Automotive Diagnostic Scan Tools Market Size, Share & COVID-19 Impact Analysis, By Product Type (On-Board Diagnostics (OBD), Electric System Analyzer, Others), By Vehicle Type (Passenger Car, Commercial Vehicles), and Regional Forecast, 2020-2027

The global automotive diagnostic scan tools market size was USD 38.72 billion in 2019 and is projected to reach USD 45.02 billion by 2027, exhibiting a CAGR of 5.1% during the forecast period.

The increasing complexity of modern vehicle architecture owing to consumer preference for advanced automated systems has led to the rapid electrification of automotive components. A variety of tools were used to diagnose such electronic components manually which was time-consuming and expensive. Hence, a standard tool was developed by garage equipment manufacturers to diagnose the vehicles by plugging a cable to the car’s diagnostic connector. These diagnostic tools are a combination of electronic devices and software used to diagnose any fault in the vehicle. They can be used to reprogram control modules for vehicles and detect and analyze electronic system malfunction for a variety of vehicles. Quick repair and easier identification of fault are responsible for the increased importance of automotive diagnostic scan tools in the industry.

COVID-19 Effect: Automotive Industry to Witness Slow Growth

The impact of the COVID-19 pandemic on the automotive industry has been characterized by factory closures, supply chain disruption, and a collapse in demand. The automotive industry has extensive interconnections to downstream (for example, mobility services) as well as upstream industries (for example, steel, textiles, among others) and is a key element of economic growth. Uncertain recovery schedules have further compounded the early supply chain and manufacturing disruptions.

According to the International Labour Organization, the removal of 2.5 million passenger vehicles from production schedules caused by factory closures in North America and Europe has led to lost revenue of USD 77.7 billion for automakers and parts manufacturing companies. A sharp drop in investment are expected to continue particularly over the next two years as well as increasing industry consolidation as smaller market players may be compelled to accelerate market exit strategies.

The pandemic has severely impacted services such as car repair and a downturn in investment further impacts the technological advancement of diagnostic repair solutions. The automotive diagnostic scan tools market growth is primarily driven by the increasing sales of passenger vehicles. However, the continued decline in sales substantially impacts the profitability of automakers and consequently disrupts R&D spending on the integration of telematics and advanced diagnostic functionalities. Hence, these factors are likely to impact the growth of the market over the next three years.

LATEST TRENDS

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Increased Adoption of OBD-II Standard by Fleet Owners to Propel Demand

Stringent government regulations have mandated the use of OBD-II in all vehicles in the U.S. and Europe. OBD-II allows GPS fleet tracking devices to record information such as fuel usage, engine revolutions, fault codes, and vehicle speed. This information can be used by telematics devices to determine fuel consumption, start and finish of a trip, speeding among other parameters. A software interface can then be used to access this information that allows fleet operators to monitor the performance and use of their vehicles.

Hence, increased adoption of on-board diagnostics in commercial fleets is likely to emerge as a positive factor for the growth of the automotive diagnostic scan tool market.

DRIVING FACTORS

Increased Production and Usage of Vehicles to Spur Demand

The growth of the automotive diagnostic scan tools market is particularly driven by rapid urbanization in emerging economies that have led to an increase in demand for personal motor vehicles. Growing demand by consumers for passenger cars equipped with sophisticated automotive diagnostic software has led to greater adoption of these scan tools. Hence, these major factors are responsible for fueling the growth of this market.

Technological Advancement of Vehicles to Promote Growth

Vehicle architecture has become increasingly complex with greater application of technologies such as electronic control modules and advanced driver assistance systems. Fault diagnosis for such systems is technically challenging for regular end-users. Hence, diagnostic scan tools with the provision of standard fault codes and other services provide a simple interface to consumers to determine the issues with the car and avoid expensive workshop repair for minor problems. Hence, the greater complexity of automotive electronics is likely to drive the growth of the market.

RESTRAINING FACTORS

High Cost and Complex Functioning of Scan Tools to Hinder Growth

The product penetration among numerous consumers across the globe has been restricted by the high cost of technologically advanced automotive diagnostic scan tools. Furthermore, the complex functioning of such scan tools requires highly skilled technicians which further hinder increased adoption among consumers.

SEGMENTATION

By Product Type Analysis

OBD Expected to Hold the Largest Share of the Market

By product type, the market is segmented into on-board diagnostics (OBD), electric system analyzer, and others. The OBD segment is expected to show significant growth in the market which is primarily assisted by the mandatory implementation of diagnostic equipment hardware such as the OBD-II ports on all vehicles in Europe and the U.S as well as all passenger cars in emerging economies. The electric system analyzer segment is also expected to show good growth in the market. Ease of operation and relative affordability compared to other automotive diagnostic scan tools are responsible for the significant growth of this segment.

By Vehicle Type Analysis

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Passenger Cars Segment Dominated the Market in 2019

Based on vehicle type, the market is segmented into passenger cars and commercial vehicles. The passenger car segment held the largest market share in 2019. The increasing awareness among consumers regarding the fault-tolerance and continuous operation capabilities via the use of automotive diagnostic scan tools are responsible for the dominant position of the passenger car segment.

The commercial vehicle segment is expected to show considerable growth in the market owing to the greater adoption of OBD standards in heavy-duty vehicles.

REGIONAL INSIGHTS

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By 2027, Asia Pacific is projected to hold the largest share of the market for automotive diagnostic scan tools. A substantial increase in the number of service stations and automotive workshops coupled with high production of automobiles particularly in China and India are factors attributed to the dominance of Asia Pacific in this market.

Europe is expected to show significant growth in the market owing to mandatory OBD requirements and stringent emission norms. Furthermore, early adoption of telematics devices and technologically advanced diagnostic software such as driver assistance functionalities propel the demand for diagnostics solutions in this region. North America is expected to show considerable growth in the market. Guidelines in various states that regulate data storage and data accessibility is expected to promote the use of these scan tools among consumers which further fuels the growth of this market.

KEY INDUSTRY PLAYERS

Denso, Bosch, and Snap-on Incorporated are leading players in the market.

Global players such as Snap-on Incorporated, Continental, Denso, and Bosch hold dominant positions in the market with the expansion of product portfolio and entry into emerging markets via partnerships and strategic alliances a key area of focus for the majority of the manufacturers. For instance, SGS SA completed its acquisition of Advanced Metrology Solutions S.L. (AMS) in 2018. AMS specializes in precision services in 3D metrology as well as highly technical inspection measurement processes. The acquisition enables SGS to expand its product portfolio in the aforementioned services across Spain and Europe.

Key automakers such as Daimler AG, General Motors, and Volvo are developing proprietary interface technology or collaborating with other key players to enhance in-built diagnostic technology in the vehicles. Hence, the expansion of scan tool functionalities to enhance diagnostic capabilities and greater collaboration among OEMs and diagnostic scan tools manufacturers is expected to contribute to the growth of the automotive diagnostic scan tool market over the forecast period.

LIST OF KEY COMPANIES PROFILED:

• ACTIA Group (Toulouse, France)


• Snap-on Incorporated (Wisconsin, U.S.)


• Softing AG (Haar, Germany)


• Robert Bosch GmbH (Gerlingen, Germany)


• Delphi Technologies (London, U.K.)


• Denso Corporation (Aichi, Japan)


• SPX Corporation (North Carolina, U.S.)


• Continental AG (Hanover, Germany)


• SGS SA (Geneva, Switzerland)


• Horiba, Ltd. (Kyoto, Japan)

KEY INDUSTRY DEVELOPMENTS:

• In July 2021, Robert Bosch GmbH introduced a new high-voltage lab rig (HVLR) for testing electric vehicle power electronics. The system integrates a high-voltage power supply and electronic safety functions for the circuit of the component under test in a portable compact control cabinet


• In July 2021, HORIBA Europe GmbH announced the successful acquisition of BeXema GmbH. Through this acquisition, HORIBA incorporates the technologies of the electric power field into the group’s internal supply chain.


• In May 2021, Snap-on introduced the new Diagnostic Mobile Workcenter, which enables technicians from anywhere in the service bay to use the full capabilities of the ZEUS diagnostic and information system, including exclusive Fast-Track Intelligent Diagnostics.


• In March 2021, Snap-on acquired Dealer-FX Group, Inc., based in Markham, Ontario, for approximately $200 million in cash. This acquisition complements and expands on Snap-on’s existing OEM and dealership business in its Repair Systems & Information (“RS&I”) Group.

REPORT COVERAGE

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The automotive diagnostic scan tools market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.

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