Automotive Diagnostic Scan Tools Market Size, Share & COVID-19 Impact Analysis, By Product Type (Diagnostic Equipment/Hardware, Diagnostic Software), By Vehicle Type (Passenger Cars, Commercial Vehicles), and Regional Forecast, 2021-2028

The global automotive diagnostic scan tools market size was USD 31.87 billion in 2020. The market is expected to grow from USD 32.71 billion in 2021 to USD 46.95 billion in 2028 at a CAGR of 5.3% during 2021-2028. The global impact of COVID-19 has been unprecedented and staggering, with the market witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of 9.1% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market's demand and growth, returning to pre-pandemic levels once the pandemic is over.

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 into the car’s diagnostic connector. These scan 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 various vehicles. Quick repair and easier identification of faults in automobiles are responsible for the increased importance of automotive diagnostic scan tools in the industry.   

Decreasing demand for diagnostic scan tools due to COVID-19 is expected to hamper the market growth

The pandemic-induced lockdown during Q2 2020 and the subsequent restrictions through the rest of 2020 to mitigate COVID-19 has led to a significant reduction in passenger transport. For instance, according to a study published by the International Energy Agency (IEA) regarding changes in transport behavior during the covid-19 crisis, road transport activity decreased by nearly 50% by the end of Q2 2020 compared to 2019. Similarly, according to the Global COVID-19 Auto & Mobility Consumer Survey published by McKinsey for the start of Q3 2021, 51% of the surveyed respondents indicated that they would travel less than before the pandemic. Therefore, a decrease in vehicle usage will translate to reduced demand for automotive diagnostic services in short to mid-term.

However, mobility is recovering at different rates, with a significant rebound in the U.S. The use of public transport has increased significantly as compared to the second half of 2020, and shared mobility (especially micro-mobility services) has exceeded pre-covid-19 levels in several countries. According to the McKinsey survey, prospective vehicle buyers in key markets such as China and the U.S. have fueled the market’s positive recovery, and consumers’ intent to purchase new cars is expected to reach 94% of pre-COVID levels in the next year. These factors will positively influence the growth of the market.

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 (On-Board Diagnostics 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 automotive diagnostic scan tools market growth.

DRIVING FACTORS

Increased Production and Usage of Vehicles to Spur Demand

The growing demand of vehicles due to rapid urbanization especially in the developing countries is anticipated to boost the demand for vehicle diagnostics solutions over the next few years. The customers are emphasizing on buying a vehicle with embedded in-vehicle diagnostic scanning solutions. Moreover, as the awareness about such tools shall grow among the users, their demand will drastically boost in such countries.

Technological Advancement of Vehicles to Promote Growth

Vehicle architecture has become increasingly complex with the 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, these 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 scan tools requires highly skilled technicians, which further hinders its adoption among consumers.

SEGMENTATION

By Product Type Analysis

Diagnostic Equipment/Hardware Expected to Hold the Largest Share Due to the Mandatory Implementation of Diagnostic Hardware in Europe and the U.S.

By product type, the market is segmented into diagnostic equipment/hardware and diagnostic software. The diagnostic equipment/hardware segment held the largest share of the market in 2020, primarily assisted by the mandatory implementation of diagnostic hardware such as the OBD-II ports on all vehicles in Europe and the U.S. It is also incorporated in all passenger cars in emerging economies. The diagnostic software segment is anticipated to exhibit a significantly higher CAGR during the next few years owing to the increasing adoption of 5G-based automotive communication and decreasing development costs.

By Vehicle Type Analysis

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Passenger Cars Segment Dominated the Market in 2020 Due to the Increasing Sales of Passenger Cars Globally

Based on vehicle type, the market is segmented into passenger cars and commercial vehicles. The passenger car segment held the largest market share in 2020. The increasing awareness among consumers regarding 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. Further, 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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As per the Asia Pacific automotive diagnostic scan tools market analysis, the region holds the largest share of the market and was valued at USD 15.43 billion in 2020. A substantial increase in the number of service stations and automotive workshops coupled with the high production of automobiles, particularly in China and India, are factors attributed to the dominance of Asia Pacific region in this market. Moreover, growing production of electric vehicles in the region is anticipated to further boost the demand for such tools.

Europe is expected to show significant growth in the market owing to mandatory OBD requirements and stringent emission regulations. 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 due to guidelines in various states regulate data storage and data accessibility. This factor is expected to promote the use of diagnostic scan tools among consumers, which further fuels the growth of this market. Moreover, the growing demand for cloud based diagnostic features is expected to fuel the North American market.

KEY INDUSTRY PLAYERS

Denso, Bosch, and Snap-on Incorporated are Leading Players in the Market owing to Industry-Leading Products

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 is expected to enhance diagnostic capabilities and enable greater collaboration among OEMs and diagnostic scan tool manufacturers. This factor can contribute to the growth of the automotive diagnostic scan tool market over the next few years.

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:

• May 2021 – Snap-on Incorporated launched the new John Bean Tru-Point advanced driver assistance system (ADAS) calibration tool at Auto Glass Week in Florida, U.S. It provides shops with the ability to streamline the ADAS calibration process from beginning to end.


• April 2021 – HORIBA Automotive announced an electrification offering to the industry that includes solutions ranging from single component testing to turnkey testing solutions and includes consulting and other services throughout the total vehicle development process.


• February 2021 – SGS acquired Autoscope/CTOK, a France-based company operating three vehicle inspection services (VIS) centers. This acquisition aims to consolidate SGS’s market-leading position in vehicle inspection services in France and the acquisition of Groupe Moreau and CTA Gallet in 2020.


• September 2020 – Snap-on Incorporated acquired AutoCrib, Inc., a leading marketer, manufacturer, and designer of tool and asset control solutions. Through this acquisition, Snap-on Incorporated aimed to expand its tool control and productivity solutions for critical industries.

REPORT COVERAGE

An Infographic Representation of Automotive Diagnostic Scan Tools Market

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The 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. Furthermore, 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 market over recent years.

Table of Segmentation: