IBM Applying Blockchain To Ensure Richer Automotive Experience

IBM Applying Blockchain To Ensure Richer Automotive Experience

Interaction August 2019 IBM Blockchain Richer Automotive Experience

Blockchain is a form of cryptocurrency that is an open, distributed ledger that can record transactions between two parties. Although there have been multiple use case examples of this transaction methodology, confusion still persists over the same. Auto Tech Review caught up with Jitan Chandanani, Blockchain Leader, IBM India/South Asia, to understand this technology, its relevance to the automotive space and its usage as a secure payment gateway in the future.


According to a study conducted by IBM in partnership with Oxford Economics, blockchain will drive improvements and operational efficiencies across a number of areas. These areas of application include supply chain transparency, financial transactions between ecosystem participants, authenticating access to cars as well as customer experience and loyalty. The study revealed that 54 % of executives expect new business models to influence blockchain investments. Similarly, at least 50 % of executives in each country believe that blockchain solutions will have a high impact on fleet management services. Further, 55 % of OEMs and 47 % of suppliers say implementing blockchain will improve imperfect information in their business networks.

This global study was conducted among 1,314 automotive executives, encompassing OEMs as well as suppliers across 10 business areas and 10 countries over the past five years.


The digital revolution in the automotive industry makes blockchain a key focus area, in global as well as Indian markets. Chandanani said blockchain can be a component of the customer experience and the aftersales portion of the industry, which all come beyond manufacturing. Therefore, blockchain acts as a tool in the digital transformation of an industry, and in the automotive space this would include supply chain, aftersales, retail applications and related areas. This technology enables seamless management of operational costs and continuity as well as assists in managing various levels of operational costs that could affect business continuance through a transparent and secure manner, observed Chandanani.

The blockchain technology goes beyond the coverage of supply chain management, and can also be used to track several aspects of a vehicle’s lifespan. This is especially useful in the shared mobility space, where there are multiple users of a single product. Monitoring of the usage pattern and customer behaviour can be used as data to calculate usage fees according to the wear-and-tear patterns of different users. The fact that usage data is employed to calculate the user fee makes this a transparent form of billing, which also provides information about the vehicle health so as to be used for predictive maintenance and upkeep of the vehicle itself.

Another area of use for such information about a vehicle is for insurance purposes. The various digital components of such connected vehicles measure all incidents and accidents involving a certain user, thereby providing appropriate usage-based insurance plans on the level of risk expected. Therefore, the data about a vehicle that is pulled from various sources can be collated without manipulation through the use of blockchain technology, noted Chandanani.

It is clear that the blockchain technology enables multiple use cases only when it provides support to other existing technologies, and thereby improves their overall usability. Chandanani said the technologies that can be supported by blockchain include IoT, GPS, mobile devices and machine learning, with the first three containing sensitive customer information. Blockchain cannot be a standalone solution while targeting a large market, which includes solutions for autonomous vehicles and shared mobility, but can be employed as an independent technology to power supply chain finance and supply chain tracking, he pointed out.


Blockchain creates a connected economy that enables faster settlement of invoices, thereby ensuring that there is increased speed in the inflow of money into a business, Chandanani said. This added cash flow can then encourage businesses to invest these receipts in an improved manner. Therefore, blockchain becomes a new revenue model for OEMs and suppliers to ensure transparency and security of finances. However, as is the case with any new technology, blockchain also still needs to provide OEMs as well as suppliers with value proposition. The main focus area is that blockchain enables the inflow of new money into a growing market.

As a technology, blockchain is highly anticipated, and will require a lot of information to be able to offer solutions it is capable of. While it is seen that blockchain facilitates a connected economy, it will also become a technology that will connect the automotive industry with other relevant industries, Chandanani noted. This ecosystem of connected industries will further enhance the overall customer experience and would permit connecting industries such as personal retail, food & beverage, toll, logistics, and various other industries to offer connected services to customers in the future. A high level of penetration of blockchain would be possible right from personal automobiles to fleet services, Chandanani noted.

It can be concluded that the blockchain technology does not necessarily offer a solution by itself, but rather needs to be combined with other existing industries and solutions to provide a more structured, transparent and secure connected economy. While the adoption levels of this technology are still slow, the benefits they could provide cannot be ignored any longer. The increased adoption of this new-age technology in the automotive industry could pave the way for improved operational functioning and economic stability.

TEXT: Naveen Arul