FREMONT, CA: With an annual growth of 4.8 percent, the automotive industry has the potential for unprecedented technological innovations. However, blockchain is a critical technology that is benefiting the automotive sector in numerous ways. Here are the three ways in which blockchain is driving the automotive industry:
Supply Chain Tracking
Blockchain is best suited for data maintenance. Thus, the technology benefits of supply chain mechanisms by allowing product traceability throughout the supply chain entirety.
Supply chain processes are complex and involve acquiring resources from various places and supplying them to factories and then to the retailers. There are different steps involved in the process, thereby making it difficult to track the operations manually.
With the help of blockchain, it’s convenient to track the supply chain processes at each juncture. Blockchain also ensures that the supply chain complies with the local laws and regulations and that the products are sourced ethically.
For instance, smelters, miners, and consumer brands require a third-party audit for the compliance guidelines, but with blockchain, this dependence gets eliminated.
For a Reliable Trust Protocol
Groupe Renault declared its plans to develop a digital car maintenance book using blockchain technology. The idea is to provide an open architecture with information gathered from multiple parties such as insurers, manufacturers, repair shops, and others while ensuring their accessibility to the customer.
Purchasing and selling a vehicle also benefits from the digital car maintenance book as numerous documents, log book, and certificates are paper-based. Apart from offsetting paper wastage, the transference of documentation also gets convenient.
Most importantly, as blockchain works on a P2P model, it eliminates the middlemen and facilitates direct trade between the buyer and the seller.
Information is Difficult to Falsify
The primary issue with conventional supply chain processes is the distortion of information for unethical gains. While buying and selling vehicles, people forge information that affects the vehicle’s value. According to the National Highway Traffic Safety Administration (NHTSA), every year, more than 450,000 vehicles are sold with the false odometer reading. The odometer records the distance covered by a vehicle.
However, it’s difficult to tamper data with blockchain as the mileage gets recorded. Thus, any discrepancy would imply an attempt of falsification.