Blockchain Is Disrupting the Auto Industry

Buying a car in America has long been a difficult process rife with bureaucracy and mistrust. But in many ways, digital technology is helping to make the process more pain-free, as witness the industry’s efforts to modernize and look to blockchain for help.”.

With the auto industry entering a new era, manufacturers begin to understand that staying relevant means investing in research and development, especially if they want to stay competitive in a world where a growing number of consumers only want to purchase vehicles fitted with groundbreaking onboard technology and the latest safety features.

But innovating isn’t easy, as regulators’ slow response often slows the manufacturing process. In addition, the industry continues to suffer because of the need to sell fast and cheap, a model that shrinks its gains.

Understanding that costly regulations and middlemen involved in the car-buying process make the business a low-profit-margin enterprise, autoXchange entered the market with one goal: to offer consumers an open network that promises to simplify the process through blockchain technology.

By offering a decentralized marketplace for both private sellers and buyers, autoXchange removes the expensive costs tied to listing, keeping inventory, meeting regulations, and offering financing from the equation. Thanks to blockchain, the car-buying process can be more efficient, boosting profits while actually lowering the costs to the consumer.

Technology: Making Cars More Affordable

As Forbes points out, autoXchange is disrupting the auto industry precisely because it makes the operation less costly. According to the firm’s founder and CEO, Richard Brown, that’s the beauty of the platform and the reason why the entire industry should be taking advantage of it.

“At autoXchange we believe in building an open blockchain framework which can be used as a shared industry resource where the data and tools are made accessible to any third party without cost,” he said.

Prior to this model, the regulatory burden helped to turn the industry into an oligopoly, making it difficult for entrepreneurs to enter the market and compete with large, more established firms. In the early 20th century, when the auto industry was less regulated, there were dozens of automakers in operation. Now, with large mergers and buyouts, there are only three major automakers left in the United States, with Tesla, the electric-car maker, being one of the few others able to have some presence in the market.

The problem is that, over time, the cost of doing business became so burdensome that many of these major automakers had to turn to the federal government for a bailout. But as blockchain enters the picture, removing the need for middlemen and allowing buyers and sellers to interact directly, this cost is greatly diminished.

In addition, sellers using autoXchange don’t have to seek the services of third parties such as banks and lawyers to secure contracts and check the buyers’ financial situation. Instead, they may rely on the platform’s smart contracts, which are “inserted directly onto an open blockchain ledger,” the firm states on its website.

By offering a decentralized marketplace for both private sellers and buyers, autoXchange removes the expensive costs tied to listing, keeping inventory, meeting regulations, and offering financing from the equation by using blockchain to make the car-buying process more efficient. As a result, autoXchange is making the auto-selling business profitable again.

Responding to Public Pressure, Not Government

Well aware that the auto industry and blockchain have both been seen as male-focused, Brown set out to bring diversity back to the industry. Without facing pressure from the government or other regulatory bodies, Brown implemented policies that avoid male bias and encourage parents to join their team, as autoXchange provides a flexible work environment that is family-friendly. In addition, the firm ensures wages are based on role, making the company less likely to be accused of doing nothing to fight the gender pay gap.

By embracing these policies, Brown is responding to a concern shared by many in the industry. What’s best, nobody had to resort to government regulations to force his hand. If anything, autoXchange proves that a private enterprise will do good if it wants to succeed, and that government oversight is superflous when other incentives are at play.

Who knew that allowing the market to respond to consumers’ demands would help the industry prosper while providing more affordable products at the same time?

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