Driven by several possibilities, the global automotive on-board diagnostics - OBD market is estimated to reach $ 22 Bn by 2031, registering a 5% CAGR during the next ten years.
According to a market study carried out by Transparency Market Research, a global market intelligence company providing global business information reports and services, the OBD market has made continuous strides to meet a wide range of vehicle monitoring and maintenance applications and remote diagnostic solutions.
Vehicle owners and OEMs have leveraged the sensor and software technologies encompassed by on-board diagnostics for emission monitoring and the overall health of the vehicles. OBD typically includes black box event data recorders, vehicle tracking control units, and other electric control units. Over the years, the revenue potential has grown remarkably, circumscribing a wide range of stakeholders in the ecosystem. For instance, OEMs, software developers, and insurance providers have seen new revenue streams in telematics. The value chain of the automotive on-board diagnostics market is fast expanding, with on-board diagnostics becoming a part of driverless cars and electric vehicles. Two prominently lucrative areas are usage-based insurance and commercial vehicle telematics.
A growing number of players are keen on reprogramming the OBD devices to prevent or rectify malfunctions. The ecosystem of players in the automotive on-board diagnostics market is fairly wide. Some of the well-entrenched players include Verizon, Intel, ERM Electronic Systems, OBD Solutions, Continental and Vector Informatik.
Real-time insurance spurs telematics
Telematics has increasingly been deployed in commercial fleets for their remote monitoring and maintenance, particularly concerning their emissions. Over the past few years, consumers telematics are gaining traction. Telematics is becoming a driver and accelerant for demand for real-time insurance policies, where high customer satisfaction is a crucial winning imperative. The transportation industry has also harnessed the benefits of OBD for monitoring driver's behaviour, especially in the commercial sector. Interested stakeholders capitalize on telematics-based insurance policies and are harping on the benefits of real-time insurance or usage-based to attract OEMs and vehicle owners in the automotive industry.
Cloud diagnostic
The market has evolved rapidly over the years. Over-the-air (OTA) software updates open new avenues for market players. A case in point is the need for such updates in driverless vehicles. The 5G integration and growth prospects of connected technologies in electric vehicles expand avenue. Cloud diagnostic managers in coming years are expected to benefit from the benefits of OTA, especially for driverless cars. This surely will attract lodes of investments in near future, the report said.
Innovations in sensor technology
The OBD market is making strides on the back of a markedly expanding array of technologically advanced hardware and software offerings by different companies. For instance, semiconductor devices manufacturers and sensor developers eye vast avenue in the market. Advancements in electronic control units and the incorporation of novel sensors enable the transportation industry to leverage the benefits of automotive on-board diagnostics.
Key driving factors
Interest in automotive OBD among the transportation sector for emission testing and vehicle health monitoring has risen considerably and is a key trend. The rise in business prospects of mobility-as-a-service bolstering the growth potential in the automotive on-board diagnostics market. Increase awareness about safety and vehicle's health, supported by regulatory push, drive the demand.
Initiatives being taken by governments in numerous countries on boosting automobile production are engendering growth in the market. In addition, the demand for connected technologies that allow better fleet management also boosts the market demand.
Courtesy: Transparency Market Research.
Photo is representational; courtesy: Vector Informatik.