Virtual Car Key Market Size
The global virtual car key market size was valued at USD 2.9 billion in 2023. It is projected to reach USD 11.76 billion by 2032, growing at a CAGR of 19.13% during the forecast period (2024-2032).
Traditionally, automobiles were unlocked through keys. However, technological advancements have given rise to more accessible and secure ways to unlock the vehicle, such as virtual car keys. These keys seem like regular car keys, but they only work with an app on a smartphone or a companion wearable.
The virtual car key system is concerned with keys or key fobs sent to a computer or mobile device. Unlike a traditional vehicle key system, the virtual car key technology allows the car key to be copied on a computer or mobile device. It also allows the owner's duplicate key fob or keyless entry system to receive the key. It prevents the hassles of losing a regular key, such as towing the vehicle, replacing the locks, and creating a new key.
Virtual Car Key Market Growth Factors
Added Security of Virtual Car Keys and Keyless Entry to Skyrocket its Demand
A rise in car theft and robbery drive the virtual car key business. Most automobile owners are concerned about their vehicle being stolen or robbed; thus, component manufacturers and software developers devised a technologically advanced solution, namely a virtual car key system, that complements vehicle security. The virtual car key industry is a simple and flexible solution that combines various new services to improve security by preventing theft and robbery. For instance, the National Insurance Crime Bureau (NICB) reported that in 2023, there was a 1% increase in the number of stolen vehicles, surpassing one million.
Further, as the use of physical keys declines, car owners seek more secure ways to protect their vehicles. This ground-breaking invention enables cyber professionals to protect critical sources and automobiles from electronic attackers. The technology recognizes electronic key fobs and authorizes them with a code. The vehicle will only be opened or started if the computer finds that specific code. Several carmakers incorporate computer-encrypted microchips in their keyless systems, which adds to the security layers.
Rising Demand for Keyless Entry System to Increase Demand for Virtual Car Keys
The number of cars equipped with keyless entry devices is rapidly increasing, making life easier by allowing people to travel with fewer belongings. In addition, as people become more aware of vehicle theft, the demand for keyless entry devices has grown. People in developed countries, in particular, are becoming more aware of the importance of adding protection to their vehicles. As a result, the vehicle keyless entry system industry is rapidly expanding, resulting in increased demand for keyless entry systems.
With the introduction of newer technologies, the automotive industry has seen substantial growth. The keyless entry system is a technological advancement that is propelling the market of virtual car key forward. Mercedes-Benz, Audi, BMW, Ford, Volkswagen, and Volvo were among the first to introduce the proximity access system, commonly known as keyless entry. The user does not need to bring the small fob to the vehicle while using the keyless entry system. Users can utilize entry buttons or other methods to get access to their vehicles. The keyless entry system also provides a 1–2 feet entry system for those who don't want to carry the fob all day.
Market Restraints
Lack of Awareness About the System to Swoop Demand
Many consumers are unaware of the system's functionality, limiting the virtual car key market growth. Given the prevalence of smartphones and tablets, a mobile app is crucial to reach customers and create awareness. After installing a keyless entry system in the vehicle, a mobile app for virtual car keys must be downloaded from the Google Play Store or the iOS app store. Nonetheless, the main impediment to market expansion is projected to be a lack of promotion among users, particularly in emerging nations. One of the fastest-growing segments of the automobile industry is in developing countries, such as India and Brazil. Significant promotion operations in these nations might provide enterprises with a substantial potential to grow their market share. Consumers in developing nations are currently unaware of virtual automobile keys.
If you drop and break your phone while out, or if your phone is lost or stolen, virtual car keys become a problem. Furthermore, virtual car keys employ technology that predicts a driver's approach and unlocks the vehicle from up to 30 feet away, significantly less than a typical key fob range. This implies there's a higher chance the car may be stolen as the owner arrives or that a child will start the car while a parent is just outside.
Market Opportunities
Lucrative Opportunities in Developing Countries
The car has been the most important new technology for moving people in the last century. Even though the scientific advancements that enabled internal combustion and electric engines occurred in the late 1800s, it was not until the 1910s that automobiles became sufficiently affordable and reliable to enter the market as a mass consumer commodity. Since then, automobiles have been introduced to practically every country and have served various purposes. Cars enable suburban commuting and the geographic separation of commercial and residential regions, as well as long-distance travel on a flexible schedule and as status symbols.
The total amount of travel tends to increase as the economy is flourishing at the national level. People in nations with higher levels of economic development travel more than people in countries with lower levels of economic growth. People with higher incomes travel more within countries than those with lower incomes. Furthermore, the car's low cost and fuel economy boost sales in developing countries, which creates a window of opportunity for the virtual car key market to grow. Global market players can increase their profit and market share by promoting the virtual car key in developing countries. It is simple to open your automobile with the virtual keys industry. The doors and trunk can be unlocked as long as the key fob is within the range of your vehicle. The customer can get admission by pressing the button on the side of your automobile door handle or trunk handle.
Future Key Trends in Market
The virtual car key market is rapidly expanding. The market is growing as demand for more advanced car safety features grows. As a result, automakers are upgrading their security systems to increase the production of difficult automobile keys. The rising desire for automation will be the next major trend in the virtual car key market expansion.
The NFC chip is a next-generation wireless payment system with a number of advantages and a low risk of forgery. Since RFID and QR codes make data easy to copy and change, they can't guarantee data security or privacy. Data security and forgery can be ensured by incorporating BLE, NFC, and UWB into the virtual automobile key. Car keys would be renewed every year, and the car would be reprogrammed, mandating the use of virtual car key technology.
The electrification of automobiles is a new technology that is quickly gaining traction. Since electric or hybrid-electric vehicles emit fewer emissions, are more fuel-efficient, and are less expensive than traditional gasoline-powered vehicles, an increasing number of automobile manufacturers are selling them to their customers. As virtual car keys technology are a vital part of the system, it is projected to expand in tandem with the expanding demand for electric vehicles.
Regional Analysis
Asia-Pacific dominated the global market at USD 858.7 million owing to the rising need for excellent security solutions, increasing car thefts, growing demand for technologically advanced products, and increased acceptance of connected car solutions. Further, as potential customers become more aware of the multiple benefits of virtual car key systems, demand for remote unlocking and keyless entry systems grows.
Due to the significant adoption of keyless entry systems in the US, primarily in passenger automobiles and light commercial vehicles, North America accounted for the second-largest market with a share of USD 500.0 million in the global virtual car key market. During the forecast period, the market in the region is projected to be driven by the growing need for increased safety and security features in automobiles. Virtual entry technology is utilized for keyless entry and ignition in automobiles and motorcycles.
Segmental Analysis
Based on Types
The global virtual car key market is segmented into smartphones and smartwatches.Smartphones dominate the hardware segment in the global market. The primary objective of Virtual Car Key is to furnish car owners and drivers with digital keys that can be used to lock and unlock their vehicles and initiate the engine from any portable device. The primary factor is that the majority of the global population owns smartphones, while smartwatches and smart rings are the preferred option. For example, the National Institutes of Health (NIH), a government organization, reports that 85% of Americans possess smartphones, while only 31% own smartwatches.
Smartwatches are the fastest-growing segment following smartphones, while smart rings are relatively new to the market, as only one company offers them with an inbuilt virtual car key. For example, Tesla offers Tesla smart rings that can be utilized to unlock the vehicle by simply tapping it with the ring.
By Technology, the global virtual car key market is segmented into Passive and Remote Keyless Entry System.
The virtual car key market is anticipated to experience the most rapid growth in the Passive Keyless Entry (PKE) System type. This technology enhances security and convenience by enabling drivers to unlock and start their vehicles without the need to use a traditional key or press buttons. The system detects the presence of a key fob using low-frequency (LF) signals. The key fob then communicates with the vehicle via radio frequency (RF) to unlock doors or start the engine.
Meanwhile, Remote Keyless Entry (RKE) systems necessitate that users press buttons on a key fob to either unlock or start the vehicle. While RKE systems are still in widespread use, they are gradually being eclipsed by PKE as a result of the latter's superior security and convenience features. The market for RKE systems is substantial; however, growth is slower than that of PKE systems, as consumers are increasingly favoring the seamless experience provided by PKE system.
The virtual car key market is also being influenced by Near Field Communication (NFC) Keyless technology. NFC enables secure access without physical keys by allowing smartphones or smart cards to communicate with the vehicle when in close proximity. The integration of this technology with smartphones is particularly appealing, as it enables the sharing of digital keys and the enhancement of security features. Nevertheless, NFC remains less prevalent than PKE systems, which are the market leaders due to their established infrastructure and user acceptance.
By application, the global virtual car key market is segmented into passenger cars and commercial vehicles.
The application segment of Passenger Cars holds a dominant position in the global market. The passenger vehicles segment holds the largest share of the market in 2021, accounting for 81.19% of the total market share. In 2021, digital keys were installed in more than 2 million passenger cars in China, representing a 243% increase from the previous year's total. It was estimated that more than 54 million passenger automobiles were manufactured worldwide in the year 2020, with nearly 11 million passenger automobiles being sold in Europe. The increasing acceptance of technology-based products in passenger cars is the primary reason for the high growth rate of the passenger car segment.
