How is the Blockchain Adoption In Automotive Industry transforming the market?
The automotive industry has perpetually been one of the early adopters of advanced technologies which have unquestionably paved the way for innovation. The automotive companies have to invariably deal with the changing preferences of the customer while simultaneously keeping track of the market demands to remain in the business. They require a sturdy mechanism to keep track of some of the significant challenges they have been facing which includes data privacy, claim processing, payments and supply chain visibility. Blockchain adoption in automotive industry offers the correct infrastructure to address these problems of the industry all the while assuring efficiency through process automation.
One of the significant issues that plague the automotive industry is the deliberate replacement of the original spare parts of the vehicles with counterfeit parts by service centre owners. These forged parts underperform most of the times. This, in turn, affects the brand reputation of the manufacturer. In this scenario, a blockchain-based trace and track system can be adapted to track the origin of these spare parts right from the point of their origin till the end-users by verifying every step in the supply chain.
The cars are becoming increasingly autonomous with each passing day. Security is expected to become the primary challenge for auto manufacturers and other stakeholders. With greater connectivity, there is a higher chance of deadly cyber-attacks. To prevent cyber-attacks and keep the data streams protected from the hackers, blockchain technology is beneficial.
The involvement of third-parties such as insurance, maintenance and even cleaning services usually require car owners to reveal personal information. The use of blockchain allows customers to manage personal data and share that information with the third-parties. The processing of insurance claims in the automotive industry is an extremely slow and tedious process. Blockchain can be used to streamline and automate the process which would ultimately result in the easy and quick processing of claims.
The payment process for a car purchase is very time consuming and the manufacturer has to wait for weeks before it receives the payment for the shipment of a car. The delay is generally caused due to the involvement of multiple parties in the payment process and the documents verification process from the bank that involves a lot of paperwork. The adoption of the blockchain-based system would enable greater transparency of accurate information between different parties, faster processing of bank documents and would ultimately result in the reduction of the settlement period.
The service records of a vehicle play a major role in the evaluation of the resale value to a vehicle. To prevent the forgery of the records by the customer or the third parties, blockchain technology can be used to enable service event details to be stored in a shared ledger that all parties have access to. The transparency of information about a vehicle’s service history allows the secondary buyer or the manufacturer to better evaluate the vehicle.
The adoption of blockchain technology in automotive industry has disrupted the market. Over the last few years, blockchain technology has been taking the automobile industry by storm by providing greater oversight and accountability in the automotive supply chains, sales, logistics and everything in between.