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Market Overview

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The vehicle diagnostic analytics market is expected to reach $4,426 million by 2031, growing at a CAGR of 9.22% during the forecast period 2022-2031. This growth can be attributed to several factors. Firstly, there is a growing demand for vehicle diagnostic analytics in fleet management. Vehicle fleet owners are increasingly adopting these solutions to increase vehicle uptime and reduce maintenance costs. Secondly, original equipment manufacturers (OEMs) in the automotive industry are rapidly adopting connected, autonomous, shared, and electric (CASE) strategies. This adoption is driving the demand for vehicle diagnostic analytics solutions. Thirdly, there is an increasing focus on predictive maintenance for cost-savings and enhanced safety, which is fueling the growth of the market. Lastly, OEMs and automotive dealers are increasingly using vehicle diagnostic analytics for warranty analytics, which is further contributing to the market growth.

The market for vehicle diagnostic analytics solutions is witnessing rapid adoption, particularly among vehicle fleet owners. This is mainly due to the aforementioned factors driving the demand in fleet management. Additionally, OEMs, automotive dealers, and service providers are also showing increased interest in these solutions. They are benefiting from the solutions by utilizing them in warranty analytics and residual value estimation of vehicles. The demand for vehicle diagnostic analytics solutions is expected to continue growing as OEMs make them an integral part of their product lifecycle. Telecom service providers also play a crucial role in the market as they provide the necessary connectivity for remote diagnostics. However, limited telecom connectivity in certain areas restricts the growth of remote diagnostic analytics solutions to some extent.

The vehicle diagnostic analytics industry revolves around the collection, storage, and analysis of data generated from diagnostic tools installed in vehicles. This process can be complex for automotive OEMs, leading to the involvement of third-party data warehouse companies and cloud service providers. These companies store the generated data in their data warehouses with the authorization of OEMs, ensuring the smooth functioning of the industry.

The growth of the vehicle diagnostic analytics market is closely tied to the emergence of connected vehicles. These vehicles are equipped with sensor platforms that generate large amounts of data from various systems. The implementation of 5G and high bandwidth V2X technology has further improved connectivity in connected vehicles, bolstering the growth of the vehicle diagnostic analytics market.

The market is currently in the growth phase, with increasing adoption of automotive diagnostics solutions in connected vehicles, internal combustion engine (ICE) vehicles, and electric vehicles (EVs). As a result, the market is expected to thrive in the coming years.

To meet the evolving needs of the automotive industry, vehicle diagnostic solution providers are actively developing advanced analytics solutions. With the development of the next generation of connected and autonomous vehicles by automotive OEMs, the demand for these solutions is expected to increase exponentially.

In addition to the drivers mentioned above, certain limitations exist in the vehicle diagnostic analytics market. These include concerns regarding data security, network coverage limitations, and challenges associated with integrating and upgrading analytics software with existing diagnostic solutions.

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Market Segmentation

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The market is segmented based on various factors, including application type, vehicle propulsion type, vehicle type, diagnostic solution type, end user, deployment model, and region.

Segmentation by Application Type
Predictive Maintenance
Warranty Analytics
Residual Value Estimation
Vehicle Safety and Security Management

Segmentation by Vehicle Propulsion Type
Internal Combustion Engine (ICE) Vehicles
Electric Vehicles (EVs)

Segmentation by Vehicle Type
Passenger Vehicles
Commercial Vehicles

Segmentation by Diagnostic Solution Type
Onboard Diagnostics
Remote Diagnostics

Segmentation by End User
Fleet Owners
Automotive Dealers and Service Providers
OEMs
Insurance Companies

Segmentation by Deployment Model
On-Premises
On-Demand

Segmentation by Region
North America
Europe
U.K.
China
Asia-Pacific and Japan
Rest-of-the-World

During the forecast period of 2022-2031, the predictive maintenance segment is projected to dominate the market. This can be attributed to the advantages of cost savings and improved vehicle safety provided by predictive maintenance solutions. Vehicle owners are increasingly focusing on reducing maintenance and repair costs by utilizing vehicle diagnostic analytics solutions. These solutions are primarily deployed by vehicle fleet operators to monitor and assess the health of important vehicle components. The insights generated from these solutions enable the prediction of component faults in advance, leading to significant cost savings through predictive maintenance. In addition to cost reduction, predictive maintenance solutions also enhance vehicle safety.

Currently, the market is dominated by internal combustion engine (ICE) vehicles in terms of vehicle propulsion type. However, it is expected that electric vehicles (EVs) will take over as the dominant segment towards the end of the forecast period. The electric vehicles market has been experiencing rapid growth, driven by government initiatives for vehicle electrification and the increasing number of electric vehicle offerings by established players in the global automotive market. Automotive OEMs are increasingly relying on vehicle diagnostic analytics solutions to refine their electric vehicle models and improve profitability. With the electric vehicles market projected to grow at a faster rate, particularly in large developing economies, electric vehicles are expected to dominate the vehicle diagnostic analytics market in the coming years.

In terms of vehicle type, commercial vehicles are likely to maintain their dominance in the market throughout the forecast period. Fleet owners are major users of vehicle diagnostic analytics solutions. Commercial vehicle fleet owners utilize these solutions to increase the profitability of their businesses through predictive maintenance and improved vehicle uptime. On the other hand, passenger vehicles have a smaller share in the market due to the lower popularity of vehicle diagnostic analytics solutions among private vehicle owners.

The onboard diagnostics segment is anticipated to dominate the vehicle diagnostic analytics market during the forecast period, mainly due to the lack of infrastructure required for remote diagnostics. Lack of telecom infrastructure globally contributed to the onboard diagnostics segment’s dominance in 2021. However, with the introduction of 5G technology and improvements in telecom infrastructure, the remote diagnostics segment is expected to grow at a faster rate compared to the onboard diagnostics segment. The connected vehicle industry is expected to witness higher levels of connectivity, paving the way for the growth of the remote diagnostics segment in the vehicle diagnostic analytics market.

The fleet owners segment slightly dominates the vehicle diagnostic analytics market, driven by the increasing popularity of automotive diagnostics solutions among fleet owners seeking cost savings for their vehicles. Vehicle diagnostic analytics solutions are gaining popularity among fleet owners due to the cost savings and improved safety they offer for commercial vehicles. These solutions allow fleet owners to monitor, evaluate, and generate insights on vehicle health, enabling them to predict component faults in advance and resolve them. As the demand for commercial vehicles for goods transportation grows, vehicle diagnostic analytics solutions are expected to gain more importance among fleet owners and dominate the global market.

The on-premises segment is projected to maintain its dominance in the market during the forecast period. However, the on-demand deployment model is expected to experience higher adoption rates. This is attributed to the flexibility, scalability, and convenience offered by cloud-based on-demand deployment. With the increasing demand for real-time diagnostic analytics solutions, on-demand deployment is expected to grow significantly in the coming years.

In terms of regional revenue, North America generated the highest revenue of $585 million in 2021, primarily due to the increased sales of connected vehicles in the region. The vehicle diagnostic analytics market in North America is attractive, as automotive OEMs and fleet owners are adopting analytics solutions. However, Europe is expected to surpass North America and exhibit the highest growth rate among all regions towards the end of the forecast period.

Europe has witnessed rapid adoption of electric vehicles and the development of advanced vehicle analytics solutions in the past decade (2011-2021). With supportive government policies and incentives for electric vehicle adoption, the demand for vehicle diagnostic analytics solutions is expected to surge in the next decade (2022-2032). Furthermore, the region is home to major established players in the market, such as Bosch Mobility Solutions and Continental Mobility Services.

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Competitive Landscape

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The selection of the profiled companies is based on inputs obtained from primary experts, as well as an analysis of their company coverage, product portfolio, and market presence.

The vehicle diagnostic analytics market is primarily led by three key players: Bosch Mobility Solutions (Bosch Group), Continental Mobility Services (Continental AG), and Harman International. Together, these players hold approximately 60% of the market share, while the remaining companies in the market account for the remaining 40% of the market share.

Key companies profiled in this report include Bosch Mobility Solutions, Continental Mobility Services, Harman International, Microsoft, Teletrac Navman US Ltd, SAP, WEX Inc., IBM, Kinetica DB Inc., Silver Power Systems, OCTO Group S.p.A, KPIT Technologies Limited, Tata Consultancy Services Limited, Noregon, Akkurate Oy, AutoDAP B.V., Sibros Technologies Inc., Mojio, Poseidon Systems, LLC.

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Recent Industry Developments

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In February 2022, OCTO Telematics announced an expansion of its partnership with Ford Motor Company to extend data streaming services into Europe. Through leveraging Ford’s connected vehicle data, OCTO aims to enhance its proven telematics services in the insurance and analytical sectors in the United Kingdom, Italy, Germany, France, and Spain.

In January 2022, Continental unveiled a new 4G dongle, designed to enhance the performance of its remote vehicle data platform for various makes and models of vehicles.

In February 2021, Harman International completed the acquisition of all assets belonging to Savari, Inc. This acquisition was aimed at advancing the development of vehicle-to-everything communications technology in 5G edge and automotive devices.

In August 2020, Teletrac Navman US Ltd. introduced TN360, its next-generation telematics solution powered by artificial intelligence. TN360 provides fleet management with intelligent, predictive, and actionable insights.

In September 2019, Bosch improved its vehicle diagnostic analysis for FSA 720 and FSA 740 systems, adapting them for use with 48-volt on-board systems in passenger cars.

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Key Questions Answered

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What are the key factors and trends influencing the vehicle diagnostic analytics market?

How has the global vehicle diagnostic analytics market been affected by COVID-19, both in terms of actual business operations and the supply chain?

What measures have existing players taken to enhance or maintain their market position, and what strategies are new players adopting as they enter the market?

What are the different market segments based on application type, vehicle propulsion type, vehicle type, diagnostic solution type, end user, and deployment model? How are these segments expected to perform in the coming years?

What are the latest developments in various countries around the world regarding the advancement of vehicle diagnostic analytics, and what are the consumption patterns in these countries?