DIAGNOSTIC SCAN TOOLS MARKET ANALYSIS

The global Diagnostic Scan Tools Market size was valued at US$ 32.71 Billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 7.0% from 2023 to 2030. Automotive industry has witnessed momentous transformations in the past couple of years. Moreover, the automotive repair and maintenance industry has also seen significant advancements. Automotive diagnostic tool is an essential resource for any automotive repair and maintenance shop. A proper automotive diagnostic tool market could help in saving a lot of time while diagnosing any complex part of the vehicle. Various automotive diagnostic tool manufacturers are trying different approaches to integrate innovative technologies along with the cost reduction.

Global Diagnostic Scan Tools Market: Regional Insights

Among the Asia pacific countries China is expected to be the world's fastest-growing automotive market, with the presence of big automotive manufacturers such as Hyundai, Honda, Toyota and other.

The need for automotive diagnostic tools is likely to rise as manufacturers in China, Japan, and South Korea to boost the R&D initiatives to develop technologically advanced automotive like connected cars, electric vehicles and autonomous vehicles. The China 6 OBD rules are comparable to the California OBD II laws, but with minor differences that omit a few monitoring obligations to reduce compliance obligations on automakers. The China 6 regulations also include allowances for OBD system inadequacies, exempting automobiles from installing all monitoring systems. In 2002, Japan enacted legislation requiring the installation of basic OBD systems.

Growing stringency of regulations regarding emission and economy standards, primarily in North America, Europe to reduce carbon emission have led to increasing demand for effective maintenance of the vehicles. For instance, U.S. Environmental Protection Agency, lists the federal emission and related sulfur standards, require utilization of advanced components and engine architecture. According to Coherent Market Insights’ analysis, number of ECUs in a high end or luxury cars can reach up to 150. Requirement to efficiently diagnose the problems with the help of diagnostic scan tools is expected to be among the prominent growth drivers of the market. Moreover, ability of the advanced systems to diagnose problems in multiple automotive models utilizing a single scanner has also led to significant increase in adoption of the systems at service centers is fueling growth of the global diagnostic scan tools market.

Figure 1: Global Diagnostic Scan Tools Market Share (%), By Region, 2022

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Global Diagnostic Scan Tools Market Drivers:

Rising demand and sale of passenger cars

The market for diagnostic scan tools is expected to grow with the increase in sales of passenger vehicles. Passenger vehicle sales have surged, with growth in all three top auto markets: China, the US, and Europe. Factors such as growing demand for low emission commuting and governments supporting vehicle inspection mandates have compelled the manufacturers to provide automotive diagnostic scan tools around the world. Passenger car is the fast-growing segment in the automotive market and is expected to witness significant growth during the forecast period. According to Coherent Market Insights, in India, sports utility vehicle (SUV) sales in 2022 were 1.47 million units, and SUV market share went from 38.2 percent to 41.7 percent in 2022. Hence, the increasing sales of passenger vehicles such as sedans, hatchbacks, sports utility vehicles, and others are driving the growth of the global commercial fleet tire market.  This has led to a growing demand for automotive diagnostic tools in the market. The Passenger Cars market is generally influenced by the distribution of wealth within a country or region and serves as a good indicator when it comes to financial stability. The growth of automotive diagnostic scan tools market is driven by rapid urbanization in emerging economies that have led to the increase in demand for personal motor vehicles.

Growing demand of Do-it-yourself (DIY)

High growth rate of vehicle per thousand inhabitants coupled with limited number of authorized service centers and workshops have in turn led to significant demand for do-it-yourself kits. As Do-it-yourself (DIY) kits can be easily operated and are highly preferred among the populace, which has led to increase in demand for these kits. However, high preference of DIY kits has led to significant reduction in demand for diagnostic equipment, which in turn hampers the overall diagnostic scan tools market growth over the forecast period.

Global Diagnostic Scan Tools Market Opportunities:

Growing trend towards vehicle tracking management

Growing trend towards vehicle tracking in fleet management In Japan, the vehicle tracking application is anticipated to showcase a substantial growth rate during forecast period as vehicle owners in the japan are transitioning toward leveraging automotive diagnostic scan tools market. In addition, Stringent government regulations related to passenger and vehicle safety are driving the market demand for integrated vehicle tracking in new vehicles. Additionally, old vehicles are being retrofitted with vehicle tracking systems in service stations owing to increasing customer requests, further fostering the revenues of vehicle tracking is expected to create more opportunities in the market.

Growing popularity of vehicle diagnostic solutions

The diagnostic scan tools market is driven by increased demand for high-quality vehicle diagnostic solutions, which is led by rising vehicle manufacturing in regional automotive hubs. The region also has a favorable business regulatory framework for electric vehicles and alternate fuel automotive. In 2021, the regional electric vehicle industry registered one million electric vehicle sales compared to five million electric vehicles worldwide. OEMs are deploying complex electronic circuits to ensure the smooth functionating of connected & electrified powertrains, which is likely to strengthen the market growth over forecast period.

Global Diagnostic Scan Tools Market Trends:

Growing technological advancement

The trend towards wireless and cloud-based solutions May diagnostic scan tool have ability to connect wirelessly to a vehicles onboard computer allowing faster and more convenient diagnostic. Additionally many diagnostic scan tools now offer cloud-based diagnostic services that allows technicians to access and analyze data from multiple vehicle and locations

Global Diagnostic Scan Tools Market Restraints:

High Initial cost

High initial cost of advanced diagnostic tools with constant advancements in vehicle computer technology, workshops require more sophisticated scan tools to keep up, but most workshops cannot afford them all. Diagnostic scan tools have witnessed a decline in their overall price levels. However, newer technologies are more expensive than conventional OBD-I systems. This can reduce the demand for newer and innovative technologies. Diagnostic scan tool manufacturers are under constant pressure from original equipment manufactures (OEMs) to curtail the prices of diagnostic scan tool equipment.

Many manufacturers hesitant to invest in R&D activities due to high costs, particularly in emerging countries, wherein OEMs are focusing on launching new models with basic diagnostic scanning systems. Since automobiles must successfully meet stringent safety regulations, automotive diagnosis requires highly sophisticated instruments and equipment, which add to the overall cost. The equipment also needs to be updated whenever there are changes in regulations.

Figure 2: Global Diagnostic Scan Tools Market Share (%), By Vehicle Type, 2022

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Global Diagnostic Scan Tools Market Segmentation:

The global Diagnostic Scan Tools Market report is segmented into deployment, tool, organization size, and end user.

Based on type includes hardware and software. Diagnostics hardware includes tester, code reader, analyser, scanner and others. Diagnostics software includes vehicle system testing software, Based on the product type, diagnostic equipment (hardware) segment was dominant in the global diagnostic scan tools market share in 2021, and is expected to continue its dominance over the forecast period. This aids in fault detection reliance on the analog and digital components to enable functionality of such devices. However, software segment is expected to witness highest growth over the forecast period, as software analyzes the complex codes to perform diagnosis of powertrain, chassis, and the body. Additionally, introduction of compact tools to reduce space footprint and incorporation of wireless communications is expected to significantly contribute to growth of the market.

Global Diagnostic Scan Tools Market: Key Developments

In March 2021, Bosch, automotive accessories manufacture announced expansion of its next generation of advanced automotive diagnostic scan tool portfolio with the new ADS 625X. The ADS 625X includes a multipurpose docking station that charges the tablet and powers the VCI, providing seamless wireless updates and access to repair information without needing to be connected to the vehicle.

In May 2019, Pitstop and Continental announced partnership and plans to develop a pilot test program to deliver connected car prognostics and remote vehicle diagnostics to the automotive aftermarket.

Global Diagnostic Scan Tools Market: Key Companies Insights

The market players operating in the market are focusing on product launch and merger, acquisition strategies to expand the global presence

Some of the key players in the global Diagnostic Scan Tools Market are Actia SA, AVL List GmbH, Continental AG, Delphi Automotive PLC, Denso Corporation, Hickok Incorporated, Kpit Technologies, Robert Bosch GmbH, Snap on Incorporated, and Softing AG

*Definition: Diagnostic Scan Tools a vehicle diagnostic device that can be used to read the error memory and data that is recorded on your vehicle systems. Basically, an On-Board Diagnostic (OBD) reader allows you to establish a connection between your car and a mobile app or diagnostic software.