The automotive industry is going through big changes driven by sustainability and digitalization. ESG standards will shape its future, and data is now the key resource. We are entering the era of electric and connected cars.
Automotive leaders have a chance to reshape their organisations, preparing for the “mobility of the future”. They can define it. Traditional companies and tier-one suppliers face new competition from tech-focused players. If they want to stay ahead in the competition, then they must adapt, build expertise, form partnerships, and invest in R&D.
So, let’s see some of the latest trends of traceability in automotive industry that will shape it in the upcoming years.
10 Trends Changing Traceability in Automotive Industry
Traceability system in the automotive sector focuses on each part and component’s movement right from its manufacturing to its sale & occupation by the consumer. It enhances quality control, assists businesses in adhering to legal obligations, and ensures safety by exposing risks swiftly.
Due to increasing globalisation and a rush for transparency and understanding of the supply chain, traceability in automotive industry is essential for effective control and management of trust as well as risks for improved effectiveness. So, here are the trends:
Ever-Changing Consumer Base
Consumer choice and flexibility will drive new automotive business models. Mobility-as-a-Service (MaaS) and vehicle subscription models are expected to expand in the coming years.
Key trends shaping the future include:
- Balancing in-person customer needs with virtual showrooms.
- Remote work and changing consumer views on vehicle ownership.
- Rising demand for flexible vehicle financing and personalized journeys.
- Use of technologies like Extended Reality (XR) for online showrooms and test drives.
- Shift from ownership to users due to Product-as-a-Service, with a focus on high-end experiences over status symbols.
- Personalized vehicle financing and flexible MaaS products for modern consumers.
Next, let’s explore the next growing trend in traceability in automotive industry.
Sustainability Rules
The automotive industry is facing increasingly tough sustainability regulations. Governments play a significant role in promoting sustainable business practices and encouraging behaviour shaping through time-bound goals.
- Independent regulators are raising standards for vehicle manufacturers, focusing on greenhouse gas (GHG) emissions and fuel economy. These stricter sustainability regulations will drive research and development in green automotive innovation.
- Expect growth in ESG (Environmental, Social, and Governance) investing. Trends of traceability in the automotive industry like alternative energy storage, smart grids, and carbon capture will play a key role in shaping future ESG policies.
- Automotive industry trends like Blockchain-Track-and-Trace shine a light on the need for automotive companies to ensure transparency of their value chains.
Policymakers and consumers would like to see solid proof and evidence of the “sustainability steps” that the companies are taking.
To make this easier, automakers have also created a supply chain transparency platform called Cofinity-X. It provides products and services to its partner companies to improve transparency and traceability.
Another trend of traceability in automotive industry is the embedded connectivity. Let’s see what it does.
Embedded Connectivity
Connected vehicles are expected to account for 95% of all new vehicle sales by 2030, up from 50% today. This is one of the major trends in the automotive industry. Here connectivity generates vast amounts of data, pushing automotive manufacturers toward data-driven business models.
As data opens new revenue streams and provides insights into customer behaviour, both established ICT companies and startups are entering the automotive space. Traditional players must adapt by focusing on customer-centricity and optimizing products through data science.
- Vehicle sensors gather real-time data on usage, performance, EV charging habits, and traffic.
- Technologies like Edge Computing and Predictive Maintenance turn this data into actionable insights.
- These insights enhance the driving experience, reduce congestion, and improve road safety.
The trend of Diversified Value reflects how tech companies are entering automotive markets, using data to deliver personalized experiences. However, Data Ethics reminds us that, despite these innovations, consumers remain cautious about how their data is used and protected.
Find out more trends of traceability in automotive industry.
Supply Chain Resilience and Risk Management
A supply chain must have the ability to adapt to disruptions, maintain operations, and quickly recover, ensuring the continuous flow of goods and services. This minimises downtime, mitigating potential losses.
Risk management in supply chains involves identifying, assessing, and addressing potential risks. These are disruptions, supplier failures, or economic changes. Interventions ensure smooth operations preventing negative impacts on production, delivery, and overall business performance.
The pandemic has exposed significant weaknesses in the global supply chain. Those could have affected the automotive industry. To tackle any further complications, here are some solutions that the industry has adopted:
- Diversifying Suppliers: Companies in the automotive industry are diversifying their suppliers to reduce risks from geopolitical tensions and trade disruptions. They are sourcing from multiple regions and setting up backup suppliers to maintain continuity.
- Regionalisation: This is a growing trend. Companies are moving production and sourcing closer to home to rely less on distant suppliers. The purpose is to reduce risks, shorten lead times and also lowering transportation costs.
- Digitalization and Industry 4.0: The dynamics have changed due to advanced technologies, including the Internet of Things, artificial intelligence, and blockchain.
Real-Time Tracking and Predictive Maintenance
Implementation of the IoT and RFID-based technology allows pushing down the tracking to the parts and materials in the stock. It enhances the management of inventory levels and minimizes idle time. Production interruption is alleviated since equipment breakdown is anticipated and avoided due to AI-based predictive maintenance.
Digital Twins and Smart Factories
Digital twins are generally defined as the virtual representations of physical objects to improve the production process. Further, activities performed in smart factories comprising a network of systems are focused on leveraging efficiency and quickly responding to either supply or demand volatility.
Let’s look at this next trend for traceability in automotive industry.
Sustainability and Green Supply Chain
Environmental concerns are pushing the automotive industry towards greener practices. Automakers are optimizing logistics and using renewable energy. They aim to reduce emissions during production and ensure suppliers meet environmental standards.
Circular Economy
The goal is to reduce waste. The focus is on recycling materials from end-of-life vehicles. Automakers are using recycled components in new vehicles to reduce waste and conserve resources.
Semiconductor Supply and Management
The global semiconductor shortage has significantly affected the automotive industry. So, investing in semiconductors in supply chain management is crucial. Automakers and governments are investing in expanding semiconductor manufacturing, which includes building new plants and partnering with chip producers.
Long-Term Contracts and Stockpiling
Companies are securing long-term contracts with suppliers and stockpiling critical chips. This helps stabilize production and better meet consumer demand.
When your company acknowledges these technology trends in the automotive industry and moves towards adopting them, you can stay ahead of your competitors by miles.
FAQs: 10 Trends Shaping the Future of Traceability in Automotive Industry
What is blockchain traceability?
Blockchain provides a secure, transparent ledger that records every transaction, ensuring that each component’s origin and journey are accurately documented and easily verifiable.
What are the stages of traceability?
Traceability has three stages: supplier mapping, product traceability, and material traceability. Each plays a significant role in ensuring your business operates efficiently.
How can data analytics impact traceability?
With data analytics, you can identify patterns and anomalies, improve forecasting, and enhance decision-making with actionable insights into the supply chain and operational efficiencies.
Conclusion
The advancement of technology is inspiring the advancement of the automotive industry. Trends like digitalisation, sustainability, and supply chain management help the industry to keep evolving.
Adopting these modifications, particularly new technologies and environmentally friendly, is necessary for competitiveness and future requirements. Qodenext will help you to deal with the existing and anticipated trends of traceability in automotive industry, aspire to meet and even expand customer’s needs, and move your business forward.
