Stalled at the Starting Line: Why Nearly Half of North American Auto Manufacturers Are Stuck in 'Stage One' of Digitalisation

Nearly 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 Trump Technology

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. The volatile macro environment is forcing executives to re-evaluate their priorities, with geopolitical uncertainty casting a long shadow over investment decisions.

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

The AI Optimism-Reality Gap

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. Integration with legacy IT remains the single biggest obstacle to deployment, cited by 36% of respondents, ahead of cybersecurity (31%), data governance (31%), skilled labour shortages (30%), and even budget approval (30%).

Source: AMS Automotive Manufacturing AI & Digital Operating Models Survey 2026

The Human Factor: People First

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".

This is a critical insight. Many manufacturers are investing heavily in cutting-edge technologies without first addressing the cultural and skills barriers that prevent those technologies from being adopted effectively. The result is expensive systems that sit underutilised, while competitors who prioritise workforce development pull ahead.

The Widening Gap

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.

The leaders are not just thinking about efficiency; they are thinking about how digitalisation can fundamentally reshape their business models, supply chains, and customer relationships. The laggards, by contrast, are still trying to justify digitalisation investments based on immediate cost savings a narrow lens that often fails to capture the full value.

A Reality Check for Budget Setters

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 to the survey 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. Their collective voice paints a picture of an industry that knows it must transform, but is struggling to find a clear, actionable path forward.

The findings underscore three key imperatives for automotive manufacturers:

1. Prioritise workforce development. Technology is only as effective as the people using it. Investment in skills and change management must precede or at least accompany technology investment.

2. Adopt a long-term view. Short-term cost savings are not enough. Digitalisation must be framed as a strategic enabler of competitive advantage, not just an efficiency play.

3. Tackle legacy IT. The single biggest barrier to AI adoption is integration with existing systems. Manufacturers must invest in modernising their core architecture before they can fully leverage the benefits of AI and automation.

The full report, which breaks down responses by company type, size and role, 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.