RFID in automotive industry

RFID or Radio Frequency Identification is revolutionising all kinds of manufacturing industries. It is drastically improving the way suppliers and managers track and manage assets from an individual part in the warehouse to a finished vehicle in the production line. Industry 4.0 demand has introduced RFID in automotive industry. This has made complex manufacturing processes much easier. Other than the production process, RFID tracks vehicles as they move through the assembly lines. This allows greater control over the manufacturing process 

You might already know that the automotive industry has a wide range of business models. The needs of a manufacturer are very different from that of dealerships. So, in this blog, we will try to understand the needs of using advanced RFID technology in automotive sector. 

Role of  RFID in Automotive Industry

Implementing RFID asset tracking systems can help automotive manufacturers and suppliers make serious decisions and gain valuable insights into all areas. This leads to increased operational efficiency and cost savings.

Some of the biggest benefits of this include:

With all these benefits or advantages, there are a few changes that RFID in automotive industry has brought about. So, let’s have a look at the latest trends of RFID application in automotive industry.

9 Automotive Asset Tracking with RFID Trends 

The business case of RFID is clear cut. But how are the automotive supply chain solutions being deployed in real life? How are manufacturers integrating the assets with the automotive supply chain and RFID technology?

Let’s jump into the biggest trends that are making it happen.

1. Tracking Individual Parts 

As cars continue to become more complex, with more parts, traditional methods of tracking those parts are not going to work anymore. With the latest RFID in the automotive industry, suppliers can affix or embed a tag to individual parts like batteries, airbags, antipollution systems, tyres and more.

They use RFID readers to capture data throughout the part’s lifespan. They can use this data to better understand and optimise the internal business process around asset tracking. It can also support customer safety by proving superior traceability for faulty parts. 

2. RTIs and Container Tracking 

Returnable Transport Items (RTIs) encompass a wide range of bulk carrying products, including pallets, roll cages, returnable plastic containers, tote boxes, ingredient bins, dollies,  IBCs, gas cylinders and kegs. 

Though RTIs play a crucial role in modern shipping and consumer goods industries, they have their own supply chain challenges. 

RFID in automotive industry can provide economic visibility into the location of the RTIs and the assets they are transporting. By leveraging RFID, automotive manufacturers and suppliers can more effectively manage, trace and  track and audit their RTIs. This improves operational efficiency resulting in better supply chain management.  

3. Transport Units with Smart Labels 

RFID is efficient in transporting units between supplier dispatch and customer reception by using smart labels (paper labels that have RFID inlay). Using a handheld RFID reader, suppliers will be able to conduct a quick final check after a truck is loaded to confirm a given transport unit and the customers can do the same upon reception.

4. Plant Work Orders

RFID streamlines tracking internal orders and any work in process within an automotive manufacturing plant. The tag readings are interfaced with manufacturing execution and enterprise resource planning (MES/ERP) systems to provide automatic updates of production quantities and internal flows. Tacking all work orders is crucial because:

5. Material Handling Equipment 

Both motorised and non-motorized material handling equipment play a vital role in providing workers with activity data and information about the assets they handle. 

Utilising technologies like RFID in automotive industry and real-time location systems (RTLS), these systems enable tracking of equipment across various platforms and throughout a plant.

The collected data can be thoroughly analysed to extract insights into equipment utilisation patterns, pinpoint bottlenecks or inefficiencies in material handling processes, and enable informed decision-making for process optimization and resource allocation. This data-centric approach significantly enhances productivity, minimises waste, and boosts overall operational performance.

6. Finished Vehicles

With advanced RFID technology in automotive sector in India, companies can track finished vehicles. They can keep track of these vehicles as they go to their destination. 

They can use this information to associate important data with each vehicle, such as manufacturing details, inspection records and maintenance history. This facilitates quality control measures and enables suppliers to instantly identify and address any quality issues or defects.

Note: There are some countries that abide by privacy policy that may require the removal of RFID tags before they deliver the car.

7. Fleet Vehicle Tracking

Fleet management systems also use the RFID in automotive industry. This technology is helping managers to better monitor the location, movement and status of vehicles. They get valuable insights for optimising the routes, scheduling maintenance and managing fuel consumption. 

There are also some security benefits as RFID enables quick identification and authentication of authorised vehicles, reducing the risk of theft or unauthorised access. 

8. Automating Fuel Access

RFID in automotive industry is transforming fuel management systems (FMS) by optimising operations for both commercial fleets and retail fueling stations. Through integration with third-party databases, vehicle pump interfaces, and transaction records, RFID technology empowers fleet managers with enhanced control over fuel expenses and billing processes. 

This integration aids in streamlining operations and reducing costs, benefiting a wide range of fleets, including those in supply chain and logistics, airport maintenance, mining, construction, government, highway maintenance, and refuse vehicle sectors. 

9. Returnable Containers

RFID plays a crucial role in automotive manufacturing supply chain to control returnable containers. Some containers are stored in returnable containers like bins, pallets and other transport items. In this context, RFID advantages include real-time visibility, automated tracking and identification, streamlined supply chain procedures, improved traceability, and effective inventory management. 

This makes it possible to plan more effectively, cut down on delays, and boost overall productivity in the whole automotive supply chain process.

Dealership: Millions of cars and light trucks are sold annually in India. RFID technology has become widespread, facilitating efficient tracking of inventory movements and post-sale service in dealerships. 

Tracking Inventory: With RFID, dealers stay informed about available automobiles, stock levels, and inventory value in real-time. Automation through RFID gates streamlines processes, automatically collecting data for each step. It aids in error detection during repacking by comparing RFID tag data with order information. 

Automation: Additionally, RFID enhances vehicle location, test drive monitoring, and personalised customer service, speeding up check-in and providing accurate information to service representatives.

RFID in automotive industry also helps to locate the vehicles, monitor test drivers and provide services based on the customer’s past experience. 

FAQs: Understanding the Role of RFID in Automotive Industry

What is the latest RFID technology?

Active tags are the latest addition to this sector. It is battery-powered. It uses wireless technology to streamline supply chain and warehouse practices. 

What is the role of RFID in automotive industry in inventory management?

RFID in automotive inventory management enables real-time tracking of vehicle parts and finished products, streamlining processes, minimising errors, and optimising supply chain efficiency for improved inventory control.

How does RFID enhance post-sale services and customer experiences in the automotive sector?

RFID facilitates personalised services by accessing customer service histories, expediting check-ins, and providing accurate information. It ensures efficient vehicle location, monitoring, and prompt service, enhancing overall customer satisfaction and experience.

Who invented RFID technology?

Charles Walton is known as the “Father of RFID technology”. He was the first patent holder for this technology.


It is crucial to stay competitive in today’s manufacturing industry. One way to do so is by implementing RFID in automotive industry. This technology reduces inventory management, expenses, helps to avoid manufacturing delays and solves the biggest production problems for automakers and other parties in the supply chain. Go to Qodenext  for more such supply chain solutions. 

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