Amid rising geopolitical uncertainty, energy transition pressures and rapid technological disruption, automotive and industrial manufacturing leaders remain cautiously optimistic about growth, according to KPMG International’s Industrial Manufacturing and Automotive CEO Outlook 2025.
The report, based on insights from 230 CEOs globally—including 110 from automotive and 120 from industrial manufacturing—highlights a sector navigating one of its most transformative phases, driven by electrification, digitalisation, automation and evolving sustainability expectations.
Despite challenges such as volatile demand, cost pressures and fragmented global trade environments, 87% of automotive CEOs and 81% of industrial manufacturing leaders expressed confidence in industry growth. However, a gap remains in execution, with only about three-quarters confident in their organisations’ ability to deliver transformation at scale.
A key theme emerging from the report is the rapid shift towards AI-led transformation. Around 81% of automotive and 68% of industrial manufacturing CEOs identified AI as a top investment priority, with nearly 70% planning to allocate 10–20% of their budgets towards AI, automation and digital technologies in the coming year. Companies are increasingly moving beyond pilot projects to enterprise-wide deployment, using AI to improve forecasting, quality control, predictive maintenance and supply chain visibility.
Supply chain resilience has emerged as the top operational priority, cited by 47% of automotive CEOs and 63% of industrial manufacturing leaders, reflecting continued concerns around geopolitical disruptions and resource constraints. At the same time, organisations are sharpening their focus on productivity, portfolio discipline and long-term value creation.
For India, the findings signal a critical inflection point. Strong domestic demand, infrastructure investments and localisation momentum provide a solid foundation, but companies are also under pressure to decarbonise operations, accelerate digital adoption and build future-ready talent.
Industry leaders note that success will increasingly depend on the ability to scale technology adoption while embedding sustainability and governance into core operations. Workforce upskilling, cyber resilience and responsible AI adoption are also gaining prominence as companies prepare for the next phase of industrial growth.
The report further highlights that collaboration is becoming essential, with over half of CEOs focusing on partnerships to drive innovation and meet regulatory expectations. Meanwhile, talent remains a key challenge, particularly in bridging the gap between existing workforce capabilities and the skills required for AI-driven operations.
Overall, the outlook points to a sector in transition—where companies that can balance resilience with innovation, and execution with long-term vision, will be best positioned to lead in an increasingly complex and competitive global landscape.
