Blockchain for Automotive: spare parts and warranty

By | 2 minute read | June 21, 2017

This is the sixth and final blog post that examines how the Automotive industry will be impacted by Blockchain.

In this post I elaborate two use cases that have enormous potential in the area of spare parts and warranty.

Identification of counterfeits

A car manufacturer is concerned that service centres and garages in certain markets are knowingly (or otherwise) fitting counterfeit spare parts to their customers’ vehicles. Counterfeit parts jeopardise the manufacturer’s brand reputation when they under-perform or even worse, cause accidents.

A Blockchain based system connected with IoT sensors and smart devices would enable the service centre, the car manufacturer and the customer to trace the provenance of spare parts back through every step in the supply chain to its original manufacture date and location.

Currently, it can be a difficult and costly exercise for a Warranty team to identify if a warranty claim has been made against a genuine part or if the part in question is counterfeit, grey market or end-of-life. Using a Blockchain system that provides full traceability of part history will make it easy for the Warranty team to identify counterfeits quickly. Over time this will deter fraudulent behaviour and reduce warranty costs.

Targeted recalls

When a car manufacturer determines a part is defective and may jeopardise the safety of the driver, passengers or other road users, they issue a recall notification to inform vehicle owners to bring their car into an authorized service centre so that a replacement part can be fitted. However, because most car manufacturers are not able to uniquely identify every part in every vehicle sold they need to issue the recall for a specific model and model year; which can include several 10s of 1,000s of vehicles. Yet at the end of the recall period, it sometimes becomes apparent that the defective part is only fitted in several hundred vehicles. Thousands of customers have been disturbed unnecessarily and recall costs prove to be far higher than necessary.

A Blockchain based system that enables the car manufacturer to uniquely identify every single part will save a huge amount of money in the event a future recall is required; because the manufacturer will know which defective part was fitted to which specific vehicles and hence they will be able to issue specific recalls for individual VIN numbers. The manufacturer will be able to repair just those vehicles at far lower total cost; than if a blanket recall for an entire model-year were issued. Take a look at our YouTube video that illustrates the Car Leasing scenario and if you’re really interested, check out some of the tutorials on https://developer.ibm.com/blockchain/.

Learn more about Blockchain

  • You can read the other posts in this series here.
  • Please get in touch with an IBM representative if would like to find out more how IBM can help you with Blockchain.
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