Automotive Smart Key Market: Current Analysis and Forecast (2023-2030)

Smart key in the automotive sector have gained popularity in the past few decades, owing to their increased security advantages. Automotive OEMs are adopting similar features in their budget cars as implemented in the high-end luxury cars segment. Companies such as Honda, are investing in developing smart keys for their budget car offerings. In addition, the emergence of advanced technology, which makes use of radio frequency signals and converts them to digital information, has popularized the adoption of smart keys in the automotive sector, which is expected to provide ample growth opportunity for smart key adoption in all kinds of vehicles. Furthermore, technological advancement in the automotive sector paired with increasing theft of vehicles would further increase the adoption of smart keys for vehicle security during the forecast period. In addition, companies such as BMW, Volkswagen, and Mercedes-Benz among others are also investing heavily in using lightweight and environment-friendly materials for manufacturing chips for the smart keys. Hence, the trend of using lightweight materials for manufacturing smart keys would provide ample growth opportunities for semiconductor manufacturers as well.

The Automotive smart key market is expected to grow at a strong CAGR of 6% during the forecasted period owing to Increasing technological advancement for vehicle safety and security. The adoption of Advanced Driving Assistance Systems (ADAS) helps the technology in automobiles advance. A remotely operated technology is needed to wirelessly control the vehicle's essential systems in order to synchronize this technology. For instance, in 2021, TOKAI RIKA CO., LTD. made the decision to establish a new cloud business center, Aichi Prefecture, in Nagoya in order to expand its cloud-based company activities, particularly those requiring digital keys. This new organization's main duties will be designing and building systems and applications for digital keys.

Based on technology, the automotive smart key market is segmented into passive keyless entry systems (PKES), remote keyless entry system (RKES). The majority of smart key technologies are based on passive keyless entry technology. Passive keyless entry systems have the benefit of removing the need to carry around a physical key. They also add an extra degree of protection because the key fob can be programmed to only work with specific permitted vehicles or to turn the car off after a predetermined amount of inactivity. For instance, in 2023, the imminent introduction of the Universal Smart Key was announced by Car Keys Express, a U.S. business that replaces car keys.

Based on application, the automotive smart key market is bifurcated into single function, and multi-function. Multi-function smart key dominates the market during the forecasted period. Smart key systems' capabilities are increased by multi-function applications, which give consumers a more thorough and practical experience. Features like remote starting, trunk opening, vehicle locating, automated climate control activation, and customized settings are all possible with these programs. Smart key systems increase customer convenience and enjoyment by offering extra features, making them a sought-after feature for car buyers. Thus, such factors result in the increasing demand for Multi-function smart key in the industry which inturn is increasing the market of automotive smart key market.

Based on vehicle type, the automotive smart key market is bifurcated into entry-segment vehicles, mid-segment vehicles, luxury-segment vehicles. Currently, smart keys are majorly equipped in the luxury-segment vehicles. Overall adoption of multi-function smart keys is growing owing to the rising demands for luxury vehicles equipped with advanced safety and security technologies. Due to the exceptional features of automotive smart keys, luxury automakers like Mercedes Benz (Daimler), BMW, Audi, Lexus (Toyota), Jaguar Land Rover (Tata), Volvo (Geely), Porsche (VW), and Bentley (VW) are heavily embracing this technology. They produce the smart key's chip and buttons from lightweight, environmentally friendly materials.

Based on sales channel, the automotive smart key market is bifurcated into OEMs and aftermarket. OEMs segment dominated the market in 2022. This is mainly due to the improving accessibility for vehicle, many OEMs are providing digital keys to customers on the purchase of cars. Additionally, due to brand confidence and customer loyalty, the majority of customers use services offered by automaker-approved service providers when replacing digital keys, which is expected to drive market growth for OEMs.

For a better understanding of the market, the report is analyzed based on different regions including North America (The U.S., Canada, Rest of North America); Europe (Germany, The U.K., France, Italy, Rest of Europe); Asia-Pacific (China, Japan, India, Rest of APAC); and Rest of World. Asia Pacific is projected to dominate in the global automotive smart key market during the forecasted period. This is mainly due to expanding automotive vehicle production and increased installation of safety features in commercial vehicles and passenger vehicles in the region. Since there are many developed nations in the Asia Pacific that also have cutting-edge research and development centers for digital keys, the use of digital key solutions in the region is projected to increase. For instance, according to the China Automobile Dealers Association, the country's premium car industry sold roughly 2,77,000 units in April 2020, up 11.1% over the previous month. Because of this, it is anticipated that demand for Automotive Smart Key will rise throughout the course of the forecast period. This is because vehicle security systems are becoming more and more technologically advanced boosting the market for automotive smart key.

Some of the major players operating in the market include: Robert Bosch GmbH, Continental AG, Qualcomm Technologies, Inc., HELLA GmbH & Co. KGaA, Denso Corporation, Hyundai Mobis, ZF Friedrichshafen AG, Valeo, Visteon Corporation, ALPHA Corporation Inc.