SOURCE: The Freedonia Group, Inc.

May 18, 2005 15:06 ET

Automotive Diagnostic Products Demand in the US to Reach $1.1 Billion in 2009

CLEVELAND, OH -- (MARKET WIRE) -- May 18, 2005 -- US demand for automotive diagnostic equipment, software, services and data is expected to grow 5.9 percent per year to $1.1 billion in 2009. Forces driving growth include continued increases in light vehicle electrical and electronic content and system sophistication; the ongoing shift from shop-owned "big box" devices to technician-owned handheld systems; new regulations; an increased need for reprogramming electronic systems at the service level; and the abilities of equipment manufacturers to maintain innovation-based pricing levels. These and other trends are presented in Automotive Diagnostic Products, a new study from The Freedonia Group, Inc., a Cleveland-based industrial market research firm.

Diagnostic equipment demand will increase 5.3 percent annually to $855 million in 2009, with the scanner, engine analyzer and oscilloscope category experiencing the fastest growth. Two key transformations in diagnostic equipment have occurred over the past decade: hardware has shifted toward digital technology, and the availability of powerful, compact electronic systems has enabled the shift from "big box" shop floor systems to handheld diagnostic units. Furthermore, the introduction of PC/Windows-based systems opens the door to the total commoditization of hardware, with software becoming an increasingly valuable part of the business.

Demand for published repair and diagnostic data is forecast to grow 3.0 percent annually to $110 million in 2009. Forces restraining growth include the integration of these materials into other tools, and the trend toward standardization of diagnosed systems. Nevertheless, the growing number of light vehicle models available in the US, as well as their increasing complexity, will promote demand for specific diagnostic and repair information.

Diagnostic software will experience rapid annual growth in demand, at over 10 percent per year, through 2009. Growth will be driven by the introduction of new, more powerful diagnostic hardware that will allow the use of more expensive software of greater capability and by the trend, begun in 1993, of reprogramming in-car flash memory. Remote diagnostic services demand will grow strongly on the strength of increased telematics penetration among new light vehicles, and by the growing penetration of wireless local communication, which could allow diagnostic checks to be made wirelessly from service stations and other facilities.

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