.
According to a report by Persistence Market Research, handheld scan tools accounted for the largest share of the global automotive diagnostic scan tools market in 2019, with a share of over 30%. This is because handheld scan tools are portable and easy to use, making them a popular choice among technicians.
The same report also found that wireless automotive diagnostic scan tools are expected to grow at the highest CAGR from 2020 to 2030, driven by the increasing popularity of wireless connectivity and the growing trend of using mobile devices for diagnostics.
In 2020, the global market for automotive diagnostic tools and equipment was valued at $27.9 billion, and is expected to reach $37.2 billion by 2027, growing at a CAGR of 4.1% from 2020 to 2027, according to a report by Allied Market Research.
The use of artificial intelligence (AI) and machine learning (ML) in automotive diagnostics is also on the rise. A report by Market Research Future predicts that the global market for AI in automotive diagnostics will grow at a CAGR of 14.2% from 2020 to 2025.
In terms of techniques, predictive maintenance is gaining popularity among automotive manufacturers and service providers. A report by Frost & Sullivan predicts that the market for predictive maintenance solutions in the automotive industry will reach $4.2 billion by 2025, up from $527.3 million in 2018.
Remote Diagnostics and Over-the-Air Updates
One of the most significant trends in the automotive diagnostic market is the growth of remote diagnostics and over-the-air updates. Remote diagnostics enable technicians to diagnose issues with vehicles without the need for physical inspections. Instead, they can access vehicle data remotely and use diagnostic tools to find the issues with their vehicles.
Over-the-air updates allow manufacturers to update software and other systems in a vehicle without the need for a physical service appointment. This trend has become increasingly important as vehicles have become more connected and rely on software to operate. Over-the-air updates can address issues with a vehicle's systems, improve performance, and add new features and functionality.
According to a report by MarketsandMarkets, the market for remote diagnostics is expected to grow from $23.9 billion in 2020 to $38.9 billion by 2025, at a CAGR of 10.2%. This growth is driven by the increasing need for remote diagnostics in the wake of the COVID-19 pandemic, as well as the growing adoption of connected car technologies.
The same report also found that the market for over-the-air (OTA) updates is expected to grow from $3.9 billion in 2020 to $8.3 billion by 2025, at a CAGR of 16.4%. This growth is driven by the increasing demand for OTA updates to address software-related issues and to enhance the functionality of vehicles.
In 2020, 42% of new vehicles sold in the US were equipped with telematics capabilities, according to a report by the International Telecommunication Union (ITU). Telematics allows for remote diagnostics and OTA updates to be performed on vehicles, which helps to improve the efficiency and effectiveness of vehicle maintenance.
A report by McKinsey & Company estimates that the adoption of remote diagnostics and OTA updates could result in a 30% reduction in the cost of warranty claims for automotive OEMs. This is because remote diagnostics can help to identify potential issues before they become serious, while OTA updates can address software-related issues without the need for costly recalls.
The same report also estimates that the adoption of remote diagnostics and OTA updates could result in a 20% reduction in the number of service visits per year. This is because remote diagnostics can help to identify issues that can be resolved remotely, while OTA updates can address software-related issues without the need for a visit to the dealership.
Challenges and Opportunities in the Automotive Diagnostic Market
A report by Transparency Market Research found that the high cost of diagnostic equipment and the lack of skilled technicians are major challenges facing the automotive diagnostic market. The report estimated that the market for diagnostic equipment would grow from $38.4 billion in 2019 to $52.1 billion by 2027, at a CAGR of 4.1%.
Another challenge facing the automotive diagnostic market is the increasing complexity of modern vehicles. According to a report by McKinsey & Company, modern vehicles can have over 100 million lines of code, which makes diagnosing issues more difficult and time-consuming. This complexity also requires technicians to have a higher level of technical knowledge and skill.
However, the same report also identifies opportunities in the automotive diagnostic market, such as the growing demand for connected car technologies and the increasing use of data analytics. McKinsey & Company estimates that the adoption of advanced analytics could result in a 10-20% reduction in diagnostic time and a 5-10% reduction in repair time.
In addition, the increasing adoption of electric vehicles presents a significant opportunity for the automotive diagnostic market. According to a report by Allied Market Research, the market for electric vehicle diagnostic tools is expected to grow from $325.9 million in 2019 to $598.5 million by 2026, at a CAGR of 8.3%. This growth is driven by the increasing adoption of electric vehicles, which require different diagnostic tools and techniques than traditional gasoline-powered vehicles.
Another opportunity in the automotive diagnostic market is the increasing demand for mobile diagnostic services. A report by Grand View Research estimates that the market for mobile diagnostic services will grow from $475.6 million in 2020 to $771.4 million by 2027, at a CAGR of 6.9%. This growth is driven by the convenience and flexibility of mobile diagnostic services, which can save customers time and money by avoiding the need to take their vehicles to a dealership or repair shop.
Future of the Automotive Diagnostic Market
Looking to the future, the automotive diagnostic market in the US is expected to continue to grow and evolve as new technologies and innovations emerge. In addition to remote diagnostics and over-the-air updates, there are several other trends that are expected to shape the market in the coming years.
According to a report by Grand View Research, the global automotive diagnostic scan tools market size is expected to reach $53.6 billion by 2025, growing at a CAGR of 5.9% from 2019 to 2025. This growth is driven by the increasing complexity of modern vehicles and the growing demand for connected car technologies.
The same report also predicts that the market for remote diagnostics and over-the-air updates will continue to grow, as more vehicles are equipped with connected car technologies. By 2025, it is estimated that over 90% of new cars sold will be connected cars.
In addition, the adoption of artificial intelligence (AI) and machine learning (ML) is expected to transform the automotive diagnostic market by 2025. According to a report by McKinsey & Company, the use of AI and ML in the diagnostic process could reduce diagnostic time by up to 50%.
Finally, the increasing demand for data analytics and real-time monitoring is expected to drive the growth of the automotive diagnostic market by 2025. According to a report by MarketsandMarkets, the market for automotive data analytics is expected to reach $5.1 billion by 2025, growing at a CAGR of 25.2% from 2020 to 2025.
Conclusion
To sum up, the automotive diagnostic market is expected to grow significantly by 2025, driven by increasing vehicle complexity and demand for advanced diagnostic tools. However, challenges such as a shortage of skilled technicians and rapidly evolving technology must be addressed. Overall, there are significant opportunities for manufacturers to succeed in this market through continued investment in research and development.
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Name-Tim Miller
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Source: Story.KISSPR.com
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