The global automotive diagnostic tools market, fueled by a number of technological advancements, is rapidly becoming an extremely lucrative investment avenue of the automotive industry. Environmental concerns and the digital transformation of the automobile sector are also being hailed as important factors that have helped expedite the prominence of automotive diagnostic tools industry.
Canada Automotive Diagnostic Scan Tools Market Revenue, By Vehicle Type, 2018 & 2025 (USD Million)
The concept of automotive diagnostic initially began in the form of mechanical gauges that notified the vehicle operator on the overall health of the automobile, by monitoring factors such as the oil pressure, the fuel level and engine health & integrity, that were essential for the smooth operation of the vehicle. The idea behind these automotive aids has successfully kept up with changing times and is the reason why diagnostic scan tools, powered by technological advancements, are still seen adorning a vehicle’s dashboard today.
If only, the discipline of automotive diagnostic has thrived with changing times and has managed to depict a substantial level of diversity, wherein modern-day challenges like vehicle emissions are effectively being tackled through diagnostic tools. In fact, these challenges have seemingly opened up new growth opportunities for the automotive diagnostic tools market.
Impact of automotive industry’s digital transformation on automotive diagnostic tools market
Automobiles have come a long way since their inception, evolving from the purely mechanical contraptions they were to the highly-sophisticated connected machines that incorporate facilities such as location-based services and other connected solutions.
The Drivers: As vehicles keep on incorporating more internal electronic components, the demand for sophisticated diagnostic services that help consumers maintain their vehicles is expected to witness a significant rise. This would irrefutably make the automotive industry’s digital transformation one of the biggest drivers fueling the growth of automotive diagnostic tools market in the forthcoming years.
The Potential: According to the World Economic Forum, the digitization of the automobile industry possesses the potential to generate substantial value for the society & the industry both. In fact, the organization estimates that there is approximately $0.67 trillion worth of value at stake for the automobile industry & an additional $3.1 trillion in societal benefits in the industry’s transformation by 2025, creating significant growth opportunity for the automotive diagnostic tools market in the forthcoming years.
Impact of growing environmental concerns on the automotive diagnostic tools market
According to the United Nations, urban mobility is fast becoming one of the biggest challenges developing & developed nations are facing today. Vehicle emissions are estimated to be responsible for approximately a quarter of the world’s energy-related CO2, raising concerns over its impact on the environment and urban life.
The Challenge: According to the World Economic Forum, apart from environmental concerns, air pollution is the fourth largest killer in the world, contributing to more than six million deaths on an annual basis. Moreover, the UN predicts that the overall demand for transport, both in terms of passenger & freight, would be growing exponentially, doubling in size by 2050.
The Solution: To tackle the challenge of vehicle emissions a majority of governments across the world have passed legislations that require automobile manufacturers to produce vehicles that adhere to a pre-determined level of emission.
The Opportunity: These legislations have been fueling the demands for emission control units in the industry. In fact, the Environmental Protection Agency discovered that, when compared to brand-new, fresh off the line vehicles of the 1970s, modern-day SUVs & pickup trucks, vehicles that burn fuel at an astonishing rate, are approximately 99% more cleaner in terms of emissions.
Demonstrating effectiveness while also fueling the need for the incorporation of emission control units in automobiles will help automotive diagnostic tools market chart out a lucrative growth path in the coming years.
Propelled by growing environmental concerns and the rapid digitalization of the automotive industry, the automotive diagnostic tools market is projected to witness substantial growth in coming years. According to a report by Global Market Insights, Inc., the automotive diagnostic tools market is estimated to surpass the renumeration mark of $49 billion by 2025.