Structural legacy friction and technical debt continue to hinder digital transformation across the global auto sector, despite 88% of automotive executives expressing confidence in revenue growth over the next 24 months, according to KPMG’s Global Tech Report 2026: Automotive.
The study, based on a survey of 258 senior technology leaders across 22 countries, highlights an operational divide between strategic intent and execution capabilities. Although 74% of respondents view advanced technology as the primary driver of competitive advantage, 86% express concern that their technology plans quickly become outdated, and 53% report that poor legacy processes result in reduced return on investment.
Legacy IT Breakdowns and Talent Shortages Cut Deepest at Mobility Providers
Operational friction varies significantly across the automotive value chain. Weekly disruptions to standard operations caused by legacy IT flaws were reported by 30% of vehicle original equipment manufacturers (OEMs), 32% of Tier 1 suppliers, and 67% of mobility solution providers. Furthermore, talent shortages restrict digital transformation efforts for 38% of OEMs, 46% of Tier 1 suppliers, and 60% of new technology component suppliers.
Risk appetite and governance models also diverge by segment. While 90% of mobility providers and 83% of Tier 1 suppliers are willing to take risks on emerging technologies to remain relevant, only 43% of OEMs and 63% of truck manufacturers express the same risk tolerance. In terms of adoption strategies for breakthrough technologies, 84% of Tier 1 suppliers and 93% of new technology providers favor selective adoption, compared to 42% of OEMs and 54% of truck manufacturers.
Geopolitical Pressure Pushes Auto Firms Toward Data Sovereignty and Onshore Tech Hiring
External geopolitical and macroeconomic uncertainties are driving companies toward data localization and talent onshore recruitment. To mitigate operational risks, 67% of OEMs and 56% of truck manufacturers plan to enhance data sovereignty audits across their partner ecosystems, while 65% of truck manufacturers, 61% of OEMs, and 43% of Tier 1 suppliers intend to increase onshore technology hiring.