Global Market Size, Forecast, and Trend Highlights Over 2025-2037
On-board Diagnostics AfterMarket size was valued at USD 5.3 billion in 2024 and is projected to reach USD 62.4 billion in 2037, witnessing over 20.9% CAGR during the forecast period i.e., between 2025-2037. In 2025, the industry size of on-board diagnostics is assessed at USD 6.4 billion.
The growing consumer preference for safety in vehicles has assisted the growth of the on-board diagnostics (OBD) aftermarket. Initially designed to monitor vehicle performance and emissions, on-board diagnostics (OBD) systems have become integral to vehicle diagnostics, offering real-time data. The OBD aftermarket has a complex supply chain involving component manufacturers to end-users. Businesses in the market are investing to strengthen the regional supply chains to mitigate disruptions. Moreover, several macroeconomic trends influence the OBD aftermarket, such as the rising consumer awareness and demand for electric vehicles (EVs), the automotive industry’s shift towards digitalization, and modernizing aging vehicle fleets. The rising average age of vehicles globally is a significant driver of the market. The table below highlights the aging data of vehicles in the U.S. which is expected to drive the demand for OBD aftermarket services.
Average age of vehicles in the U.S.
|
Year |
Average Age of Light-Duty Vehicles |
|
2023 |
12.1 |
|
2022 |
11.9 |
|
2021 |
11.8 |
Source: The U.S. Department of Energy
Moreover, mandates to bolster fuel economies benefit the adoption of advanced OBD systems that monitor emissions and fuel consumption. For instance, the U.S. fuel economy has improved in recent years, highlighted in the table below.
|
Particular |
Details |
|
Fuel economy increase in 2023 |
1.1 mpg increase and reaching a record high of 27.1 miles mpg |
|
Fuel economy increase rate from 2004 to 2023 |
40%, or 7.8 mpg |
Source: The U.S. Environmental Protection Agency (EPA)
It is in the interest of the stakeholders to maintain the improvements in fuel economy, with the growth in the U.S. market set to embolden mandates across the globe. The consumer behavior in automobile purchases indicates a greater demand for fuel-efficient vehicles which bodes well for the future of the on-board diagnostics sector. Moreover, investors seeking to enter the OBD aftermarket should consider the industry’s alignment with broader automotive trends, such as the push for the integration of the Internet of Things (IoT) and telematics which has expanded the potential applications of OBD systems.
On-board Diagnostics AfterMarket: Growth Drivers and Challenges
Growth Drivers
- Technological advancements in vehicle diagnostics: The advent of AI in OBD systems has expanded their diagnostic capabilities. In January 2024, Microsoft highlighted the Mobility Copilot reference architectures across multiple use cases across the value chain to bolster creativity by leveraging AI and credited the automotive industry’s push to develop a standard for OBD systems in EVs at the forefront of revolutionizing solutions. AI assistants for automotive repair workshops are expected to significantly improve vehicle diagnostics and offer real-time insights to mechanics. SAE International’s research indicates that over 70% of automotive repair shops are actively investing in EV-compatible diagnostic tools to remain relevant in the competitive aftermarket.
- Integration with fleet management solutions: The proliferation of telematics in commercial fleets has amplified reliance on OBD-derived data for real-time vehicle monitoring. In February 2025, Car IQ in collaboration with Visa highlighted the advantages of cardless fleet payments, and the solutions offer opportunities for businesses in the OBD aftermarket to ensure that fleet managers can automate diagnostics, predict maintenance, and optimize costs in real-time. AI-based predictive maintenance has been successful in reducing emissions which bodes well for the inculcation of on-board diagnostic systems to provide accurate analytics of vehicle health. Additionally, consumer behavior highlights a greater push for preventive maintenance to ensure greater vehicle longevity and negate higher spending on vehicle repair over the years.
- Surging demand for emissions compliance & sustainability: A significant driver of the on-board diagnostics (OBD) aftermarket is the enforcement of stringent emission standards by regulatory bodies worldwide. Euro 7, China VI, and the Tier-5 standards are a few highlights of regulatory directives requiring low emissions from passenger vehicles. Independent repair shops and consumers are increasingly using aftermarket OBD scanners to perform emission tests and troubleshoot issues preemptively. Furthermore, the International Council on Clean Transportation (ICCT) notes that post-purchase diagnostic tool usage has surged in regions with phases of emission regulations, such as Europe and APAC, to extend vehicle compliance lifespans.
Challenges
- Compatibility issues with diverse vehicle systems: The lack of standardization across vehicle manufacturers, vehicle types, and regions poses hurdles for aftermarket OBD tool developers. Automakers often leverage proprietary communication protocols, software, and encryption methods which cause constraints for universal diagnostic tools to access data accurately. For instance, luxury automakers such as Mercedes-Benz and BMW employ advanced encryption that limits third-party access to critical systems.
- Concerns associated with cybersecurity: The hyperconnectivity of IoT in OBD devices by integrating smartphones, cloud platforms, and telematics systems has broadened the scope of vulnerability. While the challenges create unique opportunities for vendors to offer OBD tools with enhanced security, any lapses in data privacy can affect a business’s reputation. The need of the hour for aftermarket manufacturers is to adopt robust encryption measures to mitigate security lapses.
On-board Diagnostics: Key Insights
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
20.9% |
|
Base Year Market Size (2024) |
USD 5.3 billion |
|
Forecast Year Market Size (2037) |
USD 62.4 billion |
|
Regional Scope |
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On-board Diagnostics Segmentation
In on-board diagnostics (OBD) aftermarket, fleet management segment is set to capture revenue share of over 52.8% by 2037, owing to rising integration of telematics. Fleet operators leverage OBD-based telematics systems to bolster operational efficiency and monitor driver behavior. A key facet of the segment is the expansion of ride-sharing and ride hauling services worldwide which enhances the scope of opportunities for aftermarket vendors to provide diagnostic tools for large fleets. Opportunities in the segment arise in the development of advanced analytics platforms that utilize OBD data to predict maintenance requirements.
The consumer telematics segment is likely to register rapid growth due to surge in e-commerce and last-mile delivery service. The growth can be highlighted by the U.S. Department of Commerce’s findings on rising online retail, which is tied to the demand for real-time vehicle tracking and delivery transparency. Moreover, a demand from fleet operators serving in consumer markets is driver safety, which can be improved by the integration of advanced on-board diagnostics tools. Furthermore, AI-powered OBD systems can predict delivery delays based on vehicle health data for performance optimization.
Platform (Fixed-Wing Aircraft, Rotary-Wing Aircraft)
The fixed-wing aircraft segment of the on-board diagnostics aftermarket is estimated to expand and provide opportunities to investors and businesses alike by the end of 2037. A key facet of the segment’s growth is the rise in air travel around the world, supported by the lifting of COVID-19 restrictions. The rising air travel increases the requirement of maintenance and MRO services for fixed-wing aircraft. The emphasis on predictive maintenance and structural health monitory drives a steady demand for on-board diagnostics. Furthermore, fleet operators seek cost-effective solutions which expands the scope of opportunities for vendors in the aftermarket offering on-board diagnostics tools.
Our in-depth analysis of the global on-board diagnostics (OBD) aftermarket includes the following segments:
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Application |
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Platform |
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Application |
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End user |
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Customize this ReportOn-board Diagnostics Industry - Regional Scope
North America Market Forecast
North America in on-board diagnostics (OBD) aftermarket is set to capture over 48.5% revenue share by 2037, owing to the proliferation of advanced OBD systems to monitor and negate emissions due to the enforcement of stringent emission standards. The regulatory ecosystem has spurred demand for aftermarket tools that assist in maintaining compliance. Moreover, North America has a burgeoning automobile aftermarket led by the U.S. and Canada which assist the growth of the OBD diagnostics aftermarket. The aftermarket for automobiles is set to remain a lucrative investment opportunity in North America in the backdrop of growth in disposable income in households, and rising demand for personal vehicles.
The U.S. on-board diagnostics (OBD) aftermarket is poised to exhibit robust growth throughout the forecast period owing to mandates by the EPA to monitor and report emission-related malfunctions. Aftermarket tools that can effectively diagnose and repair emission-related issues are expected to garner greater adoption. Along with federal mandates, state-level mandates such as California’s CARB OBD-II standards have set a benchmark for vehicle diagnostics. Emerging drivers of the U.S. market are the rise of usage-based insurance (UBI) and vehicle telematics, which have spurred insurers and fleet managers to rely on OBD data for real-time insights on driving behavior, fuel efficiency, and maintenance requirements.
The Canada on-board diagnostics aftermarket has been shaped by the Zero-Emission Vehicle (ZEV) mandates encouraging the adoption of EV-compatible diagnostic tools. The Environment and Climate Change Canada has administered the On-Road Vehicle and Engine Emission Regulations to ensure that vehicles sold in Canada meet strict emissions and fuel economy standards. Moreover, the Automotive Service Information Standard (CASIS) facilitates greater access to OBD data for independent repair shops, ensuring market competitiveness. Furthermore, the climate conditions in Canada play a role in the demand for robust vehicle diagnostics that can monitor the cold-weather performance of automobiles.
Asia Pacific Market
The APAC on-board diagnostics (OBD) aftermarket is poised to expand at a rapid pace during the forecast period. An APAC-wide trend is the proliferation of low-cost multilingual OBD devices tailored to the region’s fragmented automotive market, characterized by KEI cars of Japan, compact vehicles from India, and imports from Europe. Japan, China, and South Korea are mature aftermarkets for on-board diagnostics in APAC, while India is a rapidly emerging economy in the region. The ASEAN Economic Community’s sustained push for harmonized emissions testing further amplifies opportunities for cross-border diagnostic tool standardization.
Due to the robust electrification agendas, the China on-board diagnostics market is poised to account for a dominant revenue share in APAC. The China VI emission standards mandate real-time OBD monitoring of particulate filters, creating demand for advanced diagnostics in commercial and passenger vehicles. A distinct feature of the market is the integration with the New Energy Vehicle (NEV) ecosystem. OBD tools with EV-specific standardization and metrics are set to experience greater adoption by the end of 2037. The dual emphasis on emissions compliance and smart mobility characterizes China’s lucrative market.
The India on-board diagnostics market is projected to expand during the forecast period. The vast network of independent repair garages in the country catering to cost-conscious consumers is a major driver of the market. The nationwide rollout of the BS-VI emissions norms in 2020 led to a major market shift with older vehicles requiring retrofitted OBD-II scanners to comply with mandatory annual fitness tests. The market is also shaped by localized solutions with startups such as GoMechanic and RevX offering OBD tools catering to semi-urban workshops. The B5.6 and B6.7 regulations have ensured that key players the India market must earn the certification to remain ahead of the competition.
Companies Dominating the On-board Diagnostics Aftermarket
- Bosch
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
- Continental AG
- Delphi Technologies
- Autel Intelligent Technology
- Snap-on Incorporated
- Harman International
- Vector Informatik
- Innova Electronics Corporation
- Denso Corporation
- Launch Tech
- KPIT Technologies
- Actia Group
- Softing AG
The on-board diagnostics (OBD) aftermarket is forecasted to exhibit robust growth throughout the stipulated timeframe. Dominant companies in the aftermarket are diversifying product portfolios and forging strategic alliances to capture market share. The advent of AI-powered diagnostic tools has ushered a paradigm shift in the sector and has improved the prediction of component failures. Microsoft has predicted that the push for standardized OBD systems for EVs will usher the next wave of innovations in on-board diagnostics.
Here are some key players in the on-board diagnostics (OBD) aftermarket:
In the News
- In January 2024, Forward Thinking Systems (FTS) announced the integration of OBD-II (On-Board Diagnostics II) diagnostics and telematics data into its FleetCam Pro dash camera. The over-the-air firmware update will enable the FleetCam Pro to connect directly to the vehicle’s Engine Control Unit (ECU) through an OBD-II port.
- In February 2023, Cummins Group India announced the completion of the Bharat Stage-VI (BS6) OBD II emissions standard compliance certification tests with the Automotive Research Association of India (ARAI). The certification process comprised Engine Testing, Onboard Diagnostics (OBD) demonstration, and vehicle-level emission testing using the Portable Emission Measurement System (PEMS).
Author Credits: Saima Khursheed
- Report ID: 7186
- Published Date: Feb 18, 2025
- Report Format: PDF, PPT
