Survey Results: Digitalisation & AI Drive Competitive Advantage in Automotive Manufacturing

The vast majority of automotive manufacturers embarked on digital transformation programmes many years ago. However, for many, the final destination can often appear elusive and never quite complete as new technologies and requirements emerge and external factors evolve.

Clearly, the priorities for digital transformation are shifting. A complex and unforgiving external environment, characterised by regional wars, trade disputes, rising input costs and supply chain disruption, means that digital transformation is taking on new urgency.

For now, though, companies are weathering multiple storms. Digital transformation remains challenging; not least as competition for the necessary skills and capabilities intensifies, leading to skills shortages in many areas. In fact, human factors can be both key enablers as well as barriers to a successful digitalisation journey.

To better understand the current state of digitalisation across automotive manufacturing, Automotive Manufacturing Solutions, in partnership with Kyndryl and Microsoft, recently collaborated on the Automotive Manufacturing AI & Digital Operating Models Survey 2026 to tap into our industry expert audience of automotive OEMs and Tier 1 suppliers. 

The survey findings have been summarised in an exclusive free to download whitepaper 'Digitalisation & AI Drive Competitive Advantage in Automotive Manufacturing’. 

Here are three key takeaways from the report: 

1. Digital transformation priorities are increasingly driven by macroeconomic challenges 

Automotive manufacturers have rarely faced such a complex macroeconomic environment as they do today. Those pressures are unforgiving and it is no surprise to see that digital transformation priorities are increasingly focused upon how they can help to address this complex set of challenges.

Our survey audience identified tariffs and trade barriers as the most significant challenge facing manufacturing operations in their company. The key problem around tariffs is uncertainty: few companies know how or when these trade barriers will be lifted, making it difficult for them to plan with long-term strategic goals such as digital transformation. Trade barriers, and wider geopolitical risks, also have knock-on effects in terms of greater cost pressures and supply chain disruption. 

In addition, digital transformation is both a challenge and an opportunity. Asked about the key challenges facing their operations, respondents identify digital transformation as the third most significant challenge. And yet, as we shall see in this report, digital transformation can be empowering in overcoming many of these challenges. 

Q. What are the MOST SIGNIFICANT challenges facing the automotive manufacturing operations in your company? (Select up to THREE)

2. Digital transformation can drive competitive advantage 

The urgent need for efficiency, cost reduction and enhanced productivity are driving forces behind digital transformation initiatives. Today, there is a clear link between the macro challenges facing the industry, and a growing recognition that digital transformation can be part of the solution to gain competitive advantage.

However, focussing digital transformation upon cutting costs and improving productivity raises potential risks around neglecting the growth and innovation potential that digital tools and AI should enable. Notably, there were a wide-ranging 2nd tier of responses including factors which indirectly also lead to enhancing competitive advantage. 

Q. Within your company, what are the MOST SIGNIFICANT issues driving investment in digitalisation? 

3. Human factors are both enablers and barriers to a successful digitalisation journey 

Investing in digital transformation is hard and requires patience. These are never-ending projects due to the fast-changing nature of the technologies that underpin them, and the ongoing volatility of the wider economic climate and business environment.

However, the human factors are seen as essential to a successful digitalisation journey - and they require ongoing, continuous investment to keep up with emerging trends. At the same time, digital and AI skills are increasingly at a premium and they can make or break the success of many transformation agendas. 

Having a strong core data foundation is the second most important enabler of success. This is rightly seen as a critical area for investment as, without this in place, technologies built on top cannot function effectively. 

Q. What do you think are the THREE most important enablers to increase the chances of success in technology transformation? 

4. Integration with legacy systems is a challenge for AI 

More specifically, regarding the challenges associated with implementing AI in automotive manufacturing, the most pressing of all is the difficulty of integrating AI with existing automation and legacy IT systems. This has been a major challenge of digital transformation for many years, and slow progress with replacing and updating legacy systems makes it even more acute today. Cybersecurity concerns are also near the top of the list of concerns - companies are worried about potential breaches and vulnerabilities that can be introduced as they integrate new and potentially unfamiliar technologies. 

Q. What are the most significant challenges for your company in terms of implementing AI in automotive manufacturing? (Select up to THREE) 

This survey was compiled in partnership with Kyndryl & Microsoft