Why automotive manufacturers are stuck at "Stage One"

Almost half of North American automotive manufacturers admit their digitalisation journey has barely left the starting blocks. That is one of the more uncomfortable findings from a new survey of 316 senior OEM, Tier 1 and technology leaders, carried out by AMS in partnership with Kyndryl and Microsoft.

The findings make for sobering reading for carmakers trying to expand their production effectiveness. Tariffs and trade barriers now rank as the single biggest challenge facing manufacturing operations, cited by a third of respondents, ahead of cost pressures and even digital transformation itself.

Yet the survey's real value lies not in confirming what most executives already suspect about a volatile macro environment, but in exposing where digitalisation strategies are quietly succeeding and where they are failing.

Take AI. More than half of respondents expect significant or very large benefits from generative AI applications such as vehicle design and predictive maintenance. But that optimism sits alongside real caution. Nearly a third of companies say they are still at an early stage with autonomous and AI-enabled systems, and integration with legacy IT remains the single biggest obstacle to deployment, ahead of cybersecurity and even budget approval.

Perhaps the most striking theme running through the report is not technological at all. It is human. Workforce resistance and skills gaps top the list of risks facing technology transformation programmes, and investment in skills and capabilities is identified as the number one enabler of success, well ahead of data infrastructure or executive buy-in. As Dr Marcel Schaefer of Fraunhofer USA puts it in the report, "it's always people, processes, technology, in that order."

The survey also reveals a widening gap between companies with a clear core technology architecture and those still operating on fragmented legacy systems.

Nearly half of respondents cite cost reduction as the primary goal of modernising that architecture, but the companies making the fastest progress are the ones pairing that discipline with a genuine long-term view of competitive advantage rather than short-term savings alone.

For anyone responsible for setting or defending a digitalisation budget this year, the findings offer something rare: an honest, peer-benchmarked picture of where the industry actually stands, not where the vendor pitch decks claim it stands.

Contributors include senior leaders from Aptiv, Bosch Mobility Americas, Stellantis, General Motors, BorgWarner, Gestamp North America and Solidigm, offering a cross-section of perspectives from OEMs, Tier suppliers and technology providers alike.

The full report breaks down responses by company type, size and role, and includes detailed data on which of eight strategic technology areas, from cybersecurity to digital twins, companies are prioritising over the next three years. It also sets out the five biggest risks executives associate with technology investment, and the specific barriers holding back AI adoption on the shop floor.

For manufacturers trying to work out whether their own digitalisation programme is ahead of the curve or falling behind, the data offers a genuine benchmark rather than speculation. The results are in…