Latin America presents a series of specific challenges for the automotive original equipment manufacturers willing to operate in the region, among which is a deeply rooted and institutionalized unofficial aftermarket, where cheaper generic, counterfeited (generally of Asian origin) or even stolen replacement parts are commercialized, sometimes as authentic.
However, as vehicles become increasingly software-oriented, interconnected with their environment by the Internet of Things (IoT) and autonomously driven, a new automotive ecosystem is forecasted to be redefined, enabled by innovative technologies, proposing a solution to what up to now was a resigned coexistent relationship among OEMs, alternative distributors, insurance companies and customers.
Having the value of the digital crypto-currency "Bitcoin" increase astonishingly in the past months, much of the public attention has been drawn into understanding the revolutionizing technology that supports it, Blockchain, and its multiple possibilities of application in the different industries.
Beyond its application in financial services, stocks trading, insurance, health care and energy management, certainly it presents some promising prospects for the Latin American automotive industry as well.
Blockchain architecture applies data cryptography and peer-to-peer networking technology to create a digital decentralized public ledger that records transactions and secures them simultaneously in multiple nodes.
Each valid transaction is verified and added as a new block to the chain, becoming an unmodifiable record. This system powers more than 700 digital currencies backed up by general network consensus, which is a key element in this technology's functioning.
Now, as data become the fundamental resource to be mined and administered, Blockchain proposes a disruptive way for auto makers, dealerships, aftermarket distributors, used car dealers, insurance companies and consumers to manage transactions, in a more reliable, secured and personalized way.
Traditionally, each manufactured vehicle has a vehicle identification number (VIN) assigned to it as it comes off of the assembly line. This 17-digit code helps to identify specific vehicle's features, such as OEM, model, year, country of origin or type of engine.
When a customer decides to go to a dealership to replace a broken light or mirror, check the engine or simply get the annual routine service, the clerks at the workshop identify and track the specific replacement part codes and prices out of a centralized database accessible only to official dealerships, decoding the VIN number.
However, in this customer-dealer relationship, there is always a natural asymmetry of information, as most of the times the driver is not familiar with technical specifications of his or her vehicle's (mal)function.
Imagine a more extensive identification code for each individual vehicle. Imagine a decentralized node network that acts as a full-time, ever-expanding ledger of each of the thousands of parts that compose a vehicle (and of the entire vehicle), permanently reporting data from the time the parts were manufactured, assembled, suffered failures or reached their conventional life span/usage limit, until disposal.