Frost & Sullivan’s mobility team pegged how much the automotive industry is expected to invest in blockchain technology during the next eight years.

As the digitization trend sweeps across industry verticals, analysts acknowledged blockchains have begun to capture a bigger share of IT budgets. By 2025, Frost & Sullivan projected the total automotive industry's spending on technology is expected to be approximately $168.80 billion with 0.6 percent investment on blockchain technology.

Frost & Sullivan explained that this decision is being made due to blockchain’s value in smart manufacturing, supply chain logistics, retailing & leasing, connected living & IoT (Internet of Things) and mobility services. The firm went on to mention OEMs primarily employ blockchain technology in financial applications, but in the long term, they will extend their use to functional areas such as smart manufacturing and connected cars.

Frost & Sullivan’s new analysis titled, “Blockchain Technology Revolutionizing Automotive Industry,” provides in-depth insight of key areas in the automotive industry that can utilize blockchain technology.

“OEMs are only gradually waking up to blockchain technology's benefits of real-time monitoring, auditability and scalability in an era of connected living,” Frost & Sullivan mobility research analyst Meena Subramanian said.

“Stakeholders all along the value chain are showing great eagerness to harness the power of this technology to achieve best-in-class decentralization, transparency and security,” Subramanian continued.

Meanwhile, Frost & Sullivan pointed out financial divisions in the automotive industry are forming consortiums to frame policies that will help them comply with regulations on a global level. For instance, earlier this year Bosch, Cisco and many start-ups formed a consortium to build IoT applications based on blockchain technology.

“By 2025, the penetration rate of blockchain technology in functional areas such as retailing & leasing, supply chain logistics, mobility solutions, smart manufacturing, connected living & IoT is expected to be at approximately 37.2 percent,” Subramanian said.

“The most successful solution providers will be the ones that create tailored ideas and products that address business requirements, recurring issues, as well as process automotive use cases,” Subramanian went on to say.

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