Topic pageMacroeconomic volatility, geopolitical tensions, rapid AI developments and increasing sustainability requirements are having a huge impact on structures and processes in the manufacturing and automotive industries. Both sectors are in the midst of a profound process of change. Managers are required to actively shape this change, understand the key drivers and consistently implement priorities.

The Industrial Manufacturing and Automotive CEO Outlook shows how CEOs assess these challenges and where they currently see the greatest opportunities, risks and strategic levers. The results make it clear: despite ongoing uncertainties, many business leaders are generally confident about the future. For the CEO Outlook, we surveyed more than 1,300 executives, including more than 200 from the manufacturing and automotive industries.

The study reveals a remarkable paradox: while expectations for the industry as a whole remain optimistic, confidence in their own organisation is much more restrained.

Managers are pushing for the targeted use of AI

Central topics for managers are sustainable growth, operational excellence and the targeted use of artificial intelligence, including agentic AI. AI is seen as a decisive lever for efficiency and innovation - both in the administrative areas of both industries and along their respective value networks, from industrial processes to service- and customer-oriented activities. This development is complemented by the development of resilient supply chains and agile management of regulatory requirements, geopolitical risks and environmental sustainability as strategic success factors.

Automotive industry reinvents itself

The automotive industry is undergoing the greatest transformation in its history. Electrification, autonomous driving, platform-based mobility solutions and the widespread use of new technologies are changing not only products, but the entire value chain. Global competition is intensifying noticeably, particularly due to China as the dominant force in electric vehicles and battery technologies. Stricter sustainability regulations and changing customer expectations are accelerating the transition to zero-emission vehicle fleets. Cars are increasingly becoming computers on wheels. CEOs are faced with the task of steering radical innovations, managing geopolitical risks and ensuring strategic security of supply, from critical raw materials to resilient supply chains.

The automotive sector is facing comprehensive structural change. New drive concepts, automated driving systems, and data-driven technologies are fundamentally changing business models, processes, and customer interactions. This is giving rise to new areas of activity aimed at consolidating market positions, advancing environmental goals, and creating robust organizational structures. It is crucial to steer this development with a clear strategic focus and to create sustainable corporate value.

Dr. Andreas Ries, Global Head of Automotive KPMG International

Manufacturing industry – innovation übeyond efficiency

Production environments, products, machines and services are now being fundamentally redesigned, engineered and integrated into intelligent, end-to-end systems using advanced robotics, digital twins and AI-powered predictive technologies. This development increases flexibility and operational resilience, but requires new skills profiles, partnerships and ecosystems. At the same time, manufacturing is expanding into strategic future fields such as defence and aerospace, which demand the highest levels of innovation, technological excellence and robust compliance structures. The aim is to ensure long-term competitiveness in an increasingly cross-sector industry.

The confident attitude of many CEOs toward the current upheavals is encouraging. A clear focus on the essentials remains crucial. In the current complex environment, it is all the more important to set clear priorities and take responsibility for the path ahead.

Serjoscha Keck, Partner, German Head of Industrial Manufacturing, Head of Tax Region Hanover/Bielefeld/Münster

The most important results at a glance

55 percent of automotive company CEOs consider best-in-class production and optimised processes to be the most important drivers of profitability in the next three years. Almost one in two also attaches key importance to new business models.

49 per cent of CEOs in manufacturing companies expect significant M&A activities in the next three years. At 44 per cent, automotive CEOs are at almost the same level.

47 per cent of automotive companies consider supply chain resilience to be one of the three most important operational priorities for short-term decisions. In the manufacturing industry, the importance is significantly higher at 63 per cent.

81 per cent of automotive CEOs give the highest priority to investments in AI technologies. In industrial manufacturing, the figure is 68 per cent.

In both sectors, 70 per cent of companies plan to invest up to 20 per cent of their budget in artificial intelligence in the next twelve months.

Recruiting and retaining AI specialists is a key challenge for both industries. The main aim is to close the gap between existing and required skills.

66 per cent of CEOs in the automotive industry and 69 per cent of CEOs in the manufacturing industry say that their companies have not yet fully mastered regulatory and political requirements in international markets.

58 per cent of automotive companies and 43 per cent of manufacturing companies specifically rely on cooperation and partnerships to accelerate innovation and meet regulatory and environmental requirements.

Good governance is more than ever a strategic success factor in the automotive sector. Those who master complex regulatory requirements, for example in the areas of cybersecurity, data protection, and AI governance, and create clear structures will gain the necessary security to drive innovation forward in a legally compliant manner.

Alexander Bock, Partner, Audit, Audit Attestation Sector Head Automotive

Background and methodology

The 11th edition of the KPMG Industrial Manufacturing and Automotive CEO Outlook is based on a survey of CEOs from both industries in eleven key markets conducted between 5 August and 10 September 2025: Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, the United Kingdom and the USA.

The study thus provides a representative insight into current assessments, strategic priorities and future plans of company management.

All of the companies surveyed generate an annual turnover of over 500 million US dollars; a third of the manufacturing companies and half of the automotive companies generate an annual turnover of over ten billion US dollars.

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