Automotive Digital Key Market

Growing Demand for Vehicles with Advanced Digital Features and Rise of Internet of Things (IOT) to Fuel Growth of the Automotive Digital Key Market

The Automotive Digital Key Market is valued at USD 4.3 Bn in 2026 and is projected to reach USD 10.9 Bn,  growing at a CAGR of 14% by 2033.The increase in demand for smart vehicles in developing economies, due to rising disposable income and fuel prices, will contribute to the growth of the automotive digital key market. For instance, in 2019, more than 90 million automobiles were sold globally, of which 63 million passenger cars were purchased, roughly double the number of commercial vehicles sold that year. However, the increased integration of luxury features in vehicles, such as advanced driving assistance systems, is forcing vehicle manufacturers to develop advanced vehicle security systems. The increased use of smartphone applications in vehicles is also driving the integration of digital key solutions in vehicles.

New technological advancements that expand the features of digital keys to include more car functions will provide digital key market participants with lucrative opportunities. In September 2019, Honda vehicles now have Continental AG's smartphone key access solution installed. The CoSmA solution from Continental will allow Honda owners to open the vehicle or share the key with others using only their smartphone. They can unlock the vehicle remotely via Bluetooth Low Energy using the My Honda+ App (BLE).

The rise of Internet of Things (IoT), rapidly growing automotive industry innovations, and ease of use make automotive digital key market progress. Embedding IoT technology in the automotive field, developing new applications and solutions, making cars smarter, and providing comfort, efficiency, and driving safety has always been a priority for automotive manufacturers, and is expected to drive the growth of the global automotive digital key market. Nonetheless, digital key solution research and development is expanding. BMW is gaining popularity for offering its digital car key on the iPhone in collaboration with Apple. Aside from Apple, Samsung has been seen working with Ford, Audi, and Genesis.

Safe and Convenient Vehicle Access of NFC to Drive Growth of Automotive Digital Key Market

Near field communication (NFC) has the largest market share and is expected to maintain its dominance over the forecast period. A card or smartphone that supports NFC to allow safe and convenient vehicle access. NFC-based solutions increase flexibility and cost-effectiveness by allowing car owners to use NFC to lock/unlock and start/stop the vehicle via smartphone apps. Aside from connectivity, NFC is essential in the innovative car access control system that supports new business models and smartphone-centric solutions, as well as for sharing, leasing, and fleet management. The digital key management system reduces the cost and complexity of key management. The NFC also provides a unique long-term value by allowing the vehicle to be unlocked and started even when the mobile phone's battery is low.

Advanced Digital Key Research and Development Facilities in Asia Pacific to Drive Growth of Automotive Digital Key Market

Asia Pacific accounted for a substantial share of the global automotive digital key market. Asia Pacific has a significant presence of developed countries with advanced digital key research and development facilities, which is likely to increase the use of digital key solutions throughout the region. The automotive industry in this region is rapidly changing, with vehicles increasingly becoming digital. Automotive digital keys are being developed by manufacturers to provide advanced features over conventional keys, such as enhanced driver safety features, connected automobiles, IoT Market, and keyless entry, among others. Furthermore, key players in the automotive digital key market are constantly working on the development of RFID-enabled key cards, smart key fobs, and wearable smart keys, or smart watches. All of these factors contribute to the growth of the automotive digital key market in this region.

China dominates the Asia Pacific automotive digital key market. China is the global hub for automotive markets. Demand for keyless entry access systems is increasing rapidly in the Chinese, and Indian markets, as various Chinese, and Indian companies launch vehicles with keyless entry features, which is expected to propel the automotive digital key market in China, and India. Companies in the automotive digital key market anticipate future growth opportunities in China's auto industry, owing to rising e-commerce adoption.

In January 2019, Leap Motor, introduced a biological entry system with the launch of their smart electric coupe S01 model in China. These vehicles will be outfitted with a "Leap In" biological lock/unlock system that integrates finger vein recognition, and face recognition technologies, providing customers with a keyless experience from the moment they enter the vehicle to the moment they start the engine. Similarly, in September 2019, Xpeng Motors was the first smart car to be equipped with the Alibaba In-Car Mini APP. It includes vehicle-to-app interaction in real time with a digital smart key. It also has AI-powered vision and voice interaction, as well as individual user settings that allow the seat, mirrors, steering wheel, and even audio preferences to be adjusted automatically.

Global Automotive Digital Key Market: Competitive Landscape

In March 2020, Tokai Rika Co., Ltd., and Kimura Unity Co., Ltd. began joint demonstration tests of a digital key system-based service for company vehicles. The digital key is stored in a mobile application and is sent to the user's smartphone, where it is used to lock or unlock the doors. This enables the use of company vehicles without the need for key exchange and reduces the use of traditional keys. On the other hand, in December 2019, Ericsson and Microsoft have formed a partnership to develop secure and accelerated cloud services for the next generation of connected cars. By combining Ericsson's Connected Vehicle Cloud and Microsoft's Connected Vehicle Platform, automobile manufacturers have been able to accelerate the global production of connected car services. The integrated, combined platform solution enables automakers to rapidly deploy and scale global vehicle services such as fleet management, over-the-air (OTA) software updates for vehicles, and connected safety services.

A few of the players in the automotive digital key market include

• Continental AG
• Aptiv PLC
• DENSO Corporation
• Harman International (Samsung)
• Bosch (Robert Bosch GmbH)
• Valeo SA
• NXP Semiconductors
• Infineon Technologies AG
• Qualcomm Technologies, Inc.
• Samsung Electronics Co., Ltd.
• Apple Inc.
• Google LLC (Android Digital Key / Google Wallet)
• LG Electronics / LG Innotek
• Sony Semiconductor Solutions Corporation
• ASSA ABLOY

Global Automotive Digital Key Market is Segmented as Below:

By Product Type

• Smart Keyfob
• Key Card
• Smart Watch

By Vehicle Type

• Passenger Cars
• LCVs
• HCVs

By Sales Channel

• OEMs
• Aftermarket

By Region

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