The presentation is a part of my ongoing research on emerging technologies like IoT, Blockchain, RPA and AI and its potential application across different industries. This particular presentation showcases how Digital Identity of Devices maintained in a Blockchain network can transform the Automotive Aftermarket Industry and address global challenges like counterfeiting and increase customer retention and revenue for OEMs (automobile manufacturers).

1. Digital Identity of Devices
A CASE STUDY ON THE IMPACT THAT DIGITAL IDENTITY OF AUTO PARTS CAN BRING
TO THE AUTOMOTIVE AFTERMARKET FOR OEM/OES PROVIDERS

2. What is the Automotive Aftermarket?
The automotive aftermarket is the secondary
market of the automotive industry, concerned with the
manufacturing, remanufacturing, distribution, retailing,
and installation of all vehicle parts, chemicals,
equipment, and accessories, after the sale of the
automobile by the original equipment
manufacturer (OEM) to the consumer. The parts,
accessories, etc. for sale may or may not be
manufactured by the OEM.

3. Global Auto Aftermarket Size
 Global vehicles in operation are expected to increase sharply
over the 2016-2022 period driving the market of aftermarket
products.
 The Global Automotive Aftermarket was USD 643.10 billion in
2016 and is estimated to reach USD 847.15 Billion by 2022, at a
CAGR of 4.7% for the forecasted period
 Global Passenger Car Accessories Market to Mark a Revenue of
USD 394.5 Billion by 2023
Source: ResearchandMarkets.com

4. Why Automobile Aftermarket is a lucrative market?
Source: The NPD Group Consumer Outlook Survey, USA
As a car grows old the maintenance cost increases and this increasing demand is a lucrative
market opportunity which OEM/OES manufacturers are facing challenges to capitalize.

5. Inadequate Coverage Pattern for OEM/OES

6. Key Challenges faced by OEM/OES in the
Automotive Aftermarket
 OEMs and OESs face significant price competition from copy manufacturers
 OEMs’ parts revenue is expected to decline in the next three years, indicating that margins could come under increased
pressure.
 On the demand side of standard high-volume parts, specialty chains and fast fitters such as KwikFit, PitStop and A.T.U. will
benefit and have more power to negotiate prices
 Independent vendors, supplying, for example, Bosch Repair Centres, may also increasingly replace OEMs in the aftermarket.
These shifts may result in lower prices for standard and high-volume parts by 10% to 15% in the next five years. This means that
most market players except for copy manufacturers and specialty chains will face a reduction in overall turnover.
 Presence of local manufacturers and lack of standards and regulations is leading the players to manufacture low-quality
passenger car accessories. This increasing number of low quality offerings of passenger car accessories is hampering the growth
of industry and decreasing the revenue share of the organized players.
 And of course the threat of counterfeit spare parts delivered in the grey market and unbranded repair shops and service
centres.
Source: CapGemini Consulting

7. Customer Expectations Vary Widely from
Region to Region
The main differentiating factors vary from region to region but broadly they are parts availability, proximity and
originality along with price, specific requirements and innovative service.
 In Western Europe, the main factors for differentiating the service offerings are innovative services, the high emphasis
on specific customer requirements and customization of services. In line with the importance of customization,
proximity to customers and offering services for attractive prices play an important role as well
 Russia is particularly demanding when it comes to branding of services. Prices are not considered to be a differentiator
for service offerings as price sensitivity for services seems to be relatively low. More important is that reasonable prices are
in line with sophisticated service quality and close proximity to customers.
 In China, the price of services is the most important factor to achieve market differentiation. However, besides attractive
prices customers request quick response and reaction times and sufficient service quality.
 India seems to be the least ambitious market in terms of differentiation. Neither service innovation, service quality,
branding nor service levels seem to offer significant differentiation opportunities. The most important ways to achieve
differentiation are service price and availability of parts. Furthermore, there seem to be specific service requirements
that are most relevant to Indian consumers. Emphasizing these specific requirements is a potential way to achieve
differentiation.
Source: CapGemini Consulting

8. Customer Expectations by Region
Source: CapGemini Consulting

9. Mismatch Between Demand for Spare Parts and Customers
Visiting OEM/OES for Replacement
1. In India, according to ACMA while nearly 20% of the cars on road are more than 15 years old, the typical age profile of cars
reporting at dealerships is of less than seven years. This means that the older the car, the less likely the car visits the OEM
service centre. Once the car changes hands, this is even less likely. But the irony is that the older the car grows, more is the need
for service and parts.
2. The above point indicates that car owners are driven away from the authorized centres and are looking for replacement
elsewhere.
3. A new segment of fleet operators and taxis that tend to be demanding in a) price b) reliability c) quality and d) safety is evolving
into a relevant segment. In recent years this segment has grown substantially to over 500,000 cars on the road. The larger
among them even have their own service centers. In addition to price competitiveness, reliability in availability of the required
part at the right time at the required place is of crucial interest to them! If there are long periods of waiting to source parts from
the OEMs and their distributors, they will look for alternatives.
4. One of the prime reasons for significant counterfeit sales in spare parts is because of poor availability of parts. No other
consumer product category has seen counterfeiting to this extent in the Indian market. ACMA assesses that 36% of the
components in the aftermarket are fake. It is also thought to be growing 9-11% annually. Since counterfeiting is usually of the
OEM’s intellectual property, in addition to eating into the aftersales of the car manufacturer, it may also spoil the car and
endanger the life of the owner.
5. Many car manufacturers do not have complete reach either through their service centers or through their distributors to cater
to a fast expanding aftermarket.
6. Even the suppliers of the OEMs who have the freedom to supply to this market very rarely have the capability to do an effective
distribution. Since this means that parts of many of the car brands are not freely available in the market, the situation creates
an unmet need in the market opening up an oft unacknowledged channel – leak of parts from dealerships and service centers
into the open market

10. Summary of Challenges to OEM/OES
1. Customers moving away from OEM/OES as cars grow old
2. Customer expectations vary widely from region to region
3. Lack of effective distribution leading to availability shortage
4. Readily available counterfeit products
5. Long waiting period for spare parts

11. THE SOLUTION
HOW DEVICE IDENTITY & CONNECTIVITY CAN
DRIVE COMPETITIVE ADVANTAGE & INCREASE
OUTREACH

12. Storing Device Identity on the Blockchain
The device identity of each OEM spare part is stored in a distributed Blockchain ledger. The ledger contains an
immutable record of each device including its location, ownership, change of ownership records which is recorded
from its “birth” thus providing a complete bio-data of the device.
1. Manufactured on: xx-xx-xxxx
2. Serial No. / Part No.
3. Factory: ABC, Munich
4. Shipped to Dealer: xx-xx-xxxx
5. Dealer Name: XYZ
6. Dealer Location: 24 Woffe St., Berlin
7. Sold to Customer: Mr. Henrich Schultz
8. Car Make/Model: Volkswagen Deluxe
9. Car Reg No: XYZ 3344
10. …..
11. …..

13. Automatic Sensing with Autonomous Decision
Making Capability
In-car computer systems records a variety of data which
collects a variety of information from device sensors and
also has the capability to track maintenance and
replacement alerts based on driving behaviour, location,
miles driven, fault codes, etc.
Whenever a maintenance or replacement alert is triggered
the in-car computer system can connect to the Blockchain
and present to the user options like:
1. The nearest service centres or shop where the OEM
spare part is available (with road directions)
2. The estimated price for the service or replacement.
3. Present the option for the customer to authorize an
immediate purchase or book a service request.
4. The service centre or shop could be intimated in
advance thus reducing the wait time of the customer
5. Upsell product/services with option to make a
purchase decision immediately
Nearest dealer search Parts Availability
Part/Service Cost Data Sharing
Directions
Upsell Opportunity
Purchase Decision Demand Pattern

14. Understanding of Demand Pattern – Localization & Availability
Which auto parts needs to be
stocked?
How to identify parts that have
specific seasonal demand
Which regions have specific
demands for particular parts?
The historical data gathered from the demand generated from the on-board car computer and requests made to the
Blockchain network can be analysed to uncover some important findings:
1. A pattern of demand for specific spare parts based on region (mountainous terrain could result in higher demand
for brake show replacement)
2. Impact on Temperature/Climate variations (varying with season) on spare part demand
3. How does driving behaviour correlate with spare part and service request demand?
4. How to optimize Dealer coverage area in order to minimize dealer losses and at the same time provide adequate
reach to customers?
Based on such findings the OEM can take decisions on spare part production and logistics based on geographic
location, seasonal variations and individual driving patterns

15. HOW DEVICE IDENTITY WILL DRIVE SALES OF AUTO-
PARTS AND INCREASE CUSTOMER RETENTION
1. Self Identification of replacement needs (Car Data) is announced or communicated to the
customer directly through in-car computer systems communicating with device sensors
2. The faulty or replaceable device identity is tracked and an automatic localized search for
authorized dealer and OES network based on the identified device is made, enabling
repair/replacement to be done quickly and locally
3. Customers do not need to look anywhere as problem identification and replacement
decision takes place within the car itself thus increasing overall customer retention.
4. Only authentic spare parts and authorized dealer and OES network based on customer
location is matched by the system based on the device identity thus reducing the chance
for a customer to search in the open market which decreases overall competition.

16. HOW DEVICE IDENTITY WILL DRIVE SALES OF AUTO-
PARTS AND INCREASE CUSTOMER RETENTION
5. Mapping of the customer profile with driving behaviour could help generate potential for
upsell of product and services
6. Maintenance schedules and replacement alerts can be communicated to the service centre
beforehand thus leading to efficient service delivery and ensuring spare part availability.
(The service centre essentially knows who is coming and what problems to expect from the
car)
7. The OEM can build a clear demand forecast picture overtime based on localized, and
seasonal needs and thus can plan his spare parts production schedule with logistics and
distribution plan .
8. Gradually the OEM can move towards building small, smart and localized factories taking
care of local demands and de-centralizing the entire process.

17. THE VALUE IMPACT
New Car Service/Repair
Direct OEM/OES Sales Dealer/Distributor Open Market Others
Old Car Service/Repair
Direct OEM/OES Sales Dealer/Distributor Open Market Others
INCREASED CUSTOMER RETENTION, HIGHER OEM SPARE PARTS REVENUE, REDUCED COUNTERFEITING

18. THE FUTURE
A world where the customer and the car are interlinked,
each understanding and fulfilling their needs via a fast,
seamless and secure connectivity network.
Cars, manufacturers, dealers, devices and customers are all
connected with super-efficient, customized and localized
service.

19. Source: McKinsey Research
A recent survey in the aftermarket industry predicts that the highest impact on aftermarket
sales and profitability will result from digitization and inter-connectivity of services with car
generated data

20. Example Scenario:
Michael needs to replace his oil filter for his Mercedez E-Class diesel sedan and he does not have time to
search for dealers or look online and he does not want to spend too much money as he has decided to
sell it off in the next 6 months. His car sensor alerts him with a message :
“Yes, certainly … but when do you need it?”
“I am afraid its rather urgent. What is your budget range?” - Range 1 | Range 2 | Range 3 ….
“Range 1 plz”
“Hi Michael, I am in need of an urgent oil filter replacement. Do you want me to find you a replacement?”
“Found a perfect match, just 10 mins drive from here. Do you want me to purchase it for you?
“Sure … go ahead”
“Great!! … its purchased. What next … do you want me to drive you there??? 

21. Michael and his advanced, artificially intelligent, self-aware, self piloting super car is not a
TV series anymore … We have the technology and tools to build this and at the core of this
is Digital Identity and Security.”
Device Identity
AI Chat Bot
(Robotic Process Automation)
Distributed Blockchain
IoT Sensor
Dealer/Service
Center Location
Vehicle Control Unit
Google Directions Autonomous Car
Smart Contracts Self Maintenance

22. THE CENTRAL THING IN THIS CHAIN IS THE
DIGITAL IDENTITY AND THE ABILITY FOR OTHER
SYSTEMS TO LOCATE A DEVICE PRECISELY.

23. The Revolution that Digital Identity can
bring?
 Imagine every spare part having a digital identity which clearly states when it was
built, who built it, what are its specifications, new or used, how many times it was
brought and sold, the pricing history, compatibility with car make and model,
direct reviews of customers who have used the product … a complete up-to-date
CV of the item.
 Buyers can immediately make a choice and automated tools can quickly and easily
find a product that suits the buyers needs.
 The OEMs can get a better price by creating a price differentiator based on quality,
compatibility and usage and track demands based on geographic areas.

24. The Gainers
Customers OEM Manufacturers Dealers Service Centres
Genuine & Verified
Products that match with
car configuration
Increase conversion and
upsell by in-vehicle alerts
Increase customer reach
by offering different
prices with new and used
products
Get alerts on new
customer demands
Accurate and Different
Pricing Options
Better visibility of demand Increase reach with
localized customers
looking for the best price
Better prepared for quick
replacement and service
Save Time & Money by
locating best product
from the nearest dealer
Greater control of Dealers
and Distribution Channels
Faster payment
processing and collection
Know your customer
before they arrive
Automatic Payments
through smart contracts
Reduce revenue leakages
with customers opting for
non-OEM products
Opportunity to upsell
Auto Reminder for
replacements

25. Thank You
Arindam Sen
Director,
Acumen Consultancy Services
18+ years experience as an Information Technology Consultant
Mobile: +91 98316 00922
E-mail: arindam.sen@acumensofttech.com