The market for radio frequency identification (RFID) systems in the automotive sector totaled US$312m in 2005 and, according Venture Development Corp, will see average annual growth of 20% between 2006 and 2010.

This will bring the total market value to US$765m.

Traditionally the main automotive use has been vehicle immobilisers and security/access control.

However, Venture Development expects the market to increase through use by the industry during vehicle production, such as automated tracking and inventory management. In addition it should allow improved supply chain collaboration (ie reduced warranty cost, shorter response time to open issues).

Users in the automotive industry are described as highly experienced with the benefits and challenges of RFID, and are expected to rapidly integrate new solutions as they become technologically and financially feasible.

Small in number and requiring a diversity of suppliers to support massive inventories of unique parts, vehicle assembly and parts/components firms wield significant clout in driving the entire supply chain to implement new technologies.

Michael Liard, director of VDC's RFID practice, said: "Although many applications are still in early phases, the increase in new RFID applications suggests that the technology is moving beyond traditional application niches of automobile immobilisation and security/access control."