Artificial intelligence (AI), data resilience and digital transformation are becoming the defining competitive differentiators for the global automotive industry as companies race to adapt to software-defined mobility and rapidly evolving technologies, according to the KPMG Global Tech Report 2026: Automotive.
The report, based on responses from 258 technology leaders across 22 countries and territories, suggests that automotive companies are moving beyond experimentation with AI and are increasingly focused on scaling technologies across engineering, manufacturing, supply chains and customer-facing operations.
AI moves from pilots to production
The study found that 88% of respondents are confident of revenue growth over the next 24 months, while 74% believe advanced technologies will become the primary source of competitive advantage.
However, the pace of technological change is also creating fresh challenges, with 86% of executives saying technology strategies become outdated quickly and 82% acknowledging the need to take greater technology-related risks to stay competitive.
The report notes that automotive companies are increasingly adopting standardised digital architectures, strengthening machine learning operations (MLOps) and improving data governance to accelerate enterprise-wide AI deployment.
India’s digital transformation opportunity
For India, the report says the findings underline the importance of building strong digital foundations before pursuing large-scale AI adoption.
As the country’s automotive sector transitions towards connected, software-enabled and intelligent vehicles, companies will need to strengthen data resilience, data sovereignty and indigenous digital capabilities while balancing innovation with governance and cybersecurity.
“For India’s automotive sector, competitiveness will increasingly depend on how effectively organisations scale AI, data and digital technologies,” said KPMG India Partner and National Sector Leader, Automotive, Jeffry Jacob.
He said AI must move beyond pilot projects into core business functions such as engineering, manufacturing, supply chains and customer engagement, supported by robust data governance and disciplined execution to deliver measurable business value.
Governance becomes a competitive advantage
The report highlights a shift in how automotive companies view governance. Instead of treating compliance as a regulatory necessity, many organisations are now using governance frameworks to accelerate innovation while strengthening cybersecurity, responsible AI practices and software update management.
The study also found that 53% of respondents believe legacy processes continue to undermine returns on technology investments, reinforcing the need for digital modernisation.
Geopolitical risks reshape technology priorities
The survey indicates that geopolitical uncertainty is influencing technology investment strategies across different automotive segments.
Among vehicle manufacturers, 67% plan to strengthen data sovereignty across partner ecosystems. Truck manufacturers are prioritising onshore technology talent, while Tier-1 suppliers are focusing on improving data infrastructure to support faster decision-making.
New technology component suppliers are tightening technology spending to offset potential geopolitical cost pressures, while mobility solution providers are increasing investments in innovation centres of excellence.
Industry at an inflection point
The report concludes that the automotive industry is entering a new phase where sustained competitiveness will depend on combining technological ambition with operational discipline.
For Indian automotive companies, the challenge will be to industrialise AI, strengthen digital resilience and build scalable technology capabilities that can support long-term growth in an increasingly connected and intelligent mobility ecosystem.