Blockchain Traceability for Averting Counterfeit Auto Parts!

May 10, 2022

In today’s world, the automotive industry is among one of the most advanced and innovative industries. The automotive industry has entered the era of digital transformation and is at the forefront of the same. Increased adoption of autonomous cars and the development of digital ecosystems have been a growth driving factor for the automotive blockchain market.

The automotive industry, however, needs to implement a trustworthy technology backbone to accelerate new business models and reduce the complexities of information management and collaboration with different business partners. With the emergence of effective technologies, the demand for effective solutions has also increased.

Almost any automotive part such as tires, batteries, airbags, engine and drivetrain components like oil filters, brake pads, body parts, electrical components like lights, wheels, windscreens, etc. are counterfeited. Counterfeited automotive parts constitute a growing aftersales market. Due to globalization, supply chains have become more vulnerable. Digitalization has also resulted in e-commerce platforms that are used by legitimate sellers alongside corrupt sellers that offer fake products. Buyers have more options and accessibility but also uneven quality. Online listings can show fakes straight next to real products with no way of identifying which one is genuine or fake. Therefore, consumers find it challenging to distinguish between real and fake parts, especially with smart counterfeiters who offer super fakes that look like real products. When buyers cannot point out if a product is genuine or not by looking at it, they are much more likely to purchase a counterfeit. The idea of deliberately buying a fake & low-grade auto part may cost your life. Illegitimate auto parts usually break down or malfunction without a hint. Counterfeit automotive parts have many negative impacts, including accidents and even death.

Blockchain has now become a solution to all the challenges faced by industries worldwide. Blockchain is a distributed ledger technology used solely to share and regulate information for an interconnected future. Simply put, it is a growing list of records, called blocks, that are linked and cryptographically secured. These records or blocks can contain any form of data, like data exchange on currency, asset information, real estate, etc. Blockchain proves to be a highly beneficial technology for the automotive industry as it improves connectivity, data security, integrity, and reliability. Blockchain automotive traceability system is highly effective in enhancing the bottom line while eliminating counterfeits.  Blockchain-enabled track and trace solutions and applications are already gaining the limelight in different domains, especially supply chain management. Blockchain traceability enables you to track and trace information or products. Implementing traceability solutions in the automotive industry can enhance transparency and visibility across the supply chain.

According to a study, around 62% of the automotive executives believe that blockchain proves to be a disruptive technology in the automotive industry, whereas 54% of the auto pioneers plan to implement blockchain in the next few years.

Blockchain in Automotive infographic

Traditional traceability solutions being centralized are open to concerns such as single point failure, counterfeits, data manipulations, etc. By implementing blockchain-enabled traceability solutions, automakers can describe a process around sourcing, shipping, warehousing, and receipt generation of auto parts. This further makes it easy for the customers and suppliers to buy authentic auto parts. A Blockchain-based system associated with IoT sensors and smart devices would facilitate the service center, the car manufacturer and the customer to trace the origin of spare auto parts back via each step in the supply chain to its actual manufacture date and location.

Benefits of Blockchain Traceability

Blockchain-supported smart contracts provide a wide range of benefits to the automotive industry.  The key benefits are as follows-

  • Enhances traceability :

Stakeholders present across the supply chain network can quickly trace an automotive part back to its distributor. This proves to be quite beneficial in warranty claims.

  • Builds trust among stakeholders and product consumers: 

Offers a single source of truth. Allows companies to share the data regarding the track and trace with their customers. This builds trust among the customers and helps them verify product authenticity.

  • Safeguards the supply chain from counterfeits :

The blockchain network has an immutable product custody chain. This makes it difficult for impersonators to send fake spare parts across the supply chain.

  • Improves security:

With the distributed-ledger technology, traceability solutions offer unmatched security that creates product traceability relevant for the transaction that needs an audit trail.

  • Data protection : 

As explained earlier, blockchain-enabled traceability solutions can mask data for other irrelevant parties in a transaction by establishing channels to ensure data security.

  • Increased transparency :

The blockchain-based automotive traceability solution will enable stakeholders to have control over the amount, exact location, and current status of the automotive parts in real-time across the supply chain. This leads to enhanced transparency, and aids suppliers in drafting their production plans.


Blockchain has a drastic potential to transform and improve contract management in the automotive industry using smart contracts. With the implementation of blockchain that supports smart contracts, automotive companies can achieve various advantages in operations. It reduces document workflow expenses, prevents fraud, boosts manufacturing, and secures the digital ecosystem.

MSRvantage’s blockchain-enabled track and trace solutions can change the way automotive works, especially the supply chain. It provides a high level of security through encryption and restricts sharing of data while maintaining complete transparency and visibility of parts and data.

With MSRvantage Track and Trace, we provide the automotive industry with next-gen anti-counterfeit solutions. With our wide range of blockchain-enabled products, solutions, and services like smart contracts, track and trace, asset digitization, and rewards & loyalty programs, we help companies innovate and increase operational efficiency. Automotive industries worldwide can enhance their business values with us supporting them at each and every step of blockchain adoption. Thus, changing the aspects of the industry by accelerating efficiency and providing an innovative platform.

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