Automotive Vehicle Diagnostics Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Vehicle Type (Passenger Cars and Commercial Vehicle), By Connectivity (4G LTE, 3G, Bluetooth and Wi-Fi), By Application (Automatic Crash Notification, Vehicle Health Alert, Vehicle Tracking and Roadside Assistance), By Demand Category (OEM Vs Aftermarket), By Region, By Company and By Geography, Forecast & Opportunities, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 45.62 Billion
CAGR (2026-2031)	7.85%
Fastest Growing Segment	Commercial Vehicle
Largest Market	Asia Pacific
Market Size (2031)	USD 71.79 Billion

Market Overview

The Global Automotive Vehicle Diagnostics Market will grow from USD 45.62 Billion in 2025 to USD 71.79 Billion by 2031 at a 7.85% CAGR. Automotive vehicle diagnostics encompass the specialized hardware and software systems utilized to monitor vehicle health, identify technical malfunctions, and analyze performance data. The market is primarily driven by the increasing integration of complex electronics within modern fleets and stringent government mandates regarding emissions control which necessitate precise fault detection capabilities. Furthermore, the sustained expansion of the pre-owned vehicle sector significantly fuels the demand for reliable aftermarket maintenance and diagnostic solutions. According to the Society of Motor Manufacturers and Traders, in 2024, the used car market experienced a growth of 5.5 percent.

However, the market confronts a significant impediment regarding the high acquisition costs of advanced diagnostic equipment and subscription-based software services. Independent workshops often struggle with the substantial capital investment required for these proprietary tools which are essential for servicing modern connected vehicles. This financial barrier limits the ability of smaller service providers to compete effectively with franchised dealerships and could restrict the broader accessibility of critical diagnostic services across the industry.

Key Market Drivers

The rapid adoption of electric and hybrid vehicle technologies is fundamentally altering the global diagnostic landscape by introducing high-voltage systems and battery management requirements that differ significantly from internal combustion engines. Technicians now require specialized interface tools to monitor state-of-health, thermal management, and electric drivetrain efficiency, moving beyond standard mechanical troubleshooting. This technological shift necessitates constant upgrades to workshop equipment to handle the safety protocols and proprietary data streams associated with electrified platforms. According to the International Energy Agency, April 2024, in the 'Global EV Outlook 2024', electric car sales reached nearly 14 million in 2023, representing 18 percent of the total market, thereby mandating a parallel expansion in EV-compatible diagnostic infrastructure.

The increasing complexity of modern vehicle electronics and software architectures serves as a primary catalyst for the advancement of diagnostic capabilities. As manufacturers transition toward software-defined vehicles, the integration of connected systems and Advanced Driver Assistance Systems (ADAS) increases the volume of data points that require monitoring for calibration and fault detection. Service centers must consequently utilize advanced scanning tools capable of interpreting intricate code and performing remote analysis to address software-centric malfunctions. According to the National Highway Traffic Safety Administration, July 2024, in the 'Safety Recall Report', Tesla recalled over 1.8 million vehicles to address a software failure in the hood latch detection system, illustrating the critical role of diagnostics in managing software-based compliance. Broader market growth is further supported by rising fleet volumes; according to the European Automobile Manufacturers’ Association, in 2024, new van registrations in the European Union increased by 12.6 percent during the first quarter, reinforcing the need for scalable maintenance solutions.

Download Free Sample Report

Key Market Challenges

The substantial acquisition costs associated with advanced diagnostic equipment and recurring subscription services serve as a primary restraint on the Global Automotive Vehicle Diagnostics Market. Independent workshops and smaller service providers often lack the capital resources to invest in the proprietary hardware and essential software updates required for modern connected vehicles. This financial burden prevents these smaller entities from competing with franchised dealerships, leading to a consolidation of service capabilities and shrinking the addressable market for diagnostic tool manufacturers who rely on a diverse customer base.

This cost barrier directly impedes market expansion by limiting the adoption rate of diagnostic technologies across the broader aftermarket sector. Although the demand for vehicle maintenance continues to rise, the high entry price locks out independent operators, creating a bottleneck in service availability. According to the Auto Care Association, in 2024, the United States light vehicle aftermarket was expected to grow by 5.9 percent. While this data indicates a robust appetite for service and repair, the prohibitive expense of diagnostic systems prevents the market from fully capitalizing on this sector-wide growth, ultimately dampening the potential sales volume for equipment providers.

Key Market Trends

The integration of Artificial Intelligence and Machine Learning for Predictive Maintenance is transforming the market by shifting the focus from reactive repairs to proactive fault prevention. Advanced algorithms now process real-time sensor data to forecast component failures before they manifest, allowing fleet managers to optimize vehicle uptime and reduce unexpected breakdowns. This technological shift enables diagnostic systems to identify patterns that traditional tools miss, significantly enhancing the speed and accuracy of troubleshooting for complex mechanical and electronic issues. According to FPT Software, September 2024, in the 'Revolutionizing Automotive Industry with AI-Powered Predictive Maintenance' article, Volvo Trucks implemented a system that reduced diagnostic time for breakdown detection by 70 percent through real-time data analysis.

The widespread adoption of Over-the-Air (OTA) Remote Diagnostic Capabilities is establishing a new standard for vehicle lifecycle management and software maintenance. Manufacturers are increasingly utilizing secure wireless connections to deploy critical firmware updates, patch security vulnerabilities, and monitor system health without requiring physical workshop visits. This capability not only reduces warranty-related costs for OEMs but also ensures that connected vehicles remain compliant with evolving performance standards throughout their operational life. According to Stellantis, June 2024, in the 'Stellantis Executes Software Strategic Plan' press release, the company delivered more than 94 million over-the-air updates in 2023, highlighting the substantial scale of remote diagnostic interactions in modern fleets.

Segmental Insights

The Commercial Vehicle segment is currently the fastest-growing category within the Global Automotive Vehicle Diagnostics Market. This rapid expansion is primarily driven by the imperative for fleet operators to minimize vehicle downtime and maximize operational efficiency in the logistics sector. Stringent compliance mandates from regulatory bodies, such as the Environmental Protection Agency (EPA), regarding emissions control and safety standards, compel the adoption of comprehensive diagnostic solutions. Furthermore, the increasing integration of telematics facilitates real-time health monitoring, allowing businesses to implement predictive maintenance strategies and avoid costly mechanical failures.

Regional Insights

Asia Pacific dominates the Global Automotive Vehicle Diagnostics Market, primarily driven by extensive vehicle manufacturing in major hubs like China, India, and Japan. The region benefits from the rising integration of electronic components in modern automobiles, which creates a critical need for accurate fault detection tools. Additionally, strict regulatory frameworks regarding vehicle emissions and safety standards enforce the mandatory use of onboard diagnostics. This regulatory pressure, combined with a growing network of aftermarket service providers, ensures sustained demand for diagnostic equipment throughout the region’s automotive sector.

Recent Developments

• In January 2025, Texa released IDC6, a next-generation diagnostic system featuring an artificial intelligence-supported assistant to improve fleet maintenance operations. This new platform replaced previous iterations with a redesigned user interface and simplified navigation structure tailored to technician workflows. The system's AI engine utilizes filtered data and technical service bulletins to provide guided repair blueprints, helping users identify correct solutions for complex truck issues more rapidly. This launch represented a significant shift towards integrating intelligent software architecture into multi-brand vehicle diagnostics, aiming to increase efficiency and precision for automotive repair professionals handling diverse fleets.
• In October 2024, Snap-on Diagnostics released its autumn software update, significantly expanding vehicle coverage and diagnostic capabilities for repair professionals. The update introduced comprehensive coverage for Tesla models, including the S, X, 3, and Y, marking a major addition to the tool's library. Furthermore, the release included model year 2024 updates for numerous domestic, Asian, and European manufacturers, alongside new guided component tests. These enhancements were designed to support technicians in addressing complex repairs involving hybrid systems, electric vehicles, and advanced driver assistance systems, ensuring independent workshops remain competitive with evolving automotive technologies.
• In September 2024, Bosch enhanced its commercial vehicle diagnostics portfolio with the launch of the third-generation KTS Truck tool and a new software package. The updated hardware featured a more powerful processor to facilitate faster communication speeds, including support for PassThru and remote diagnostic capabilities. Concurrently, the company introduced the OHW 3 software specifically for material handling equipment, such as forklifts and telehandlers. This software expansion provided workshops with detailed information on hydraulic systems and component removal instructions, thereby offering a comprehensive diagnostic solution for heavy-duty and off-highway vehicle maintenance providers.
• In July 2024, Launch Tech USA announced a strategic partnership with CarTechIQ to integrate artificial intelligence capabilities into its automotive diagnostic tools. This collaboration involved incorporating a patent-pending diagnostic assistant known as PredictaFix into Launch Tech's existing scanner suite. The integration was designed to streamline the repair process by utilizing advanced algorithms to identify vehicle issues more accurately and efficiently. By bringing these AI-driven solutions to North American technicians, the companies aimed to minimize the risk of misdiagnosis and reduce the overall time required for vehicle maintenance and repairs in the competitive automotive aftermarket sector.

Key Market Players

• Robert Bosch GmbH
• Continental AG
• Delphi Automotive PLC
• OnStar LLC
• Snap-On Inc.
• Magneti Marelli
• Softing AG
• VOXX International Corporation.
• Vector Informatik
• Vidiwave Ltd
• Autel Intelligent Technology Corp., Ltd.
• Caterpillar Inc.
• KPA Industry Inc.
• Launch Tech Co., Ltd.

By Vehicle Type	By Connectivity	By Application	By Demand Category	By Region
Passenger Cars and Commercial Vehicle	4G LTE 3G Bluetooth and Wi-Fi	Automatic Crash Notification Vehicle Health Alert Vehicle Tracking and Roadside Assistance	OEM Vs Aftermarket	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Automotive Vehicle Diagnostics Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Automotive Vehicle Diagnostics Market, By Vehicle Type:

• Passenger Cars and Commercial Vehicle

• Automotive Vehicle Diagnostics Market, By Connectivity:

• 4G LTE
• 3G
• Bluetooth and Wi-Fi

• Automotive Vehicle Diagnostics Market, By Application:

• Automatic Crash Notification
• Vehicle Health Alert
• Vehicle Tracking and Roadside Assistance

• Automotive Vehicle Diagnostics Market, By Demand Category:

• OEM Vs Aftermarket

• Automotive Vehicle Diagnostics Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE