New York, April 11, 2023 (GLOBE NEWSWIRE) -- According to Market.us, The Automotive Digital Key Market size is projected to surpass around USD 7.7 billion by 2032, and it is poised to reach a registered CAGR of 18.8% from 2023 to 2032. It was valued at USD 1.44 Billion in 2022.
An automotive digital key allows one to unlock and start their car using a smartphone or smartwatch, thanks to advances in technology. Digital keys offer several advantages over analog keys, such as security, convenience, and flexibility; they use Bluetooth, NFC, and other wireless technologies for communication with the car's onboard systems. Furthermore, these keys are easy to revoke or update if lost or stolen - significantly reducing the chance of someone else entering your vehicle.
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Key Takeaway:
- By vehicle type, in 2022, the automotive digital key market was dominated by the passenger vehicles segment due to its increased demand.
- By application, the multi-function segment dominated the market with a 55% share.
- By connectivity, the near field communication (NFC) segment dominated the largest market share in connectivity analysis
- By distribution channel, the original equipment manufacturer (OEM) segment dominated the largest market share in distribution channel analysis
- In 2022, APAC dominated the market with the highest revenue share of 37%.
- APAC is anticipated to have the highest CAGR among all the regions, owing to the increasing demand for connected cars and advanced digital technologies.
Factors Affecting the Growth of the Automotive Digital Key Market
There are several factors that are affecting the growth of the automotive digital key market. These include:
- Increasing demand for advanced vehicle security systems: Due to the increasing number of car thefts and unauthorized access, there is a rising demand for advanced vehicle security systems. Also, automotive digital keys offer a more secure and convenient way to access a vehicle, as they cannot be duplicated as well as can be deactivated remotely if necessary.
- Technological advancements: Technological advancements have made it possible to develop digital keys that are more secure and convenient to use. The use of Near Field Communication (NFC) and Bluetooth Low Energy (BLE) technology has made it possible for vehicles to communicate with smartphones along with other devices, making it easier to unlock and start a vehicle without a physical key.
- The growing popularity of shared mobility services: The increase in shared mobility services such as car-sharing and ride-sharing has risen the demand for digital keys. Shared mobility providers are found several ways to provide convenient access to vehicles without the need for physical keys, and digital keys offer a solution.
- Increased adoption of connected cars: The increasing adoption of connected cars is also contributing to the growth of the Automotive Digital Key sector. Connected cars can communicate with smartphones and other devices, which is helpful to unlock and start the vehicle without the need for a physical key.
- Changing consumer preferences: Consumers are growingly looking for convenience and ease of use while operating their vehicles. Digital keys offer a more convenient and secure way to access a vehicle, and therefore, more consumers are adopting them.
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Market Growth
The automotive digital key market has experienced rapid growth due to several factors, such as increasing demand for advanced vehicle security systems, the rising adoption of connected cars, and the surge in shared mobility services. Furthermore, the COVID-19 pandemic has further fuelled this expansion since consumers seek contactless solutions to access their vehicles.
Asia Pacific is currently the leading market for automotive digital keys due to increasing demand for advanced vehicle security systems and the rising adoption of shared mobility services in countries like China, Japan, and India. North America however, is expected to experience the highest growth rate over the coming years owing to its high adoption rate of connected cars as well as the presence of major automotive players there.
Regional Analysis
Asia Pacific is the most lucrative market for global automotive digital keys, accounting for 37% of total revenue, and is projected to expand at 17.5% over the forecast period. Driven by rising demand for connected cars in developing nations such as India and China, this region has experienced tremendous growth in this space; China being its leading player. North America also plays a significant role with many prominent automobile manufacturers and technology firms investing heavily in cutting-edge digital solutions.
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Scope of the Report
| Report Attribute | Details |
| Market Value (2022) | USD 1.44 Billion |
| Market Size (2032) | USD 7.7 Billion |
| CAGR (from 2023 to 2032) | 18.8% |
| APAC Revenue Share | 37% |
| Historic Period | 2016 to 2022 |
| Base Year | 2022 |
| Forecast Year | 2023 to 2032 |
Market Drivers
Keyless entry and start in an automobile are made easier than ever with automotive digital key technology. Drivers can access their keys via mobile devices, smartwatches, or other electronic devices for easier entry into and starting their cars. As disposable income grows in developing countries, demand for automation and digitization of devices is rising. Consumers increasingly look for advanced features to increase safety and convenience. Furthermore, government initiatives are encouraging vehicle owners to utilize digital key markets to reduce carbon emissions and maximize fuel efficiency.
Market Restraints
Cybersecurity threats such as hacking and unauthorized access can leave digital keys vulnerable, posing a risk to both drivers and vehicles alike. Automotive digital key technology relies on wireless communication for its operation; any compromise could spell disaster for both. Signal interference and other environmental elements can disrupt wireless communication, leading to issues such as difficulty unlocking and starting the vehicle. This makes vehicles more expensive for consumers since creating and implementing such technologies requires more resources. Retrofitting an older vehicle with digital key technology can present additional difficulties for those looking to upgrade their ride. Automotive digital key systems must comply with stringent regulations, such as cybersecurity standards and data privacy laws, which could add complexity and expense when developing and implementing digital key technology.
Market Opportunities
Automotive digital key technology provides the ideal platform for collaboration. By joining forces, technology companies and automotive businesses can promote innovation while simultaneously improving the accessibility and functionality of this cutting-edge system. Due to the COVID-19 pandemic, demand for contactless technology such as automotive digital keys has surged. Digital key technology offers a safer and more convenient alternative to traditional keys, as consumers strive to reduce physical contact while still maintaining safety and convenience. Digital key technology provides personalized access to vehicles as well as the ability to start them without needing physical contact. These keys can also be utilized for remote vehicle control and monitoring, further increasing their utility. Utilizing digital keys in automobiles reduces the environmental impact of traditional keys by conserving resources while decreasing waste production.
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Report Segmentation of the Automotive Digital Key Market
Vehicle Type Insight
Passenger vehicles accounted for the largest market share at 74%, with a projected CAGR of 19.2% in 2022. It is followed by commercial vehicle revenue share at 26.0% in 2022. As more people have access to disposable income, demand for digital-equipped passenger cars has grown rapidly as people strive to enhance their quality of life and social standing through increased spending on luxury models with automated systems. This segment of the market is expanding rapidly.
Application Insight
The market is further divided into multi-function and single-function segments by application. Multi-function is projected to be the most lucrative segment within the global automotive digital key market with a share of 55% along with a projected CAGR of 16.8% by 2022; similarly, single function accounts for a 45% revenue share. Reliable network infrastructure is necessary for the successful implementation of digital key technology; additionally, growing demand for passenger vehicles that offer all features on one device in developing economies has further reinforced this segment's dominance within the sector.
Connectivity Insight
The automotive digital keys market can be divided into further segments based on connectivity: near field communication (NFC), Bluetooth, wi-fi, and remote cloud key access (or other). Near field communication (NFC), which accounts for 30.5% of total revenue in 2022, is predicted to be the most lucrative with an impressive CAGR exceeding 19.5% over the forecast period. NFC is a short-range wireless communication technology that allows data exchange between devices close together; encrypted NFC systems offer superior security features over other technologies and will continue driving growth within this space
Distribution Channel Insight
The market can be further segmented based on distribution channel into original equipment manufacturer (OEM) and aftermarket. The global automotive key market is led by original equipment manufacturers (OEM), with a 57% revenue share and a projected CAGR of 17.7% over the forecast period. Original Equipment Manufacturers (OEMs) are responsible for creating and marketing many automotive digital key solutions. Customers can purchase this technology either as an optional feature or as standard equipment in new cars through the OEM's dealer network. In 2022, the aftermarket is projected to have a market share of 43%. Many companies specialize in developing and selling digital key technology that can retrofit existing vehicles. Aftermarket suppliers can sell their products online, through auto retailers, or through partnerships formed with installation service providers.
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Market Segmentation
Based on Vehicle Type
- Passenger Vehicles
- Commercial Vehicles
Based on the Application
- Multi-Function
- Single-Function
Based on Connectivity
- Near Field Communication (NFC)
- Bluetooth
- Wi-Fi
- Remote Cloud Key Access
- Other Connectivity
Based on Distribution Channel
- Original Equipment Manufacturer (OEM)
- Aftermarket
By Geography
- North America
-
- The US
- Canada
- Mexico
- Western Europe
-
- Germany
- France
- The UK
- Spain
- Italy
- Portugal
- Ireland
- Austria
- Switzerland
- Benelux
- Nordic
- Rest of Western Europe
- Eastern Europe
-
- Russia
- Poland
- The Czech Republic
- Greece
- Rest of Eastern Europe
- APAC
- China
- Japan
- South Korea
- India
- Australia & New Zealand
- Indonesia
- Malaysia
- Philippines
- Singapore
- Thailand
- Vietnam
- Rest of APAC
- Latin America
-
- Brazil
- Colombia
- Chile
- Argentina
- Costa Rica
- Rest of Latin America
- Middle East & Africa
-
- Algeria
- Egypt
- Israel
- Kuwait
- Nigeria
- Saudi Arabia
- South Africa
- Turkey
- United Arab Emirates
- Rest of MEA
Competitive Landscape
In the global automotive digital key market, there are many prominent players. To maintain their market shares, these firms often form partnerships or collaborate with other firms. Denso Corporation and NTT Docomo Inc. joined forces in 2015 to launch a smartphone-based solution that allows you to remotely lock/unlock your car and start it using just your smartphone; Continental AG followed suit in 2015 by launching an electronic key solution that enabled access to your car through your smartphone as well.
Some of the major players include:
- Hyundai Mobis
- Volkswagen AG
- Denso Corporation
- Samsung Electronics Co. Ltd.
- HELLA
- Robert Bosch
- GEA Group (Bock Gmbh) Company Profile
- Tesla Inc.
- Infineon Technologies
- BMW AG
- STMicroelectronics
- Continental AG
- Daimler AG
- Ericsson
- Valeo SA
- Other Key Players
Recent Development of the Automotive Digital Key Market
- Hyundai's digital key technology was launched in September 2021, enabling drivers to unlock and start their Hyundai cars using a smartphone. It uses near-field communication (NFC) technology for communication with the car and is available for select Hyundai models.
- Volkswagen announced in February 2021 that they had joined forces with Samsung to create a digital key platform. This platform works with Samsung smartwatches and smartphones equipped with NFC technology.
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