Whether it’s ride-sharing, vehicle manufacturing, vehicle tracking, or electric cars, blockchain automotive solutions have gained significant traction across industry operations. It is because the automotive industry is dealing with a rapidly evolving market environment. Further, changing consumer demands and technology advancements are fuelling these rapid and profound changes. In this blog, we discover the automotive industry’s most pressing problems and how to address them with blockchain technology and its applications.
Fundamentally, blockchain is a digitally distributed ledger technology. It enables multiple participants in a business network to share an immutable record of transactions. Contextually, immutability means that nobody can edit or delete a transaction record. However, they can append it.
Essentially, a transaction can be the sharing of information of an asset or its status update. It can be a physical entity such as a vehicle, a financial instrument, a loan, or a digital asset, like a software package. Additionally, a supplier, a manufacturer, a distributor, a dealer, a finance provider, a regulator, or a client can be a participant in a blockchain-powered automotive business network.
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Only authenticated parties get access to the ledger, while permissions remain modifiable. Additionally, it is possible to limit access to the distributed ledger to only those you permit. Automatically, any permissioned participant receives a copy of the shared ledger. As a result, information remains more straightforward, transparent, and secure.
Only parties that have received different security certificates can decrypt them. Consequently, it ensures that only the transaction’s explicit stakeholders can access transaction data.
Groups of transactions remain in blocks. Further, after consensus, they get visible on the ledger. Each block also contains a previous block’s hash value, forming a non-changeable connected chain of blocks. Thereby, any update stored in the transaction record and connected by the chain allows assets traceability back to their origin.
Business network participants agree that the shared ledger is the single source of truth or System of Record, resulting in fewer conflicts about transaction information differences between parties.
Increased knowledge openness in the business network will result in:
Blockchain would foster increased confidence among business network participants, minimizing uncertainty in the current business environment and allowing participants to re-deploy working capital elsewhere.
The automotive industry is developing, and blockchain technology is already playing a significant role. For automotive firms, Oodles has extensive experience in custom blockchain creation and deployment. Blockchain implementation can benefit all participants in the automotive supply chain. Oodles team can help you unlock the potential of blockchain automotive growth. Eliminate inefficiencies, strengthen business processes, and take advantage of the industry’s unique opportunities created by blockchain.
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To ensure timely delivery of parts and optimum inventory levels, a manufacturing plant must efficiently collaborate with several tiered vendors, 3rd party logistics, and transportation companies.
A Blockchain-based system can boost just-in-time logistics, minimize inaccurate orders, and increase inventory turns by increasing accountability of correct information between the various parties.
A carmaker must wait weeks or months for payment from an importer, distributor, or dealer for a vehicle shipment. Furthermore, a Letter of Credit issuance by the purchaser’s bank or a Bill of Lading sharing by the manufacturer requires paperwork due to different parties regulating different measures.
On the other hand, a Blockchain-based system will allow for greater transparency of correct information between parties, quicker processing of export/import and banking documentation, and, eventually, a reduction in the time it takes for the producer to collect payment for cars produced.
A vehicle finance firm usually has no idea about its customers’ driving patterns or their cars’ service history. However, driving trends and service events can be on a shared database that all parties can access with a Blockchain-based method.
Indeed, information transparency about a vehicle’s actual wear and tear enables a company to accurately measure a vehicle’s residual value when the lease reaches its end of the contract date.
Periodically, a car manufacturer may choose to give subscribers access to additional vehicles in its lineup. For instance, a family owns a people carrier for commuting to work and dropping the kids off at school during the week. They might get access to a 2-seater sports car for weekends or a camper van for a vacation ride.
A Blockchain-based system will enable a car company to share an owner’s mobility profile. It includes seat settings, environment, and infotainment preferences, between multiple vehicles and even third-party partners like car-sharing or multi-modal transportation providers.
For a car manufacturer, one of the challenges is service centers and garages fitting counterfeit spare parts to their customers’ vehicles knowingly (or unknowingly).
Various stakeholders like a service center, a carmaker, and a consumer can monitor the provenance. They can track details of replacement parts back to their original manufacture date and location with a Blockchain-based system. Moreover, if counterfeit parts are under-performing or worrisome, this will minimize brand harm and repair costs for the carmaker.
For more information about how blockchain technology can disrupt your automotive business, take a consultation call with our blockchain development experts.