Blockchain will make cars safer and cheaper.The auto industry is often accused for being a slow mastodon that stubbornly resists the changes the world demands of it. However, here at VLB Tokens (
www.vlb.io), we see how quickly this industry can transform to a decentralized, efficient and transparent ecosystem thanks to only one innovation the blockchain technology.
In fact, the automotive market is going through the unprecedented changes that most of the people do not see yet. Car makers, IT giants, financial groups are already experimenting with disruptive blockchain applications for the auto market that promise to make everyones life simpler.
The blockchain technology allows creating a single global database that contains information about every car, in a way that no data can be modified without consent of all parties involved. For example, if you get your car repaired at an official repair shop, this information will be available to an insurance company that can give you a cheaper insurance plan, because the official repair shop guarantees the authenticity and reliability of installed spare parts. The information recorded to a blockchain database is always authentic, unchangeable, and up-to-date, which creates trust between all parties and reduces transactions costs as there is no need to verify and manually enter information several times.
Generally speaking, the benefits of using blockchain fall in one of three categories: driving safety, revenue growth and cost reduction.
Driving safety:
Every day, we get in our cars with our families, and we trust that the vehicle is safe to drive. We hope it will not break down and cause an accident, and even in case of an accident it will keep us reasonably safe. Unfortunately, some car manufacturers have a long history of incorporating known defects in their automobiles, defects they work hard to conceal. They may have designed a car with the defect or learned from early testing or in-the-field crash reports that the defect exists, but they will often continue to deny the existence of the defect. They may make payments to victims on condition of silence, quietly recalling cars for unrelated minor problems.
Car manufacturers that deploy blockchain technology will prove that they are fully transparent and open for their customer communities, and their vehicles have no hidden defects. In case a new defect is found, it will be immediately assessed and fixed by independent repair shop or a car manufacturer. The blockchain technology transforms car manufacturing towards an open source software model, which allows everyone to test code and flag vulnerabilities. A subsequent effect on the market will be clear: every perspective car owner would prefer a reliable car tested and proved by a blockchain, not just by a marketing slogan.
Revenue growth:
Not only car manufacturers and dealers can expect their revenues grow as a result of blockchain deployment. Repair shops and insurance companies can increase their top line by offering personalized and customized solutions to clients. For example, with access to vehicle maintenance history, road incidents and driving-related information, insurance companies can design more efficient insurance plans, and repair shops can offer necessary preventive maintenance, recommended by car manufacturers. Connecting to the VLB infrastructure all market players will get additional clients from CarFixs customer flow and cross-marketing activities.
Cost reduction:
Using smart-contracts the VLB platform will automate insurance claim processing, decrease fraudulent claims and the number of car recalls, ensure MSRP (manufacturers suggested retail price) adherence by repair shops and dealers. Transaction cost reduction comes as a result of increased trust between all market players, increased reliability of information that should not be manually entered and verified several times, and better inventory management due to availability of data that did not exist before. For example, car manufacturers will have access to real-time data about original spare part demand by region and by specific SKU# and will be able to plan geographic supply chains with greater precision, efficiency and granularity down to specific repair shops.
The list of opportunities that each market participant gets from having access to the Vehicle Lifecycle Blockchain is endless. Here are most obvious examples of VLB benefits:
· Vehicle manufacturers will get transparency in warranty claim repairs, more granular inventory management, safer and more reliable cars, and fewer vehicle recalls.
· Car owners will enjoy improved car safety, lower car maintenance costs, and benefit from a smooth car purchase and maintenance processes.
· Insurance companies can get the data to make their policy plans more efficient, decrease the costs of claim management and processing.
· Repair shops will get more customers from the ecosystem, and can offer new preventive maintenance services, based on real-time driving data.
· Auto dealers will set more fair prices in used car transactions and trade-ins and lower their transaction costs of car purchase and selling.
· Auto lenders will benefit from more business opportunities to give loans for costly repairs or predictive maintenance, to provide working capital loans to repair shops.
· Distributors and OEMs will get improve warranty claims management by checking the authenticity of installed spare parts and improve their inventory management.
· Finally, government regulators will be able to monitor the adherence of vehicles technical parameters to regulatory norms
Overall, the application of blockchain technology for the auto market will make cars safer and cheaper, and their maintenance will be less time consuming and stressful.