In a world where global trade dynamics shift overnight, automotive original equipment manufacturers (OEMs) are under pressure to do more than innovate—they must adapt, anticipate, and act with precision. While the industry continues its journey toward electrification and software-defined vehicles, a new challenge has emerged: navigating the volatility of trade situations.
In this environment, the industry should see AI as a strategic lever for resilience. Based on a recent survey from the IBM Institute for Business Value (IBV), two-thirds of executives at OEMs say that AI will significantly enhance their ability to respond quickly to market disruptions and shifts in consumer preferences.
At the same time, let’s not forget to continue innovating products, business and operation models utilizing AI technology advancements.
AI to navigate trade strategy
Trade and tariff concerns are now boardroom-level issues. OEMs are evaluating impacts of shifting policies and regionalization. In IBM’s February 2025 survey, supply chain leaders cite global trade tensions as the second biggest challenges in 2025, followed by geopolitical risks.
Chief Supply Chain Officers were already concerned about supply chain disruption in 2022—citing it as one of the biggest challenges the organization faced. Many automotive companies have been integrating AI to improve supply chain operations.
For example, AI can help OEMs simulate trade scenarios, assess cost impacts, and optimize supply chains in real time. Imagine being able to model the effect of a new tariff on your battery supply chain—and instantly identify alternative suppliers, routes, or pricing strategies. One of the biggest benefits from generative AI is predictability and responsiveness to operational disruptions, according to 60% of Chief Supply Chain Officers.
That’s the power of AI-driven agility.
AI driven innovation for automotive
Beyond trade situations, the automotive industry is going through a fundamental transformation—innovating their products, services and operations. The impact of AI is seen in many areas, but some will see immediate outcomes, for example:
- Sales & Marketing: AI-driven personalization is expected to boost customer lifetime value, retention, and sales closing rates by more than 25% over the next three years. OEMs are also using AI to optimize digital marketing spend and customer support. 70% OEMs say that AI-powered customer insights are expected to progress in next few years, and 69% say that AI in digital marketing is expected to progress in next few years.
- Aftermarket Services: Predictive maintenance, fleet management, and over-the-air updates are becoming key revenue drivers. AI helps OEMs reduce time-to-market by 21% for these services. 69% of OEMs say that predictive maintenance and diagnostics are expected to progress in next few years.
- Operations: AI is being embedded into manufacturing, logistics, and compliance workflows—improving productivity and enabling new operating models. 68% say AI powered logistics tracking is expected to progress in next couple of years.
In the next 3 years, 63% of auto executives believe AI will deliver a clear and measurable competitive advantage to their company, and revenue attributable to AI will increase from today’s 6% to 10% in 2028.
What OEMs Can Do Now
Embed AI into trade and supply chain operations: Use generative and agentic AI to model risk, optimize sourcing, and simulate policy impacts.
Innovate customer facing operations with AI: Use AI to personalize, predict, and retain across the customer lifecycle; achieving business results in a faster timeline.
Speed up innovation across operating models: Redefine workflows and processes around AI operating models; improving productivity and creating new revenue sources.
Find more insights:
Please download insights on the IBM Institute for Business Value website:
- Automotive in the AI era: https://www.ibm.com/thought-leadership/institute-business-value/en-us/report/automotive-in-ai-era
- Scaling supply chain resilience: https://www.ibm.com/thought-leadership/institute-business-value/en-us/report/supply-chain-ai-automation-oracle
- The intuitive supply chain: https://www.ibm.com/thought-leadership/institute-business-value/en-us/report/supply-chain-ai
Meet the author:
Noriko Suzuki, Global Research Leader, Automotive, Electronics, Energy and Utilities Industries, IBM Institute for Business Value
Join us to continue the conversation:
To explore how AI-ready data is powering this transformation, join CAR and IBM as we host a live webinar, “Inside the AI-Powered Supply Chain: IBM’s Story and Automotive Leaders’ Perspectives” on August 12 at 1:00 p.m. EDT. The session will highlight how IBM applied AI to reduce supply chain costs and improve fulfillment accuracy—and the opportunity for automotive. The session will also feature insights from leading OEMs and analysts on how automotive companies are planning or piloting AI for supply chain transformation.
To add the event to your calendar, register here.