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Automotive Test Equipment Market

Market Study on Automotive Test Equipment: Analysing the Swift Developments in Automotive Test Equipment Industry, PMR Foresees a Host of Revenue Generation Opportunities for Market Participants

A Detailed Analysis of the Automotive Test Equipment Market Based on Growing Demand for Product Testing, Stringency of Regulatory Standards, and Rapid Improvements in Technology

Automotive Test Equipment Market

The global automotive test equipment market is forecast to expand at a moderate CAGR of 4.3% and thereby increase from a value of US$3.4 Bn in 2023, to US$4.6 Bn by the end of 2030.

Attributes

Key Insights

Automotive Test Equipment Market Size (2023E)

US$3.4 Bn

Projected Market Value (2030F)

US$4.6 Bn

Global Market Growth Rate (CAGR 2023 to 2030)

4.3%

Historical Market Growth Rate (CAGR 2018 to 2022)

3.8%

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Market Introduction and Definition

Automotive test equipment comprises a distinct classification of instruments and tools that are specifically engineered to assess and guarantee the functionality, security, and adherence to regulations of automotive systems and components. The testing instruments comprise an extensive variety of apparatus, including dynamometers utilized to evaluate engine power and diagnostic equipment designed for electronic control systems.

Significant growth has been observed in the demand for precise testing solutions due to developments in automotive technology. Automotive test equipment is of paramount importance in ensuring quality throughout the manufacturing process as it assists manufacturers in the detection and rectification of defects prior to the vehicles' release into the market. Furthermore, with the increasing complexity of automotive systems, there is a growing demand for advanced testing instruments, which catalyze advancements in this industry.

There are numerous factors that contribute to the expansion of the worldwide automotive test equipment market. To ensure adherence to rigorous regulatory standards and a growing focus on vehicle safety, the utilization of sophisticated testing instruments is imperative. Additionally, the ongoing development of automotive technologies—such as autonomous and electric vehicles—requires the implementation of advanced testing techniques, thereby increasing the need for state-of-the-art testing apparatus.

Furthermore, the market's growth is propelled by the increasing recognition among manufacturers of the critical nature of thorough testing in augmenting the dependability and efficiency of their products. Furthermore, the influence of globalization and the interdependence of the automotive supply chain increases the importance of standardized testing protocols, thereby promoting the worldwide adoption of automotive testing equipment. The confluence of these elements drives the market forward, suggesting a positive trajectory for the automotive test equipment industry over the coming years.

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Market Growth Drivers

Increasing International Focus on Vehicle Safety Standards

The increasing international focus on vehicle safety standards emerges as a significant catalyst promoting the expansion of the automotive test equipment industry. Automotive safety has come under increased scrutiny from governments and international regulatory bodies in recent years, compelling manufacturers to make substantial investments in sophisticated testing solutions.

A regulatory environment has been established in response to the growing concern for public safety, which mandates exhaustive testing procedures to ensure that vehicles meet or surpass predetermined safety standards. The regulatory push is notably conspicuous in developed automotive markets, where the increased adoption of automotive test equipment has been catalyzed by organizations such as the National Highway Traffic Safety Administration (NHTSA) in the US, and the European Commission's rigorous safety regulations.

Consequently, automotive manufacturers are obliged to incorporate state-of-the-art testing technologies into their manufacturing procedures. Due to the increasing intricacy of vehicle designs, which incorporate cutting-edge driver assistance systems (ADAS), electric propulsion, and autonomous capabilities, a thorough safety testing methodology is required.

Automotive test equipment, which encompasses a variety of devices such as sensor calibration devices and collision simulation tools, is of utmost importance in ensuring the integrity and dependability of these advanced automotive systems. Manufacturers, aware of the possible financial and reputational repercussions that may result from safety recalls, are actively allocating resources towards cutting-edge testing solutions to proactively detect and address safety concerns while they are still in the developmental stages.

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Market Restraints

Financial Pressure on Producers

Notwithstanding the increasing need for automotive test equipment, a significant limiting factor on the international market is the financial duress imposed on producers. There are significant initial investments required for the integration of advanced testing technologies, such as the procurement of sophisticated apparatus and the instruction of personnel on how to operate these complex systems.

The automotive sector especially presents difficulties for SMEs in allocating substantial financial resources towards the implementation of state-of-the-art testing solutions. The substantial financial investment required for the procurement and integration of automotive test equipment poses a significant impediment to its extensive adoption, particularly among lesser market participants.

Intricate Testing Requirements

The global automotive test equipment market is confronted with a significant obstacle in the form of testing requirements that are inherently intricate due to the swift progression of automotive technologies. Ongoing advancements in domains, including electric propulsion, connectivity, and autonomous driving, give rise to complex systems and components that necessitate the implementation of sophisticated testing methodologies.

The intricate software, sophisticated driver assistance systems (ADAS), and complex electronics that comprise the multidimensional nature of contemporary vehicles present a formidable obstacle for testing tools attempting to validate these features exhaustively.

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Opportunities

Rising Demand for EVs

A significant opportunistic factor propels the expanding global automotive test equipment market, the rising demand for electric vehicles (EVs), which has led to a corresponding upswing in research and development (R&D) endeavors. Amidst the automotive industry's paradigmatic transition towards eco-friendly and sustainable mobility solutions, there has been a significant surge in the demand for EVs.

In addition to consumer preferences for cleaner transportation, stringent regulations that promote the reduction of carbon emissions are also contributing to this transition. As a result, automakers are obligated to allocate resources toward the advancement of energy-efficient technologies and electric drivetrains, giving rise to a rapidly expanding market for automotive test equipment specifically designed for electric vehicles.

Given that the testing requirements for electric propulsion systems are notably distinct from those of conventional internal combustion engines, the rise of EVs presents a unique opportunity for the automotive test equipment market. In this context, it is critical to have testing instruments that can evaluate the performance, efficiency, and safety of battery systems, electric drivetrains, and charging infrastructure.

The increasing endeavors of manufacturers to commercialize groundbreaking electric vehicles correspond to a corresponding surge in the need for specialized testing solutions. At this time, there is a favorable circumstance for businesses operating in the automotive test equipment industry to foster innovation and provide customized solutions that effectively tackle the unique obstacles presented by electric vehicle technologies.

Analyst’s Viewpoint

The worldwide automotive test equipment market is positioned for significant expansion, propelled by a convergence of elements that collectively constitute a vibrant and encouraging environment. An important factor driving this expansion is the increasing emphasis on ensuring the safety of vehicles and adhering to rigorous regulatory requirements. To guarantee the safety and performance of vehicles, governments and international organizations are placing a greater emphasis on the necessity of rigorous testing; consequently, automakers are compelled to invest in cutting-edge automotive testing equipment.

The increased scrutiny, specifically in well-established automotive markets like North America and Europe, drives the need for testing solutions, establishing safety as a pivotal driver of market growth. The dynamic characteristics of automotive technologies, such as autonomous and electric vehicles, are significant factors influencing the trajectory of the automotive test equipment market in the coming years.

With the increasing integration of these advancements into the automotive industry, manufacturers are obliged to implement state-of-the-art testing methodologies to verify the performance, dependability, and safety of these sophisticated systems. The progression of technology not only expands the range of testing instruments available but also encourages innovation in the industry, establishing a mutually beneficial connection between technological innovations and the need for advanced testing solutions.

The worldwide automotive test equipment market is experiencing substantial expansion due to an assortment of factors, including increased safety regulations, technological progress, and the dynamic automotive environment. The complex dynamic between producers and consumers, in conjunction with the sector's receptiveness to emerging technologies, positions the market favorably for continued expansion and advancement in the foreseeable future.

Supply-side Dynamics

The existence of significant industry participants, including Bosch Automotive Service Solutions Inc., ABB Ltd., Honeywell International Inc., and Siemens AG distinguishes the automotive test equipment market. These titans of their respective industries maintain their dominance by utilizing their technological prowess and extensive global reach. With respect to market adoption, North America, and the United States in particular, stands out as a dominant region.

The strong automotive sector in the US, propelled by prominent manufacturers and rigorous regulatory frameworks, stimulates the need for cutting-edge testing equipment. The extensive use of automotive test equipment by the us automotive industry to assure compliance with safety and emission standards, for instance, significantly contributes to market expansion.

The market leaders in automotive test equipment exert significant influence over its structure by means of ongoing innovation and strategic alliances. Prominent industry participants make substantial investments in research and development, which results in the release of state-of-the-art testing solutions. A few instances of industry benchmark-setting products include ABB's precision testing equipment and Bosch's advanced diagnostic tools.

Strategic collaborations also exert an impact on the competitive environment, as participants establish alliances with automotive manufacturers to offer tailored testing solutions. This trend is exemplified by the partnerships between Siemens, and major manufacturers, which affect the trajectory of the market by ensuring that testing solutions are tailored to the evolving requirements of automotive technologies. These dominant companies' unceasing quest for excellence not only establishes benchmarks for the industry but also drives the market forward with sustained expansion and technological progress.

Market Segmentation

What Type of Testing Equipment is Dominant?

Vehicle Emission Test Systems at the Forefront Owing to Strict Adherence to Environmental Regulations

It is anticipated that the vehicle emission test system segment will hold the highest market share in the automotive test equipment market. The global market's strict adherence to environmental regulations necessitates efficient emission testing solutions; therefore, manufacturers must prioritize this sector to guarantee vehicle compliance with emissions standards and mitigate the ecological consequences of their products.

The growing emphasis on environmentally friendly and sustainable transportation serves to underscore the criticality of vehicle emission test systems within the broader market. Concurrently, the fastest-growing market segment is anticipated to be wheel alignment testers. The increasing stringency of vehicle safety and performance standards underscores the criticality of precision wheel alignment.

The increasing consciousness among consumers regarding the criticality of accurate wheel alignment in relation to tire longevity, fuel efficiency, and safety drives the demand for sophisticated wheel alignment testers. As an increasing number of automotive manufacturers and service centers place a premium on technologies that improve the overall performance and safety of vehicles, this sector is anticipated to experience robust growth.

Which is the Top Application Area?

PC/Laptop-based Testing Systems Reign Supreme

It is anticipated that the PC/laptop-based scan tool segment will hold the most market share in the automotive test equipment market. The extensive utilization of personal computers and laptops in automotive diagnostics, which offers a flexible and comprehensive platform for testing and analysis, is the reason for this segment's dominance. The widespread adoption of PC/laptop-based scan tools in the automotive industry can be attributed to their adaptability and compatibility with a wide range of systems.

On the contrary, the mobile device-based scan tool sector is anticipated to undergo the most rapid expansion. The demand for portable and convenient scan tools is fueled by the integration of smartphones and tablets into automotive diagnostics and the growing trend of mobility.

Mobile device-based scan tools' user-friendly interfaces and accessibility accommodate the changing preferences of technicians, thereby fostering the exponential expansion of this sector within the ever-evolving automotive diagnostic equipment industry.

Which is the Leading Vehicle Type Segment in the Market?

Growing Focus on Passengers’ Safety Secure Leadership for Passenger Cars

The greatest market share is anticipated to be held by the passenger car segment of the automotive test equipment market. The significant worldwide output of passenger cars, coupled with the growing concern for passenger well-being and efficiency, stimulates the need for advanced testing methodologies in this industry sector.

The prominence of the passenger car segment is propelled by the demand for comprehensive testing apparatus to analyse the various systems and components of passenger cars, which continue to dominate the automotive market. Simultaneously, the light commercial vehicle (LCV) sector is positioned to undergo the most rapid expansion. The increasing scale of commercial operations, specifically in the domains of e-commerce and logistics, propels the need for dependable and effective LCVs.

The increased need for sophisticated testing equipment to guarantee the optimal performance and safety of LCVs, in conjunction with the rising demand for such vehicles, positions the LCV segment of the automotive test equipment market for swift expansion.

Top Regional Markets

North America to Capital the Maximum Amount of Testing Equipment

North America is strategically positioned to hold the largest market share in the global automotive test equipment field. The prevailing position of the region is ascribed to its firmly established automotive sector, which is distinguished by its advanced technological advancements and rigorous regulatory frameworks.

Major automotive manufacturers are based in North America, and the region's emphasis on safety and emission regulations and its dedication to implementing cutting-edge technologies are key factors driving the demand for automotive test equipment. In addition, the strength of the North American aftermarket for automotive testing and services contributes to the continent's prominence in the international market.

Opportunities Flock South Asia, and Oceania

South Asia, and Oceania Flourish on a Combination of Swift Economic Growth, and Expanding Disposable Income

South Asia, and Oceania, on the other hand, are anticipated to experience the most rapid expansion of the automotive test equipment market. The combination of the region's swift economic growth and the expanding automotive sector, especially in nations such as Australia, and India, stimulates the need for sophisticated testing solutions. The region's demand for automotive test equipment is propelled by a combination of evolving emission standards and heightened consumer awareness regarding vehicle safety.

Moreover, the increasing preference for electric vehicles in certain South Asian nations introduces an additional level of intricacy to testing prerequisites, thereby cultivating a dynamic market environment, and offering prospects for expedited expansion in the South Asia, and Oceania area.

Competitive Intelligence and Business Strategy

Strategic initiatives are utilized by the market leaders of automotive test equipment to maintain and increase their market share. These initiatives capitalize on a blend of technological expertise, international reach, and partnerships within the industry. Prominent entities in the industry, such as Bosch Automotive Service Solutions Inc., ABB Ltd., Honeywell International Inc., and Siemens AG, maintain a competitive edge through the implementation of comprehensive strategies.

A pivotal tactic implemented by these prevailing entities is the perpetual advancement of novel product developments. Prominently allocating resources towards research and development, their objective is to unveil state-of-the-art testing solutions that effectively tackle the ever-changing demands of the automotive sector. By remaining at the forefront of technological developments, Bosch, for example, concentrates on the creation of sophisticated testing apparatus and diagnostic tools. The dedication to innovation not only appeals to prospective clients in search of cutting-edge solutions but also guarantees customer loyalty through the provision of tools that adapt to the swiftly evolving automotive industry.

In addition, the market share of the dominant companies is substantially augmented by strategic partnerships with primary stakeholders in the automotive sector. Siemens engages in collaborative efforts with prominent automotive manufacturers to deliver customized testing solutions that are in line with distinct technological progressions. These collaborative alliances not only bolster the product portfolios of the respective companies but also foster robust connections with pivotal stakeholders in the automotive industry. Through their comprehension and resolution of the distinct testing requirements of their partners, these market leaders fortify their standing as reliable allies within the fiercely competitive industry.

Key Recent Developments

Collaboration

In June 2023, Applied Intuition, and NI joined forces to accelerate the validation testing of autonomous technologies. This collaboration will result in an end-to-end solution applicable to connected advanced driver assistance systems (ADAS), and autonomous driving (AD) validation workflows. The partnership aims to empower engineers by enhancing the efficiency and safety of developing and validating ADAS and AD systems, ultimately providing cost-effective solutions.

Applied Intuition, specializing in simulation and software solutions for ADAS and AD systems, offers a platform enabling users to test and validate autonomous vehicle (AV) software in a virtual environment. Meanwhile, NI brings an extensive ADAS and AD test portfolio, comprising customizable hardware and software tools for real-time testing of these systems. This strategic collaboration promises to advance the capabilities of autonomous technologies and streamline the validation process for industry professionals.

(Source: Automotive Testing Technology International)

New Facility Establishment

Actia established its vehicle inspection center in March 2020 in both the Philippines and Laos, where it will conduct tests on heavy goods vehicles, light vehicles, and motorcycles. The initial forty inspection centers were established in the Philippines under the designation QWIK. Moreover, Actia established two inspection lines for light and substantial materials in Laos.

Market Impact: The March 2020 establishment of vehicle inspection centers by Actia in the Philippines and Laos represents a significant development in the worldwide automotive test equipment market. Actia satisfies the growing need for thorough vehicle inspections and adherence to safety regulations in Southeast Asian nations through the provision of comprehensive testing services for heavy cargo vehicles, light vehicles, and motorcycles. This advancement further complements the global focus on vehicle safety and performance and highlights the market's reaction to the expanding globalization of testing services.

(Source: Actia)

Automotive Test Equipment Market Report Scope

Attribute

Details

Forecast Period

2023 to 2030

Historical Data Available for

2018 to 2022

Market Analysis

US$ Million for Value

Key Regions Covered

  • North America
  • Latin America
  • Europe
  • South Asia & Pacific
  • East Asia
  • The Middle East & Africa  

Key Countries Covered

  • United States
  • Canada
  • Germany
  • United Kingdom
  • France
  • Italy
  • Spain
  • Russia
  • China
  • Japan
  • South Korea
  • India
  • Thailand
  • Malaysia
  • Indonesia
  • Australia
  • New Zealand
  • GCC Countries
  • South Africa  

Key Market Segments Covered

  • Types of Testing Equipment
  • Application
  • Vehicle Type
  • Region

Key Companies Profiled

  • Bosch Automotive Service Solutions Inc.
  • Honeywell International Inc.
  • ABB Ltd.
  • Siemens AG
  • Horiba, Ltd.
  • Delphi Technologies
  • Softing AG
  • Actia Group
  • AVL List GmbH
  • SGS Group

Report Coverage

  • Market Forecast
  • Company Share Analysis
  • Competition Intelligence
  • DROT Analysis
  • Market Dynamics and Challenges
  • Strategic Growth Initiatives  

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Automotive Test Equipment Market Research Segmentation

By Types of Testing Equipment:

  • Chassis Dynamometer
  • Engine Dynamometer
  • Wheel Alignment Tester
  • Vehicle Emission Test System
  • Misc

By Application:

  • Handheld Scan Tool
  • Mobile Device-Based Scan Tool
  • PC/Laptop-Based Scan Tool

By Vehicle Type:

  • Passenger Car
  • LCV
  • HCV

By Region:

  • North America
  • Europe
  • East Asia
  • South Asia & Oceania
  • Latin America
  • Middle East & Africa

- Companies Covered in This Report -

  • Bosch Automotive Service Solutions Inc.
  • Honeywell International Inc.
  • ABB Ltd.
  • Siemens AG
  • Horiba, Ltd.
  • Delphi Technologies
  • Softing AG
  • Actia Group
  • AVL List GmbH
  • SGS Group

- Frequently Asked Questions -

The market for automotive test equipment has been projected for a value CAGR of 4.3% during the projected period.

Globally, the automotive test equipment market size is presently around US$3.4 Bn as of 2023.

The US currently holds the largest market revenue share of the market in 2023.

Some of the prominent players in the market are Bosch Automotive Service Solutions Inc., Honeywell International Inc., ABB Ltd., Siemens AG, Horiba, Ltd., and Delphi Technologies.

The LCV segment is expected to grow at the fastest CAGR during the forecast period.

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