Digital Disruption
Research: AI and tariffs reshape digital transformation
A new AMS survey, conducted in partnership with Kyndryl and Microsoft, finds automotive manufacturers navigating a sharper, more turbulent digitalisation landscape than ever before. The findings demand attention.
The road to digital maturity has never been straightforward in automotive manufacturing. But something has shifted. Where previous surveys might have captured an industry edging cautiously forward, the Automotive Manufacturing AI and Digital Operating Models Survey 2026, conducted by AMS in partnership with Kyndryl and Microsoft, finds an industry under pressure to move faster, smarter and with considerably less room for error than before. The backdrop matters enormously.
When AMS and Kyndryl published the first collaborative survey whitepaper in 2025, the conversation centred on an inflection point: a recognition that digitalisation had reached a critical juncture, that AI remained underutilised, and that fragmentation across the value chain was holding the industry back. That diagnosis has not been disproved. If anything, the environment has grown more demanding.
Companies that frame transformation purely around cost-cutting risk missing the broader opportunity that digital tools and AI genuinely offer, including innovation, agility and the capacity to respond to market shifts far more fluidly than legacy operations allow
The macro storm accelerating digital investment
Tariffs, geopolitical instability, rising input costs and supply chain volatility are no longer peripheral concerns for automotive manufacturers. They have moved to the very centre of strategic planning. For many companies, the uncertainty surrounding trade barriers is particularly corrosive: it is difficult to commit to long-term transformation programmes when the rules of global commerce feel subject to change at short notice.
And yet, paradoxically, it is precisely that volatility which is now pushing digitalisation up the agenda. The case for operational resilience and cost efficiency has never been more persuasive.
What the new, soon-to-be-published survey makes plain is that digital transformation is no longer simply a technology project, but has become a strategic response to an external environment that offers little shelter.
Why competitive advantage is now the primary goal
Efficiency and cost reduction have long been the dominant justifications for digital investment in manufacturing. They remain powerful. But the 2026 survey reflects something more pointed: a growing recognition that digitalisation, deployed well, can be a source of competitive differentiation rather than merely a mechanism for cost management. The distinction matters. Companies that frame transformation purely around cost-cutting risk missing the broader opportunity that digital tools and AI genuinely offer, including innovation, agility and the capacity to respond to market shifts far more fluidly than legacy operations allow.
An industry that invests in digitalisation only to trim headcount or squeeze margins will find itself outpaced by rivals who have used the same tools to build new capabilities. The survey data offers a timely warning on exactly this point.
Perhaps the most striking thread running through the new survey is the role of people...the evidence consistently suggests that human factors are among the most decisive variables of all
Skills, data and the human side of the equation
Perhaps the most striking thread running through the new survey is the role of people. Digital transformation is routinely discussed in terms of technology: systems, platforms, architectures and integration. Yet the evidence consistently suggests that human factors are among the most decisive variables of all, both as enablers when the conditions are right, and as constraints when they are not.
The competition for digital and AI skills has intensified sharply. Attracting and retaining the right talent is genuinely difficult, and the skills gap in several areas is widening rather than closing. At the same time, the survey highlights a strong data foundation as a critical prerequisite for successful transformation.
Without clean, well-governed data, the most sophisticated AI tools are of limited value. The sequencing of investment matters.
Legacy systems and the AI integration challenge
The challenge of integrating AI with existing automation infrastructure and legacy IT systems is not new. It has featured prominently in industry discussions for years. But its persistence is telling. Progress in replacing or modernising legacy systems has been slow, and that slowness has compounding consequences as AI adoption accelerates. Cybersecurity, too, surfaces as a significant and related concern. As manufacturers integrate new and relatively unfamiliar technologies into their operational environments, the attack surface expands and the stakes of any vulnerability rise.
These are not insurmountable problems, but they do require clear-eyed prioritisation and, crucially, realistic timelines.
What the upcoming findings will reveal
The imminent Automotive Manufacturing AI and Digital Operating Models Survey 2026 draws on the expertise of AMS's specialist audience of OEMs and Tier 1 suppliers. It offers a detailed and honest account of where the industry stands: not the polished version, but the working reality of manufacturers navigating multiple concurrent pressures with imperfect tools and finite resources.
The full whitepaper will soon to be available as a free download. For those with a professional stake in the future of automotive manufacturing, it is essential reading.
