Despite all the recent hype and excitement surrounding the introduction of radio frequency identification (RFID) technology in retail markets, the automotive industry will spend nearly thirty times more on the technology this year. Representing about half of the total RFID market, the auto industry is poised to spend about $600 M on the technology, according to a recent study prepared for the technology market research firm ABI. Key applications of RFID technology in vehicles include immobilizers, automatic vehicle identification, tire tracking and passive entry systems.

“While the technology has made its way into millions of production vehicles each year, growth potential also exists in the automotive supply chain,” states Edward Rerisi, ABI’s director of research. He points to full-scale deployments where suppliers identify their components with an RFID tag prior to shipment to the automotive assembly line. From this point, the OEM can track not only the shipment but also the inventory status of the component after it has been received. “It is a one-tag-fits-all solution, enabling the OEM to track shipments and work-in-process,” continues Rerisi. “The same benefits that this technology can bring to the retail supply chain are being realized – and proven – in the automotive supply chain.”

ABI’s most recent study on the RFID market, “RFID: Emerging Applications Driving R&D Investments and End-user Demand,” reveals that the automotive applications represent 46 percent of the total market today. While this share declines to 28 percent of the total market by 2008, the automotive segment still shows positive growth in the market, as other segments begin to represent more significant portions of the market.