FRM 2025: Sector Report Automotive Industry KPMG in Germany

The next decade will undoubtedly see dramatic changes in how we drive, how we share vehicles, and how we engage with the technology that powers our transportation systems. Self-driving vehicles rely on artificial intelligence (AI) and machine learning algorithms to process real-time data from cameras, sensors, and radars. The goal is to enable cars to make decisions and navigate without human intervention. In 2025, automakers will continue improving AI systems’ reliability, reducing the likelihood of accidents, and enabling safer autonomous driving experiences. Personalising the IVX will drive the need for AI agents, which is one reason why EDA tool vendor Synopsys is working with Sima.ai. Across in-vehicle infotainment (IVI) and advanced driver assistance systems (ADAS), there have been various OEM innovations in the past year, with AI models being integrated into these systems.

Automotive trends in 2025 impacting middle-market organisations

Autonomous driving technology is one of the automotive industry’s most exciting and potentially disruptive developments. While fully autonomous vehicles (AVs) are not yet standard on the roads, significant advancements are being made in 2025 toward realizing the vision of driverless cars. Companies like Tesla, Waymo, and others are working tirelessly to refine the technology, which includes machine learning, computer vision, and lidar (light detection and ranging) systems. The upcoming automotive industry trends refer to evolving changes in patterns within the sector that influence vehicle design, production, marketing, and usage. Technological advancements, along with changing consumer preferences, regulatory changes, and global economic conditions, are driving these trends. The automotive industry is highly dynamic, and these trends are subject to change over time.

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These tools equip dealerships to handle inquiries efficiently, thus freeing time for other important tasks. They further assist with management, maintenance, and repair appointments, as well as streamlining operations. Voice search assistants help optimize interfaces for advertisements and voice search queries. For the eighth time, we asked managers and decision-makers in the automotive industry which trends and developments they are currently focusing on.

Launching of fuel cell EVs

Telematics adoption in logistics and transportation industries is driven by features such as real-time tracking, driver behavior analysis, and fuel consumption reduction. Join us today and access AMS’s wealth of global news, insights, intelligence and content, and to make valuable connections with your peers from across the automotive industry. Volkswagen is using digital twin technology at its Wolfsburg plant to simulate and optimise production processes for the Tayron SUV.

Motomatix develops Auto Parts Ordering Platform

It manages functions such as steer-by-wire, brake-by-wire, engine control, and ADAS. At the same time, governments and companies view subscriptions as a pathway to scale EV adoption without heavy upfront investments. Bosch demonstrates this through 77 GHz radar modules integrated into adaptive cruise control and collision avoidance systems. LiDAR enables high-resolution 3D mapping by emitting laser pulses to measure distances.

NuNami designs Vehicular Interface Systems

The startup develops protocols for drone charging networks, drone flight planning, and open mobility. Advanced manufacturing technologies, such as megacasting and giga-stamping, are playing a pivotal role in enabling the industry’s transformation. Megacasting, which involves producing large aluminium castings to replace multiple smaller components in vehicle structures, is gaining momentum in the automotive industry. Shared mobility reduces individual car ownership, especially in urban areas, impacting vehicle sales volumes but increasing demand for fleet vehicles and mobility-as-a-service (MaaS) platforms.

Aviva Links advances In-vehicle Connectivity

• As 5G and the Internet of Things (IoT) continue their growth, vehicles are becoming more and more connected.
• Bloomberg New Energy Finance expects EVs to account for 10% of all new car sales by 2025 and 58% by 2040.
• Moreover, Avvenire has a strategic agreement with Daymak International Inc., Canada’s leading LEV distributor.
• It then adjusts driving decisions to minimize motion sickness and maintain smooth operation.
• The current trends in the automotive industry seen in previous years will remain in 2025 and are likely to become automotive future trends.
• These cars offer numerous benefits, not just for drivers and manufacturers, but also for passengers and the environment.
• Dealerships need to integrate strategic frameworks to capture potential buyers across different stages in the process with the use of social media marketing, click-to-call conversions, and messaging apps.

The platform LM Mission ControlTM offers free-floating or station-based car sharing, advanced shuttle services, shared dockless scooters, keyless rental programs, and peer-to-peer shared mobility. Further, their drivers use out-of-the-box or white-labeled apps to manage reservations or remotely access vehicles. Factories equipped with IoT-enabled devices and machine learning capabilities are emerging as the backbone of next-generation automotive production. These facilities use data-driven insights to optimise processes, reduce energy consumption, and increase operational efficiency.

🔋 Battery Technology Breakthroughs and Range Anxiety Solutions

• Subsidies and incentives for EVs are also under scrutiny, with plans to reconsider or eliminate government-imposed market advantages that favour them.
• The AI system answers the driver’s query by cross-referencing data from the car’s diagnostics.
• With EV makers in China engaging in a price war due to declining demand, Chinese brands with strong hybrid presently are gaining popularity.
• The global automotive sensor fusion market is projected to reach USD 3.3 billion by 2030 at a 42.4% CAGR.
• By securing these systems, cybersecurity prevents hijacking of steering or braking functions, protects sensitive driver data, and shields automakers from costly recalls and reputational harm.
• As battery technology and charging infrastructure progress, EVs lead the push toward sustainability.

The study offers data-based insights and recommendations for action for decision-makers in the automotive sector. Gain in-depth insights into the key developments that characterise the automotive industry. UK-based startup Distributed Additive Manufacturing (DAM) offers 3D printing services including design, building, and finishing of parts.

Top 10 Global Automotive Industry Trends in 2025

• Many enterprises are moving ahead to create autonomous vehicles with all the multi-faceted benefits.
• Our new generation which is called millennials or Genz researches everything online before the actual purchase.
• We explore eight most influential trends expected to define the automotive manufacturing landscape, offering insights into what lies ahead for the industry.
• Also, its platform manages claims and mechanical breakdowns across vehicle models from manufacturers.
• Vehicle-generated data facilitates predictive maintenance, fleet management, and accident response.
• Automakers need to redesign their vehicles or should look for other chip options available.

However, the demand for parts is also being diminished by the increasing quality of newly manufactured vehicle parts. In addition, the ecommerce automotive aftermarket market is worth an estimated $85.28 billion. The company already has 50 Level 4 autonomous trucks operating in the Southwestern United States. One of the most promising companies in the autonomous trucking ecosystem is TuSimple. The number of autonomous trucks on the road was expected to increase from roughly 150 in 2020 to over 2000 in 2021. It’s expected that the $800 billion trucking industry could benefit from a significant reduction in the 4900 trucking-related deaths that occur each year if only Level 3 or 4 autonomy would gain traction.

What are the Current Trends in Automotive Industry ( ?

By leveraging tech and sustainable practices, the automotive sector can meet the challenges of tomorrow while delivering exceptional value to consumers. This digital transformation enhances scalability, a key driver in the competitive automotive sector. Companies like Huawei are allocating significant resources to developing EVs with cutting-edge ADAS and autonomous features. These technologies aim to reduce accidents and provide a safer driving experience. As we look ahead to 2025, these trends highlight the challenges and opportunities that manufacturers face.

Automakers need to redesign their vehicles or should look for other chip options available. The AI in Automotive industry in 2026 is evolving as AI, autonomous technologies, and software-defined vehicles reshape global mobility systems. This AI in Automotive Market Report examines the trends and technologies driving vehicle intelligence, operational efficiency, safety advancement, and data-driven mobility innovation. What initially appeared to be a niche sector is now the foundation of the auto industry’s transition. While automakers spend billions developing electric cars, most governments worldwide have ambitious plans to phase out internal combustion engines.

The efficiency of electric power fused with the reliability of traditional engines has contributed to the rise of hybrid vehicles. Hybrid vehicles present the perfect compromise of lower emissions and enhanced fuel economy without the need for charging. In 2024, hybrids saw a YoY growth of almost 19%, which is expected to grow to over 23% by 2025. In 2025, used passenger car registrations are forecast to hit 179 million globally and are predicted to grow by 1.4% year-on-year. The cost of new cars remains at an all-time high, and with higher interest rates, consumers are likely either to wait for rates to decrease or to turn to the used car market.

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While regulatory hurdles remain, 2025 will likely see significant progress in integrating these services into urban infrastructure, offering consumers affordable, sustainable alternatives to owning a car. On top of all the 2025 automotive trends there will be the impact of tariffs set by the US and Europe. With the new administration of Donald Trump in January, the trade war with China will have a major impact VIN history for student car loans on the automotive industry in 2025.

Automotive Manufacturing North America

Software-defined vehicles (SDVs) convert the auto industry by shifting control from hardware to software. Automakers move from fleets of electronic control units (ECUs) toward centralized computing platforms that run multiple domains on Systems on Chip (SoCs). Vehicle subscriptions reduce financial barriers for consumers and offer bundled insurance, maintenance, and roadside assistance in predictable monthly fees. For businesses, the vehicle subscriptions lower capital requirements and simplify fleet management. The startup’s sensors provide consistent performance by transmitting and interpreting signals effectively. They also prevent crowding in frequency bands, which is essential for ADAS and autonomous driving.

• The strides made in EV battery innovation, renewable energy adoption, and sustainability are paving the way for a more resilient and forward-thinking industry.
• Chinese EV automakers’ expansion into new markets, including Europe, other Asian countries, and Latin America as previously mentioned, could see a completely new global EV landscape.
• The segment’s sales will rise in the first six months of fiscal 2025, while the industry’s revenue will increase at the same pace to $33.8 billion.
• Connected cars are equipped with cutting-edge technology that allows them to connect to the Internet, other vehicles, and external software.
• Vehicle cybersecurity drives one of the fastest-growing areas in the auto industry as connected vehicles multiply and cyber risks intensify.
• By leveraging these factors, Statevolt is positioning itself to meet the rising demand for EV batteries in an increasingly competitive market.
• While automakers spend billions developing electric cars, most governments worldwide have ambitious plans to phase out internal combustion engines.

These are the old and traditional methods that buyers use to contact dealers or check your products or information about the brand on search engines. Buyers check all the accessible platforms like your social media, website, videos, and more. Buyers would be shifting to a new modernized model and will directly deal with OEMs (original equipment manufacturers) and the dealer will play the role of an agent. By the second quarter of 2024, global cyber-attacks had surged, with organisations facing an average of 1,636 attacks per week—a 30% year-on-year increase.

• It builds connected EV models that operate reliably on diverse terrains and promotes sustainable mobility solutions for the region.
• The connected car market is a battleground for tech giants and traditional automakers alike.
• For instance, AI-driven intrusion detection systems adapt to new attack patterns and block breaches before they spread.
• This enhances autonomous driving capabilities, traffic management, and safety features.
• This makes sense, as 83% of car customers already said they wish they could save time by shopping online.

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The automotive industry report of the Future Readiness Monitor 2025 provides differentiated insights into strategies, challenges and fields of action in the industry. The trends in automobile industry and startups outlined in this report only scratch the surface of automotive innovations that we identified during our in-depth research. Identifying new opportunities and emerging technologies to implement into your business early on goes a long way in gaining a competitive advantage.