How Blockchain Can Revolutionize The Automotive Industry
The automotive industry has always been very forward in accepting and implementing the latest technology to streamline their operations and introduce advanced features in newer models. So, it should come as no surprise that when Blockchain technology made its foray into the world, the automobile industry was one of the firsts to welcome it with a positive outlook.
With an estimated annual growth of 4.8 percent, this industry thrives on technological innovations. Since Blockchain has been deemed as the technology of the future, no automaker can think of growth without it. There are various ways the automobile industry can benefit from blockchain solutions:
- The dealers can fully automate processes like sales, servicing, warranty claims, etc. through smart contracts.
- Blockchain is a decentralized ledger that offers full transparency in any type of transaction to manufacturers, dealers, service centers and customers.
- The technology also provides a tamper-proof log containing records of auto servicing and wear and tear details about spare parts. This helps in estimating the right resale value of the car.
- The buyer and the seller can avoid third parties or middlemen in case of transactions and insurance claims
APPLICATION OF BLOCKCHAIN IN AUTOMOTIVE INDUSTRY
Given under is a detailed analysis of various ways in which blockchain solutions can be applied in the automobile industry:
There are multiple parties involved in a car purchase such as the manufacturer, dealer, consumer, bank, loan provider (in case you are getting a car loan), insurance company and the likes. The entire process involves a ton of paperwork and verification, thus making the processing time consuming and complicated. With application of blockchain, one can expect absolute transparency and accuracy in exchange of information between the parties involved. With faster documentation, the manufacturer receives the payment quickly and the car is delivered to the buyer within a very short time.
TAMPER-PROOF SERVICE RECORDS FOR RESALE EVALUATION
Authentic service records of the car are essential to estimate the actual resale value. However, more than often these records are falsified and forged. Blockchain technology can put an end to that. All details about the car’s service will be available in a shared ledger, which the involved parties will have access to. Once the information is logged, it cannot be tampered with. This kind of accuracy and transparency allows the buyer to get the exact evaluation of the vehicle.
EXACT CAR RECALLS
Car manufacturers often face the recall issue, where they are to notify the customers of a certain defect in the vehicle that might interfere with their safety while driving. Even if the defect is in a few cars, it becomes hard to identify the exact ones. So the manufacturer has to notify all the customers who have bought the specific car model. The process is time-consuming, incurs a heavy financial loss, not to mention the hassle that both the manufacturer and the customer have to face. Taking the help of blockchain solutions, the manufacturer will be able to identify the exact units that have defective parts and notify those customers only. This saves both time and money.
TRACKING AUTHENTIC VEHICLE PARTS
The application of blockchain technology in the automotive industry can put an end to parts counterfeiting. It can help create a centralized database of authentic parts, making sure that all parts sold are real. Apart from that, it will also help the buyer get information about the availability of a specific auto part, its distribution across manufacturers and dealers. It will be of great benefit to the manufacturer to track the distribution.
OPTIMIZATION OF INSURANCE CLAIMS
Issues with auto insurance claims are nothing new. Insurance companies are often blamed for inadequacy when it comes to the management of claims or issuance of the insurance policy. This happens due to poor distribution and access of data. Blockchain can be instrumental in perfecting that by providing accuracy and transparency to all the participants. It can also be great to prevent insurance frauds since blockchain ensures transparency in verifying claims.
Besides the above-mentioned, blockchain is also relevant in auto subscription and rideshare services that are gaining prominence among consumers. Even government bodies like DMV, the traffic court and Toll Roads can smoothen their functioning and improve their efficiency through the use of this technology.
BLOCKCHAIN GAINING MOMENTUM IN THE AUTOMOTIVE INDUSTRY
The automotive industry has already taken the initial strides towards the implementation of blockchain technology. The year 2018 saw the launch of MOBI or Mobility Open Blockchain Initiative that brought together automobile giants like General Motors, BMW, Renault, and Ford together with blockchain development companies like IBM, ConsensSys, and Accenture, etc. Others like Blockchain at Berkeley and World Economic Forum are also a part of MOBI.
This year in February, a 2-day seminar was conducted in Munich at the BMW Group IT Center by all the MOBI members. The main aim of this meeting was to promote and develop ways in which this distributed ledger technology can be implemented in the automotive industry.
Blockchain technology was indeed introduced as a way to verify cryptocurrency exchanges, however that is just the tip of the iceberg. The automobile industry is one of the many that can benefit from this marvel of technology. It is only a matter of time that Blockchain becomes a part of our day to day living with successful implementation across industries all over. the leading blockchain development companies and industry leaders have already started the journey towards that future.