Top Factor Driving Vehicle Diagnostics Market Growth in 2025: Rise In Vehicle Leasing Fuels Demand For Vehicle Diagnostics Market

What combination of drivers is leading to accelerated growth in the vehicle diagnostics market?
The upward trend in vehicle leasing is projected to fuel the expansion of the vehicle diagnostics market. Vehicle leasing, a contractual agreement where a firm or individual rents a vehicle from a leasing company or financial institution for a predetermined timeframe, often spanning months to years, is on the rise. This surge can be attributed to the benefits of having access to the latest vehicle models, decreased maintenance expenses, adaptability, and business tax incentives. In the context of vehicle leasing, vehicle diagnostics is critical to guarantee the upkeep and performance of leased vehicles. This allows the lessors to keep track of the vehicle condition, identify potential problems, and streamline the management of their fleet, ensuring its efficient and dependable functioning throughout the lease term. For instance, as per a September 2022 report by MotorFinanceOnline, an online news and analysis portal based in the UK and powered by Verdict Media Limited, one in every five (20%) new leasing clients in the first half of 2022 sought to lease a pure battery electric vehicle (BEV). This represents a 1575% spike in BEV demand compared to previous years. Hence, the booming vehicle leasing market is stimulating the growth of the vehicle diagnostics market.

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What is the projected compound annual growth rate (CAGR) of the vehicle diagnostics market from 2025 to 2034, and what factors influence it?
Over the recent years, the market size for vehicle diagnostics has experienced accelerated growth. It is projected to surge from $38.09 billion in 2024 to an impressive $44.26 billion in 2025, achieving a compound annual growth rate (CAGR) of 16.2%. Factors like regulatory compliance, increased consumer demand for reliability, pressures regarding vehicle maintenance costs, global expansion of automotive manufacturing, growing vehicle ownership, and fleet management have contributed to this growth in the historical context.

The market size of vehicle diagnostics is predicted to experience a significant expansion in the forthcoming years. By 2029, it's expected to reach a worth of $79.77 billion, powered by a compound annual growth rate (CAGR) of 15.9%. This surge in the projection period can be credited to escalated vehicle sophistication, emphasis on predictive analytics, transition to subscription-oriented services, growth of mobility-as-a-service (MaaS), and an elevated emphasis on sustainability. Emerging trends for the projection period encompass rising implementation of connected diagnostic solutions, proliferation of predictive maintenance solutions, fusion of cutting-edge sensor technologies, a pivot towards software-oriented diagnostics, and the rise of augmented reality (AR) diagnostics.

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How are the latest trends influencing the growth of the vehicle diagnostics market?
Leading entities in the vehicle diagnostics market are concentrating on creating innovations in vehicle battery diagnostic technology, such as MDX-AI, in order to strengthen their market standing. The MDX-AI tool plays a pivotal role in evaluating the health, performance and condition of batteries utilized in various procedures and analyses. For example, Midtronics Inc., a battery management services firm based in the US, introduced MDX-AI - an automotive service equipment orientated battery diagnostic technology - in July 2024. This groundbreaking technology leverages artificial intelligence to deliver speedy and precise assessments of battery health and performance. With MDX-AI, Midtronics aims to abolish the 'Charge and Retest' judgements, offer immediate and precise evaluations of battery health, and guarantee reliable backing for essential functions in electric automobiles, in order to solve the difficulties encountered by service providers when diagnosing battery problems. MDX-AI aids technicians in making accurate determinations on battery health rapidly, thereby improving efficiency and productivity in vehicle maintenance tasks. Furthermore, MDX-AI furnishes superior capabilities, such as exact testing of 12V batteries in electric vehicles, a key factor in ensuring the trustworthiness of safety systems.

What are the major segments of the vehicle diagnostics market and their role in driving growth?
The vehicle diagnostics market covered in this report is segmented -

1) By Product Type: OBD2 Scanner, Multi-System Auto Diagnostic Tool, OBDII Scanner Bluetooth Automotive ECU Coding Diagnostic Tool, OBD2 Car Code Reader Or scan Tool, OBD2 Adapter Check Engine Diagnostic Tool, Smartphone Diagnostic Tool, Other Products
2) By Vehicle Type: Light-Duty Vehicle, Commercial Vehicle, Heavy Commercial Vehicle
3) By Equipment Type: Exhaust Gas Analyzer, Wheel Alignment Equipment, Headlight Tester, Paint Scan Equipment, Dynamometer
4) By Application: Automatic Crash Notification, Vehicle Tracking, Vehicle Health Alert, Roadside Assistance

Subsegments:
1) By OBD2 Scanner: Standard OBD2 Scanner, Advanced OBD2 Scanner
2) By Multi-System Auto Diagnostic Tool: OEM Multi-System Diagnostic Tool, After market Multi-System Diagnostic Tool
3) By OBDII Scanner Bluetooth Automotive ECU Coding Diagnostic Tool: Wireless OBDII Scanner with Bluetooth Connectivity, ECU Coding And Reprogramming OBDII Diagnostic Tools
4) By OBD2 Car Code Reader Or Scan Tool: Basic OBD2 Code Reader, Professional OBD2 Scan Tool
5) By OBD2 Adapter Check Engine Diagnostic Tool: OBD2 Bluetooth Adapter, OBD2 USB Adapter
6) By Smartphone Diagnostic Tool: Mobile App-Based Diagnostic Tools, Smartphone OBD2 Adapter Kits
7) By Other Products: Vehicle Battery Diagnostic Tools, TPMS Diagnostic Tools, Hybrid Or Electric Vehicle Diagnostic Tools, Automotive Performance Diagnostic Tools

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North America was the largest region in the vehicle diagnostics market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the vehicle diagnostics market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.

Who are the key firms paving the way for growth in the vehicle diagnostics market?
Major companies operating in the vehicle diagnostics market are DENSO Corporation, Continental AG, BorgWarner Inc., Snap-on Incorporated, ACTIA Group, AVL List GmbH, OnStar LLC, SPX Corporation, VOXX International Corporation, KPIT Technologies, Launch Tech Co. Ltd., Telemotive AG, Repairify Inc., ETAS GmbH, Magneti Marelli S.P.A., Softing AG, General Technologies Corporation, DSA Daten- und Systemtechnik GmbH, Autologic Diagnostics Ltd., Hickok Incorporated, AVL DiTEST GmbH, Vector Informatik GmbH, Vidiwave Limited, Autel Intelligent Technology Corp. Ltd., Robert Bosch GmbH

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What Is Covered In The Vehicle Diagnostics Global Market Report?

•Market Size Forecast: Examine the vehicle diagnostics market size across key regions, countries, product categories, and applications.
•Segmentation Insights: Identify and classify subsegments within the vehicle diagnostics market for a structured understanding.
•Key Players Overview: Analyze major players in the vehicle diagnostics market, including their market value, share, and competitive positioning.
•Growth Trends Exploration: Assess individual growth patterns and future opportunities in the vehicle diagnostics market.
•Segment Contributions: Evaluate how different segments drive overall growth in the vehicle diagnostics market.
•Growth Factors: Highlight key drivers and opportunities influencing the expansion of the vehicle diagnostics market.
•Industry Challenges: Identify potential risks and obstacles affecting the vehicle diagnostics market.
•Competitive Landscape: Review strategic developments in the vehicle diagnostics market, including expansions, agreements, and new product launches.

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