SAIC-GM-Wuling, the Chinese joint venture between General Motors, SAIC Motor Corp, and Guangxi Automobile Group, will implement new blockchain technology to help reduce costs, improve efficiency, and reduce potential errors.
Per a recent report from Bloomberg, China’s central government announced just prior to the Lunar New Year that 15 pilot areas had been selected for the application of new blockchain technology, including a range of industries and companies, such as banking, utilities, hospitals, and local government agencies. However, in addition to those sectors, just a single automotive entity was selected for the trial, namely SAIC-GM-Wuling.
For those who may not know, blockchain technology is an example what is known as a distributed ledger system, wherein transactions are digitally recorded in multiple locations at once. As compared to traditional databases, which store data in a single location, distributed ledger systems store data in a variety of locations, thus ensuring the veracity of the data based on consensus. The best-known example of this technology are cryptocurrencies, such as Bitcoin.
Several other global automakers are now moving to implement new blockchain technology into the production process as well, including Mercedes-Benz, BMW, and Toyota, to name just a few.
Per the Bloomberg report, SAIC-GM-Wuling sources nearly 1,000 different components daily from a huge range of suppliers, with transactions that could number in the millions. As such, the potential for human error through paper-based documentation is high, something which blockchain technology could work to reduce.
The new blockchain tech is expected to reduce paperwork by as much as 10 million sheets per year, reducing costs by $2.5 million annually. Although at first glance this may not seem like a sizable sum for a company as big as SAIC-GM-Wuling, it will certainly help as the company strives to offer low-cost products like the MINI EV, which is priced at the equivalent of less than $5,000 in China. As GM Authority covered previously, SAIC-GM-Wuling sold nearly 400,000 units of the MINI EV last year, making it the best-selling electric vehicle in the Chinese market.