This report provides Transforma Insights’ view on the Vehicle Diagnostics market. This segment comprises two Applications: Vehicle Diagnostics Head Unit and Vehicle Diagnostics Aftermarket.
Vehicle Diagnostics is an important feature that enables manufacturers and vehicle owners to identify faults and issues that may be systemic across their vehicles or fleets at an early stage. The market is dominated by the diagnostics features built into vehicles by the OEMs and accessed and connected via the Vehicle Head Unit. The provision of such services helps OEMs maintain a relationship with their customers and represents an additional service to add to a chargeable connected vehicle offering. The owners benefit from real-time updates on vehicle condition, reduced maintenance cost and servicing time. For the OEMs, it’s also another way of advertising new products, services, and benefits to existing customers. For instance, Mercedes Benz persuades customers to service their cars at authorised car dealerships to avail themselves of benefits in the form of discounts and free diagnosis.
Aftermarket devices are usually purchased by vehicle owners or technicians. These devices can be plugged into the OBD-II port and are typically equipped with Short Range technology such as Wi-Fi and Bluetooth. As vehicles become more complex, fault identification will become increasingly challenging, and diagnostics devices will be increasingly required. Home mechanics will purchase these devices to avoid paying additional fees for vehicle servicing.
The report provides a detailed definition of the sector, analysis of market development and profiles of the key vendors in the space. It also provides a summary of the current status of adoption and Transforma Insights’ ten-year forecasts for the market. The forecasts include analysis of the number of IoT connections by geography, the technologies used and revenue.
A full set of forecast data, including country-level forecasts, sector breakdowns and public/private network splits, is available through the IoT Forecast tool.
This section of the report briefly explains the two main categories of the vehicle diagnostic market – vehicle diagnostics head unit and aftermarket devices. The report examines key factors that are influencing the development of the market, including:
This section argues that since most vehicles are already enabled with cellular connectivity when they are produced, OEMs can remotely monitor such vehicles.
This subsection first explains why manufacturers enable vehicle diagnostics and maintenance features in their connected vehicles. For example, this feature identifies defects in vehicles much before they become major issues. This enhances the reliability of vehicles, which is a high priority for many prospective purchasers these days.
This point discusses how remote diagnostics and monitoring of vehicles ensure continuous revenue streams for manufacturers (especially from servicing vehicles) and allow them to better engage with their customers. Besides, users are also encouraged to visit manufacturers’ service centres, instead of independent alternatives, thereby enhancing long-term revenue opportunities for the manufacturers.
This subsection explains why the capability of remote update of software in vehicles is gradually becoming crucial for OEMs (since remote updating ensures a more convenient and time-efficient approach to recalls, which is allowed by the vehicle diagnostics application). Besides, using OTA updates, OEMs can save a significant amount as well. For instance, it is anticipated that OEMs saved nearly USD500 million from OTA recalls in the United States in 2023.
This subsection explains how the increasing number of autonomous vehicles (which, according to Transforma Insights’ estimates - should be around 23.66 million by 2025) will dramatically reduce the likelihood of fault detection by users themselves, which in turn, will increase the use of vehicle diagnostics devices – for better maintenance of autonomous vehicles.
This subsection discusses some of the pressing issues that may hamper the adoption of vehicle diagnostics devices, such as improvements in vehicles’ reliability in recent years and increasing privacy challenges. For instance, in 2016 the Tesla Model S’ in-vehicle security was sabotaged, which led the firm to introduce a security code sign-in protection.
It also provides a few examples of relevant IoT deployments in this application, such as Hyundai and Kia recalling 240,000 vehicles diagnosed with multiple defects.
This section first charts the reasons why vehicle owners and home mechanics purchase external or aftermarket diagnostic tools that can be attached to vehicles’ OBD-II ports. It then talks about the basic functionality of aftermarket devices and the connectivity technology they use. For instance, aftermarket devices can monitor and diagnose vehicles’ health and alert drivers about maintenance requirements.
It then focuses on the subscription-based services for these devices that many aftermarket vendors offer and claims that the cost of these services depends on capabilities and use cases. To prove this claim, it comparatively analyses ALLDATA Diagnostics, which is a subscription-based vehicle diagnostics service for professional use and Carly OBDII (meant for the consumer market), and compares the functions, features, and subscription rates of these two respective solutions. It also talks about how diagnostic devices are useful for professional mechanics (since many of these scanning tools provide access to a real-time repair database with repair-specific videos and service information).
It also discusses a few relevant products in this application (such as Launch X431 Pro Elite scanner, Carman Auto-I 100, and Carista OBD Scan Tool Generation2), and talks about their functions, features, and subscription costs.
The key vendors section lists some of the main providers of products and services related to the market such as Autel, Hyundai, Tesla, Launch Technology Company, Actia Group, and Bosch. The report provides profiles of the various vendors including aspects most relevant to this Application Group, such as product offerings, pricing, financial results, and technology.
In the market forecasts section, we provide a summary of the forecasts from the Transforma Insights IoT Forecast Database:
The report charts the growth in the number of devices, which will grow from 21.9 million in 2023 to 26.6 million in 2033. Transforma Insights forecasts are compiled on a country-by-country basis. This report includes a regional summary, showing splits between Australasia, Greater China, North America, Europe, Japan, Latin America, MENA, Russia & Central Asia, South East Asia, South Korea, India & South Asia, and Sub-Saharan Africa.
Transforma Insights’ IoT forecasts include splits between the various connectivity technologies as follows: 2G, 3G, 4G, 5G mMTC, 5G non-mMTC, LPWA (non-mMTC), Satellite, Short Range, and Other.
This section discusses which technologies will be used in the vehicle diagnostics application group.
This part of the report discusses the market growth in terms of revenue (module revenue, service wrap revenue, and VAC revenue). Transforma Insights estimates that the revenue in the Vehicle Diagnostics Application Group will grow at a CAGR of 11.36%.
