Amid geopolitical uncertainty, energy transition pressures and rapid technological change, KPMG International’s Industrial Manufacturing (IM) and Automotive CEO Outlook 2025 reveals a sector that remains cautiously optimistic about growth. This confidence is underpinned by improving demand expectations, accelerating investment in artificial intelligence (AI), and a sharpened focus on supply chain resilience, productivity and long‑term value creation.
The report captures insights from 230 CEOs globally—110 from automotive and 120 from industrial manufacturing—including leaders from India. It reflects leadership sentiment across two sectors navigating one of the most significant transformation periods in decades.
Globally, automotive and industrial manufacturing CEOs are operating in an environment defined by volatile demand, geopolitical fragmentation, cost pressures and rising sustainability expectations. Rapid advances in AI, automation, electrification and digitalisation are reshaping operating models and competitive dynamics. In response, leaders are strengthening portfolio discipline, enhancing operational resilience and deploying technology to protect margins and improve execution.
These trends are especially relevant for India. While companies benefit from strong domestic demand, infrastructure investment, localisation momentum and policy support, they also face increasing expectations to decarbonise operations, secure supply chains, accelerate digital maturity and build future‑ready talent to remain globally competitive.
Indian automotive and IM leaders are increasingly shifting from AI experimentation to enterprise‑wide deployment of advanced manufacturing and digital technologies. AI is being applied to improve forecasting accuracy, quality control, predictive maintenance and end‑to‑end supply chain visibility. This transition is accompanied by greater emphasis on workforce upskilling, cyber resilience, responsible AI adoption and embedding sustainability into core manufacturing strategies.
Jeffry Jacob, Partner and National Sector Leader -Automotive, KPMG in India said “The global automotive sector is cautiously optimistic, with CEOs sharpening their focus on portfolio discipline, supply chain resilience and technology enabled productivity as they navigate geopolitical uncertainty, cost pressures and the transition to electrification. For India, these findings underscore a clear inflection point. With strong domestic demand and accelerating localisation, Indian automotive companies are well positioned to move from AI pilots to enterprise wide deployment. The ability to execute at scale, while embedding sustainability and digitalisation into core operations, will determine long term competitiveness and value creation.”
S Sathish, Partner and National Sector Leader, Industrial Manufacturing, KPMG in India said “Given the dynamic geopolitical situation, global industrial manufacturing CEOs are prioritising cost efficiencies, supply chain & operational resilience and long term value creation. They are looking at technology and AI as an enabler to address the dynamic situation. Workforce skilling and decarbonisation embedded in operations are getting increasing focus. Embracing all these may no more be a choice, but a necessity for sustained growth and a stronger business performance.”
Below are key highlights from the 2025 Industrial Manufacturing and Automotive CEO Outlook :
Confidence in industry growth remains strong, with 87 per cent of automotive CEOs and 81 per cent of IM CEOs expressing confidence in their sector’s growth prospects. However, only around three‑quarters remain confident in their own organisation’s ability to execute transformation at speed and scale, highlighting an execution gap.
81 per cent of automotive and 68 per cent of IM CEOs say AI is a top investment priority
AI is a top investment priority, with around 70 per cent of automotive and industrial manufacturing CEOs planning to allocate 10–20 per cent of their budgets to AI, automation and digital technologies over the next year.
Supply chain resilience ranks as the number one operational priority, cited by 47 per cent of automotive CEOs and 63 per cent of IM CEOs, reflecting ongoing concerns around geopolitical disruption, trade fragmentation and resource constraints
CEOs of both sectors increasingly view AI‑enabled productivity, automation and data‑driven decision‑making as critical levers for margin improvement, with a strong majority identifying technology‑led efficiency gains as central to their growth and competitiveness agendas
66 per cent automotive and 69 per cent IM CEOs admit that they are still learning and adapting their organization’s ability to navigate regulatory and political differences across markets
58 per cent automotive and 43 per cent IM CEOs are focusing on collaboration and partnerships to drive innovation while adhering to environmental and regulatory requirements
The biggest challenge in attracting and retaining AI talent is bridging the gap between existing skills and desired capabilities (33 per cent for IM and 29 per cent for automotive)
49 per cent of IM CEOs and anticipate ‘high impact’ deal activity with automotive executives at almost the same level (44 per cent)
Together, these insights point to an automotive and industrial manufacturing sector—globally and in India—at a critical inflection point. Organisations that invest decisively in AI‑led transformation, resilient supply chains, workforce capability building and sustainable manufacturing models, while maintaining strong governance and execution discipline, will be best positioned to lead the next phase of industrial growth.