Market Trends of Automotive Diagnostic Tools Industry
Passenger Cars Segment Likely to Witness Significant Growth Over the Forecast Period
- The passenger cars segment of the automotive diagnostic tools market can be attributed to rising passenger automobile sales around the world. In addition, the increasing stringency of pollution and vehicle safety performance regulations in numerous nations further elevate the necessity of these tools in vehicles. Though the COVID-19 pandemic impacted the market negatively due to lockdowns and travel restrictions, post-pandemic consumers preferred personal vehicles over mass transportation services. The market started regaining momentum over the forecast period.
- Worldwide car sales grew to around 67.2 million automobiles in 2022, up from around 66.7 million units in 2021. In 2020 and 2021, a faltering global economy caused the industry to experience a downward trend. In 2022, COVID-19 and the Russian war in Ukraine contributed to shortages in the automotive semiconductor market and additional supply chain disruptions. Despite these challenges, 2023 sales growth is anticipated.
- Further, the favorable government policies across major economies, the United States and Europe mandating the utilization of OBD and growing awareness of the benefits offered by the diagnostic tools are expected to drive demand in the market. Moreover, the trend of integrating innovative features into vehicles due to rising security concerns among end-users and growing complexity in connected cars is expected to further augment market growth during the forecast period. However, the high cost and complexity of scan tools are likely to act as restraints to the growth of the market.
- Manufacturers are focusing on developing reliable and advanced diagnostic tools in order to increase the efficiency of vehicle service and solve challenges during vehicle maintenance. OBD II exhibited itself as the potential tool to solve several challenges during automotive parts monitoring, including catalyst heaters, evaporative systems, air conditioning systems, fuel systems, oxygen sensors and heaters, EGR, thermostats, fuel filler caps, particulate filters, etc. For instance:
- In August 2022, Mahle announced its presence soon in the automotive aftermarket solution, which will include MahleBattery PRO diagnostics and service solutions, including E-Scan, E-Health, and E-Care modes. However, the TechPROdiagnostic tool was initially launched by the company in March 2022.
- Furthermore, technological advancements in vehicles like connected cars, electric and autonomous vehicles, and complex designs are likely to further boost the adoption of fuel diagnostic tools, as faults in modern vehicles are often complex and require advanced diagnostic solutions.
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Asia-Pacific Region Expected to Hold Dominant Share in the Market
- The Asia-Pacific region is expected to play a significant role in the market due to major automotive markets like India, China, and Japan. The region is also home to manufacturing giants such as Hyundai, Toyota, Tata, and Honda. All the countries in the region have harmonized their OBD standards with global standards, yet gaps remain in markets such as India in implementing these standards.
- As automakers in China, Japan, and South Korea have stepped up their R&D programs to develop advanced automotive technologies, such as connected cars, autonomous vehicles, and electric vehicles, the demand for automotive diagnostic tools is expected to increase. Additionally, the countries in the region have vowed to lower vehicular emissions and adopt automotive technologies for better performance and maintenance, giving rise to the demand for automotive diagnostic tools.
- In China, the China 6 OBD provisions are similar to that of California OBD II regulations but with minor changes that exempt a few monitoring requirements to ease compliance burdens for auto manufacturers. The China 6 standards also have provisions for deficiencies in the OBD systems, exempting automakers from installing all the monitoring systems.
- India has been experiencing high levels of pollution in its cities, and a significant part of that problem is the rise in vehicle exhaust emissions. The government adopted Bharat VI emission norms in April 2020, which has increased the number of electronic components in vehicles.
- Further, Utility companies are offering reliable and advanced diagnostic tools to elevate their sales bars. For instance, in January 2023, Innova Electronics Corporation, which is the leading supplier of automotive aftermarket diagnostic tools, announced the launch of the latest firmware and software of the current generation of OBD2 scanner tools.
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