The global Automotive Diagnostics market size was estimated at USD 54.2 billion in 2023 and is projected to reach USD 106.8 billion in 2030 at a CAGR of 10.1% during the forecast period 2023-2030.
The automotive diagnostics market is experiencing a notable surge in revenue growth, primarily propelled by the increasing implementation of cutting-edge technologies like Artificial Intelligence (AI), Machine Learning (ML), and the Internet of Things (IoT) within the automobile industry. These advanced technologies are revolutionizing diagnostic capabilities, enabling the development of sophisticated tools that can swiftly and reliably detect and diagnose issues by analysing massive amounts of real-time data. The integration of these technologies with diagnostic equipment is anticipated to be a key driver for future revenue growth in the automotive diagnostics market.
Another significant factor contributing to revenue growth in the automotive diagnostics sector is the expansion of the market for aftermarket diagnostic tools. The aftermarket segment is poised for substantial growth due to the growing demand for affordable diagnostic instruments that can be effectively utilized for vehicle maintenance and repair. Additionally, the increasing number of vehicles on the road and the need for regular maintenance and repairs further bolster revenue growth in the aftermarket segment.
Furthermore, the adoption of electric and hybrid vehicles is expected to drive revenue growth in the automotive diagnostics market. As the complexity of electronic systems in these vehicles continues to evolve, the demand for sophisticated diagnostic tools capable of identifying and resolving intricate problems in these systems will surge. Consequently, the market for automotive diagnostics is predicted to experience significant revenue growth as the demand for electric and hybrid automobiles rises.
However, the high cost of diagnostic tools presents a potential constraint on the market's revenue growth, as it renders them unaffordable for small and medium-sized repair shops. Additionally, the scarcity of qualified technicians proficient in operating these instruments efficiently poses another challenge that could impede revenue growth in the market. The shortage of skilled professionals may hinder revenue growth to some extent, emphasizing the need to address this issue in order to unlock the market's full potential.
The automotive industry is witnessing a growing trend of increasing vehicle connectivity. This trend is driving the demand for diagnostic software that can establish connections with a vehicle's systems and provide real-time data on its performance, particularly as the number of connected automobiles continues to rise. Consequently, the automotive diagnostics market is expected to experience an upsurge in the need for diagnostic software.
Moreover, throughout the forecast period, the segment of diagnostic equipment is projected to exhibit a higher compound annual growth rate (CAGR) in terms of revenue. The automotive industry's demand for sophisticated diagnostic equipment is expected to escalate in tandem with the shift towards predictive maintenance and the growing need for more precise and efficient diagnostic instruments. This surge in demand for advanced diagnostic equipment is set to drive the revenue growth of the automotive diagnostics market. Semi-autonomous and autonomous vehicles heavily rely on software, and the automotive diagnostics market is experiencing favorable growth due to the growing emphasis on implementing safety features for driving. Prominent automakers like BMW, Volvo, and Ford are incorporating level 1 and level 2 autonomous technologies into their vehicles, contributing to this positive trend.
North America to Dominate the Market
