Market research done in 2018 by strategy and marketing consultancy, Simon-Kucher & Partners revealed that consumers are interested in blockchain for a number of reasons and that they are willing to pay more for these solutions. Using the results from the study titled “Blockchain in the Automotive Industry,” they firm calculated that blockchain technology will generate almost $120 billion in the next 10 years!
Automakers and industry stakeholders need to co-operate and work together to unlock this immense potential that blockchain technology holds. VINchain’s long list of partners is testament to this, as it allows them to offer services such as reduced insurance premiums, vehicle history reports, and car services (purchased with VIN tokens).
Here’s a list of blockchain-enabled functions that consumers are interested in and willing to pay a premium for:
Arguably the biggest application of blockchain that motorists are interested in is automated payments. More than half of vehicle owners surveyed indicated that they find the idea of automated payments for things like toll fees, charging and gas stations, and parking the most appealing. In fact, 17 percent of all respondents said they are willing to pay as much as $7 for this.
The study revealed that data security is a major concern among consumers, and a half of those surveyed said that blockchain’s ability to protect data access draws them to the technology. Overall, 7 percent of respondents indicated that they will pay up to $11 for this feature.
Blockchain technology achieves a high level of data security through smart-contracts. These contracts can be set up with certain conditions to restrict access to only a select number of users, thereby protecting valuable data.
Third on the list of features that attract consumers to blockchain technology is the ability for it to save them time, such as warning about traffic congestion. The study revealed that 48 percent of car owners found this to be a major drawcard to blockchain, with a whopping 27 percent saying they are willing to pay a premium of up to $11 per month for this feature.
This feature is made possible by the immense data collecting ability of blockchain. Data such as location and vehicle speed of millions of vehicles can be added to a blockchain, which applications can then access (with permission) to warn drivers of traffic congestion on their planned route.
We live in an era where technology allows us remote access and control of things like home security cameras, lights, and sprinkler systems. However, more advance uses like remote control of vehicles is not too far away, in fact, auto manufacturers are already experimenting with blockchain technology to allow things like remote locking and unlocking of cars. This is definitely a move in the right direction, as 46 percent of participants in the survey indicated that they are interested in this type of technology, with 12 percent willing to pay as high as $8 per month for the convenience.
Reliable data is also among the top things consumers want from blockchain technology. When purchasing used cars, buyers want to make sure they’re not getting bamboozled by sellers. To this end, vehicle history reports have become a standard feature in the used vehicle purchasing process. However, not all reports are accurate or clear regarding the true history of the vehicle.
With blockchain technology data is immutable, meaning that once the data has been added to the chain it cannot be removed or changed. This feature, along with the ability to provide extremely detailed information, make blockchain-linked vehicle history reports accurate and reliable. According to the study, 7 percent of respondents said that they are willing to pay up to $6 for this valuable tool.
While these number may seem small seem small, considering the sheer number of vehicle owners just in the US, it adds up to significant revenue gains in the long run. The technology is proven to be robust and reliable, and more and more consumers are catching on to the potential it holds. Businesses in the automotive industry need to pay attention to blockchain technology. Those who embrace it are in for a potentially very lucrative future.
Time-saving (such as traffic congestion management)
Convenience (such as remote access)
Data immutability (for used vehicle purchases/sales)