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The global automotive digital key market size is estimated to grow by USD 891 million at a CAGR of 7.22% between 2023 and 2028. The growth of the market depends on several factors, such as the standardization of using smart devices as keys, accessing multiple vehicles with a single device or application, and the rise of the Internet of Things (IoT). Automotive manufacturers are directing more attention toward incorporating IoT technology into the industry, aiming to introduce novel applications and solutions that render vehicles smarter while augmenting comfort, efficiency, and driving safety. This trend encompasses the integration of IoT for connected cars, keyless entry systems, and smart keys, presenting users with unparalleled convenience and security features. By harnessing IoT capabilities, automotive companies are revolutionizing the driving experience, paving the way for a future where vehicles are seamlessly interconnected and equipped with advanced functionalities that enhance both user experience and overall safety on the road.
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The personal use segment is estimated to witness significant growth during the forecast period. There are various applications for automotive digital keys for personal use by leveraging technology to improve convenience, security, and functionality. The main function of automotive digital keys is to offer keyless entry and start capabilities.
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The personal use segment was the largest segment and was valued at USD 1.1 billion in 2018. The main advantage of these digital keys is that users are able to start their vehicles, which is especially useful for warming up the car interior on cold days or cooling it down on hot days before entering. Additionally, it enables users to provide temporary access to family members, friends, or valets without giving them a physical key. In addition, this feature improves security as the main keyholder can retain control over vehicle access as the main keyholder can retain control over vehicle access. There is an increasing preference for the automotive digital key segment as it offers numerous advantages and can be used for a wide variety of applications that cater to personal preferences, security needs, and modern technological conveniences, which will significantly fuel the growth of this segment which in turn will drive the market growth during the forecast period.
Europe is estimated to contribute 46% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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One of the main factors that are significantly contributing to the growth of the global market in Europe is the increasing demand for the increasing market for car sharing and car rental. Even though the sharing and car rental segment has a lower share in the overall market, the frequent innovation and growing awareness of the use of automotive digital keys will fuel the adoption of this technology across car rental and car-sharing service providers.
Moreover, the growth in the connected infotainment system, which enables the use of digital keys, is expected to grant access to lock/unlock the door through an over-the-air (OTA) update. For example, NXP Semiconductors NV, headquartered in the Netherlands, provides technologies and system knowledge to enable robust, secure, and scalable car access solutions. Hence, such factors are expected to drive market growth in the region during the forecast period.
The market is rapidly evolving, revolutionizing how we access and operate vehicles. Traditional keys are being phased out in favor of smart keys, keyless entry, and connected car technologies. These advancements enhance car safety and convenience, offering a seamless keyless experience. From high-end luxury cars to budget vehicles like Honda, manufacturers are incorporating lightweight materials and cutting-edge technologies like finger vein recognition and face recognition. This shift towards digital keys, including key cards, smart key fobs, and even wearable smart keys like smart watches, is transforming how we start/stop engines, lock/unlock doors, and utilize driver safety features. RFID technology and the Senturion key are also driving this transformation, ensuring a robust security system for modern vehicles. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
One of the main factors driving the market growth is the rise of the Internet of Things (IoT). Automotive manufacturers are increasingly focusing on integrating Internet of Things (IoT) technology into the industry to develop new applications and solutions, making vehicles smarter and enhancing comfort, efficiency, and driving safety. This trend includes the adoption of IoT for connected cars, keyless entry systems, and smart keys, offering convenience and security features. Car safety is also a key focus, with advancements in IoT technology enabling features such as advanced driver assistance systems (ADAS) and improved vehicle security. These trends are gaining popularity across a wide range of vehicles, from high-end luxury cars to budget-friendly models, as manufacturers strive to meet the evolving needs of consumers. This trend includes the adoption of IoT for connected car applications such as fuel tracking, advanced driver assistance systems (ADAS), speed control, and in-vehicle infotainment systems. These factors are positively influencing the market and are expected to drive its growth during the forecast period.
A main factor shaping the market growth is the digital key for all connected systems. The automotive digital key is an emerging trend in the market and a disruptive technology that makes the key virtually available. Another significant development in the research phase in this market is a digital key that can be connected to all the connected devices in the vehicle, including infotainment systems, seats, lighting, and dashboard setup, among others.
For instance, if the user has a digital key that enables access to a vehicle and can customize infotainment, seat adjustments, and ambient lighting, among others, this stores all these settings and activates when the user drives the vehicle with the digital key access. There is an increasing focus on several OEMs, such as Volkswagen, on developing these for all vehicles under one brand. Hence, such factors are positively impacting the market growth during the forecast period.
Cybersecurity issues are one of the key challenges hindering the market growth. Due to the increasing integration of digital technology in vehicles, there are several challenges and cybersecurity issues associated with the market. Additionally, this automotive industry has to comply with different regulatory frameworks related to cybersecurity and data protection. Hence, it is a significant challenge to adhere to these regulations while delivering seamless digital key solutions.
Moreover, these systems are vulnerable to cyber security attacks, and hackers could gain unauthorized access to vehicles. Additionally, digital key systems comprise the exchange of sensitive data between vehicles and devices, and the interception of these data can lead to privacy breaches or theft of personal information. Hence, such factors can negatively impact the market growth, which in turn will hinder the market growth during the forecast period.
Companies are implementing various strategies by analyzing factors such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product or service launches, to enhance their presence in the market.
Apple Inc: The company offers automotive digital keys such as WWDC20 digital key and WWDC21 UWB based digital car key.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Apple Inc., Bayerische Motoren Werke AG, Continental AG, DENSO Corp., Ford Motor Co., Giesecke Devrient GmbH, Hyundai Motor Co., IDEMIA France SAS, Infineon Technologies AG, Mercedes Benz Group AG, NXP Semiconductors NV, Robert Bosch GmbH, Samsung Electronics Co. Ltd., STMicroelectronics International N.V., Telefonaktiebolaget LM Ericsson, Tesla Inc., Thales Group, Valeo SA, Volkswagen AG, and Volvo Car Corp.
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
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The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Million" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The market is rapidly evolving with the integration of face recognition technologies and wearable keys for convenient access and control of vehicles. Features such as engine start/stop and door lock/unlock are being digitized, with Tesla's Model S and smart electric coupe S01 model leading the way. The market's growth is fueled by the rise of the Internet of Things (IoT), but it also faces challenges like cybersecurity threats. However, with improved technological development and smartphone applications, digital keys offer safe and convenient access, heralding a new era in automotive access control systems.
The market is experiencing significant growth driven by the increasing vehicle digitization and demand for car smart keys. This trend is particularly evident in the segment of budget cars, where manufacturers are incorporating environmentally friendly materials. These are equipped with internal chips and buttons for convenient access and control, exemplified by the features found in the Tesla Model S. Despite challenges like cybersecurity threats, advancements in Bluetooth technology and near field communication (NFC) are enhancing mobile connectivity and enabling keyless entry functions with enhanced driver safety. This market evolution is reshaping the automotive industry, offering new business models and improving connectivity in urbanized areas with rising standard of living and disposable income.
Industry Scope |
|
Report Coverage |
Details |
Page number |
181 |
Base year |
2023 |
Historic period |
2017-2021 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 7.22% |
Market growth 2024-2028 |
USD 891 million |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
6.6 |
Regional analysis |
Europe, North America, APAC, South America, and Middle East and Africa |
Performing market contribution |
Europe at 46% |
Key countries |
US, Germany, UK, Sweden, and Canada |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Apple Inc., Bayerische Motoren Werke AG, Continental AG, DENSO Corp., Ford Motor Co., Giesecke Devrient GmbH, Hyundai Motor Co., IDEMIA France SAS, Infineon Technologies AG, Mercedes Benz Group AG, NXP Semiconductors NV, Robert Bosch GmbH, Samsung Electronics Co. Ltd., STMicroelectronics International N.V., Telefonaktiebolaget LM Ericsson, Tesla Inc., Thales Group, Valeo SA, Volkswagen AG, and Volvo Car Corp. |
Market dynamics |
Parent market analysis, market research and growth, Market forecasting, market growth and forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for market forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Vehicle Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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