Blockchain Technology – Key For The Growth of Automotive Industry

Blockchain technology looks to be one of the next frontiers of support system with the possibility of delivering high quality ledger-based solutions to the automotive industry. The technology will be able to make key processes ever more streamlined and deliver massive improvement to compliance approval in a framework that is much more efficient and user-friendly that the systems currently in place today. Blockchain is a technology that is rapidly poised to revolutionise core functions across a whole range of industries, not least car manufacture. Spending on blockchain looks set to take as much as 0.6% of the industry’s total IT budget by the 2025, as it makes its way to the core of tracking, provenance, supply chain organisation, insurance, leasing and a host of further commercial processes.

Technology of Tomorrow

The automotive industry is a massive market in its own right, comprising thousands of different companies in supply and manufacture. Traditionally, it’s been one of the benchmarks for a country’s economic performance on the global stage, and with blockchain it seems likely that the industry as a whole will be taking a big leap into the future thanks to the technologies potential application with regards to improving efficiency in supply chain management and workflow operations. Accurate and responsive record keeping is a critical part of any business, and the automotive industry is no different. Across the automotive industry and its subsidiary markets, there are dozens of potential applications for blockchain, the biggest of which are already on the cusp of being implemented:

Parts Verification

One of the problems specific to the automotive industry is the use of fake parts in car manufacture and modification. The issue is illustrated by a January 2017 seizure carried out by the Abu Dhabi Department of Economic Development that saw the confiscation of half a million fake components worth over $4m USD. Illegal components can devalue vehicles and, far more importantly, put the safety of drivers at risk. With blockchain, the origins of a part can be traced from it’s manufacture batch at the factory to the car it ends up in, making it impossible for fake parts to be used.

Product Recalls

Product recalls due to manufacturing faults can be difficult to comprehensively effect and requires high levels of transparency when it comes to collating and tracking the data on the cars in these events. Blockchain is an ideal remedy to these issues and is certain to make these processes exponentially easier to complete for both the industry and its consumers whilst helping drive up production and engender more confidence in the market.
Many people are picking electric cars for the benefits they provide to the environment. Blockchain technology could help guarantee the source of the electricity they charge they’re cars with to see if the power comes from a renewable source or not.

The second hand car market has long been plagued by “clocking” whereby unscrupulous sellers or dealership manually reduce the mileage gauge on the car to make it seem to have been less used. With blockchain, it’ll be impossible to tamper with that data, and there’s potential to use the technology to give every car it’s own passport so owners can see just where it’s been.
Telematics is the use of data to record the behaviour of a car or driver. With blockchain, both drivers and insurers will have a completely secure means of passing on the cars telematics data, allowing insurance issues and crash reports to be verified more rapidly.

Untouchable Data

North America looks to be the first major territory to embrace blockchain technology in the automotive industry, where it’s easier for the new technology to penetrate the manufacturing process. China will most likely be soon to follow, as the state can unilaterally implement innovations in manufacture across this economic sector if it so chooses. Specifically, there are certain scenarios in driving where blockchain technology is certain to have a big impact.