The global on-board diagnostics (OBD) market is slated to grow at a significant rate through 2030, owing to the increasing adoption of remote vehicle diagnostic systems used for service cycle schedules and more.

Increasing technological advancements in the field of vehicle diagnostics and the rising demand for advanced automotive technologies would foster the industry expansion.

Growing activities from leading industry players are expected to further drive the revenue growth. In December 2020, CalAmp, a technology firm, and Coastr, formerly known as Nuvven, announced a partnership to disrupt the global car rental business. Through the partnership, Coastr and CalAmp want to fully digitize car rental companies and start competing with key market players by adopting the CalAmp Telematics Cloud (CTC) as well as edge computing on-board diagnostics (OBD) technology.

The on-board diagnostics (OBD) market has been segmented in terms of vehicle type, component, applications, and region.

Based on components, the industry has been classified into hardware, software, and service.

The software segment is set to garner a CAGR of more than 25% through the forthcoming years attributed to the increasing demand to transform tablets or smartphones into portable onboard scanners for collecting diagnostic information from users.

Meanwhile, the service segment is expected to build-up a 20% market share through 2030 credited to the burgeoning enterprise demand to outsource OBD services and focus on core operational processes which will drive segmental growth.

With respect to hardware, the onboard diagnostics (OBD) market has been bifurcated into OBD scanners and OBD dongles.

The OBD dongles segment is poised to gain a substantial CAGR of nearly 25% through the analysis timeline as OBD dongles with telematics functionalities are becoming increasingly popular with OEMs, as well as insurance providers, who use them to promote PAYD-based insurance premium options for payment based on the driver’s driving skills and overall vehicle status which will help propel industry growth.

In terms of software, the sector has been divided into PC-based OBD scanning tools, and apps (OBD telematics platforms). The PC-based OBD scanning tools segment garnered a market share of more than 55% in 2021 and is expected to expand at an exponential rate over the review timeline owing to the broad data storage capabilities of PC-based tools.

Based on service, the on-board diagnostics (OBD) market has been categorized into training and consulting, integration and maintenance, and managed service. The integration and maintenance segment registered a market share of more than 35% in 2021 and is subjected to witness positive expansion over the forecast years as the increasing demand for robust vehicle diagnostics solutions for automobile repair and maintenance will fuel the growth of the segment.

In the meantime, the managed service segment is slated to grow at a sturdy CAGR of over 30% through the estimated timeframe due to the growing desire among businesses to outsource OBD services and focus on core business operations.

With respect to application, the industry has been separated into consumer telematics, fleet management, car sharing, and usage-based insurance (UBI). The consumer telematics segment held a market share worth $400 million in 2021 and is poised to garner considerable market growth through 2030. Meanwhile, the UBI segment is set to register a substantial CAGR of approximately 30% over the review timeline.

From the regional perspective, the North America on-board diagnostics (OBD) aftermarket recorded a $4 billion market valuation in 2021 and is projected to witness robust industry growth through 2030.