In 2025, digital transformation is no longer a trend—it’s a critical requirement for survival. Across industries, businesses are adopting smarter, faster, and more connected technologies to stay competitive.

In the automotive manufacturing industry this transformation is increasingly driven by a combination of technological advancements, shifting market demands and ongoing labor  shortages. The rise of technologies like cloud-based MES platforms, real-time analytics, and AI-driven planning tools is accelerating change across the factory floor.

Labor shortages mean manufacturers face higher wage bills and are unable to fulfil orders or scale up their businesses. According to a 2022-2023 ABB Robotics survey, 31% of automotive industry experts cited labour shortages as one of their top three problems. And 35% were concerned about increasing labour costs. 

Without the skilled workforce needed to create top quality components and vehicles, digitalization offers a game-changing solution. But the gap between businesses embracing these technological developments and those sticking with the status quo is widening.

Implementing the latest technologies isn’t just an optional add-on – it’s essential. By embracing smart systems and automated workflows, manufacturers can maintain throughput and improve resilience even with fewer human resources.

With these changes also come challenges, like cybersecurity threats, worries about data privacy, and a lack of skills amongst the workforce. This shift also demands new business strategies that integrate digital capabilities into core functions, from design and procurement to quality control and delivery.

So, as an OEM or Tier 1 supplier, how do you navigate these issues and solve your most urgent problems in an ever-evolving, increasingly- connected world? This guide will outline the ways automotive digital transformation can help tackle labour shortages, improve operations, save costs, and deliver more value for your customers—and show you how to easily implement them.

What Issues Are Automotive Manufacturers Facing Today?

In the high-precision, high-performance automotive sector, there’s no room for inaccuracies or mislaid components. A single error can cascade across the supply chain, affecting delivery schedules, budgets, and customer expectations.

When even the smallest drop in accuracy has major repercussions for production times and costs, the impact of outdated or legacy tech can be huge. Legacy systems limit visibility, delay decision-making, and make it harder to scale.

Labour shortages mean manufacturers face higher wage bills and are unable to fulfil orders or scale up their businesses. According to recent research, 31% of automotive industry experts cited labour shortages as one of their top three problems. And 35% were concerned about increasing labour costs. 

We speak to countless business leaders who need a solution to these and other major problems, like bottlenecks, downtime, and supply chain delays that are slowing down operations and cutting into profits. They’re often reliant on old systems or manual processes, which means they’re also missing out on significant potential improvements in operational efficiency and growth.

Common challenges holding manufacturers back today include:

• Lack of real-time visibility across production lines
• Limited integration between systems and suppliers
• Inability to adapt quickly to sudden demand changes
• Overreliance on manual tracking or paper-based processes

In a sector defined by speed, accuracy, and scalability, these inefficiencies are no longer sustainable.

Smart Technologies + OEMs and Suppliers = Problem Solved

The future of automotive manufacturing lies in intelligent, connected systems. Spearheaded by technologies like RFID tags and readers, Work-in-Progress (WIP) tracking, robotics and more, digital transformation in automotive manufacturing offers real solutions to these business-critical challenges. 

If you’re trying to address challenges like the current labour and skills shortages these technologies are a lifeline.

Automation and real-time data collection via RFID frees up workers from repetitive tasks and streamlines production lines. Instead of manually tracking components, new technologies deliver visibility over every part at every stage of its journey through the plant and beyond. This level of traceability also supports smarter inventory planning and enables faster, more reliable supplier coordination.

This means lower labour costs and requirements, as well as fewer delays or disruptions. These smart systems don’t just address workforce gaps. They save time, reduce waste, and drive down cost across your production processes.

High customer expectations and just-in-time models mean production and workflow efficiency have never been so essential. As the automotive industry evolves, smart technologies enable you to avoid bottlenecks and accelerate throughput and time-to-market. You can monitor work cells and check the speed that parts move through your processes, making improvements and changes as soon as you spot potential issues.

Technologies that connect vehicles, equipment, and production systems also unlock powerful benefits. By building a network of connected vehicles, sensors, and machines, manufacturers can gain real-time insights and reduce costly delays.

When quality control is non-negotiable and even minor defects can trigger costly recalls or damage customer trust, real-time monitoring means you can ensure consistent product standards.

Having a comprehensive overview of your manufacturing environment is key to making data-driven decision-making possible and anticipating changes. It’s not just about tracking – it’s about leveraging data analytics to gain instant insights that drive innovation and improve margins. All from your own dashboard.

Implementing digital solutions has huge benefits and the data speaks for itself. RFID can:

• Increase overall process speeds by up to 88%
• Boost revenue by 20%
• Cut total transportation and lag times by up to 84%
• Increase accuracy by up to 80%.

Even better, these tools help detect anomalies and support predictive maintenance, minimizing equipment failures and preventing unexpected downtime.

Peak Technologies’ Director of RFID and RTLS Solutions, Joe Martin, explains:

‘Instead of struggling to coordinate diverse, complex manufacturing tasks and improve efficiency without proper oversight of what’s going on across their plants, OEMs and Tier 1 suppliers are taking advantage of RFID technology’s unrivalled accuracy and visibility.’

Supporting EVs and Autonomous Vehicles Through Digital Transformation

The growth of electric vehicles (EVs) and autonomous vehicles (AVs) is accelerating the need for smarter, more adaptable manufacturing processes. These technologies require new components, tighter tolerances, and constant innovation—all of which strain traditional systems.

To keep pace, automotive manufacturers are turning to digital platforms that can accommodate:

• Rapid design iterations and testing
• Advanced materials traceability
• Integrated compliance and quality control
• Over-the-air update readiness for software-driven systems

As the push toward connected vehicles and zero-emissions targets continues, digital transformation enables manufacturers to pivot quickly and build what modern mobility demands.

How are AI and Machine Learning Reshaping Automotive Manufacturing?

Manufacturers are facing increasing pressure to boost output, reduce waste, and make faster, more informed decisions—all while navigating complex supply chains and customer expectations. Artificial intelligence and machine learning are proving essential in meeting those demands.

Rather than simply automating tasks, these technologies uncover hidden patterns in production data, allowing manufacturers to predict issues before they occur and optimize processes in real time. For example, AI models can detect micro-defects in components that human inspectors might miss, while machine learning algorithms dynamically adjust schedules based on live plant conditions.

Across production lines, their impact is already being felt:

• Early warnings for equipment failure and material shortages
• Visual inspection systems that continuously learn and improve
• Smarter resource allocation and demand forecasting
• Streamlined product development through AI-driven simulations

As manufacturers pursue greater resilience and adaptability, these technologies are helping transform reactive operations into proactive, data-informed ecosystems. AI and machine learning aren’t just part of the future—they’re actively shaping it on today’s shop floors.

Don’t Get Left Behind As Automotive Digital Transformation Evolves

In 2025, digital transformation isn’t a long-term plan. It’s an urgent priority. Five to ten years ago, transforming a manufacturing process with RFID-enabled solutions was a major investment, requiring significant upheaval. But today, it’s more cost-effective and simple to implement than ever before, and new tech can be seamlessly integrated into existing systems.

Many leading automakers have already restructured their operations around smart technologies, real-time data, and cloud-connected systems—setting new benchmarks for speed and efficiency.

If you haven’t already, now’s the time to upgrade your operations. Holding off on change can mean falling behind in a rapidly evolving automotive market, where new entrants are rethinking traditional business models and prioritizing agility over legacy systems.

Losing out on projects to more technologically adept companies is a real risk for those lagging behind. Buyers increasingly favor suppliers who can deliver speed, transparency, and integration, all made possible through cutting-edge technologies.

As Martin puts it:

‘If you’re not implementing these technologies in your automotive manufacturing solutions, you’re losing money. And if you’re using outdated systems, you’re losing ground to competitors who are embracing digital transformation now instead of waiting to see what’s around the corner.’ 

Simplifying Automotive Digital Transformation for Future-Proof Operations

Digital transformation in the automotive industry doesn’t have to be overwhelming.You might be sold on the idea of upgrading your asset tracking and Work-in-Progress technologies, but we know it can be a daunting task. Despite the greater accessibility of these technologies, you may need help deploying them. Which is where we at Peak Technologies come in.

Whatever your current setup, we tailor solutions to address your unique challenges and aims, ensuring you can optimise your current manufacturing processes and stay competitive into the future. We help you increase your speed-to-market by delivering the solution quickly, so you start seeing immediate value and keep things moving smoothly.

Our world-class team of specialist engineers guides you through the process, from initial assessment of your operational needs, to devising the ideal solution, to seamlessly implementing and integrating it across your operations. We also consider sustainability goals and how digital solutions can reduce waste and energy usage without compromising performance.

We go at your pace, helping you scale up when you’re ready, and always putting your goals at the forefront of our strategic guidance. And we don’t leave it there. We’ll support you for the whole lifecycle of the project, ensuring you can maximise the value from your solutions and deliver the best user experience to your customers.

Our consultative approach means we make it easier for OEMs and Tier 1 suppliers around the world to get started with the latest RFID asset tracking and Work-in-Progress technologies, or to easily upgrade outdated systems so they can improve operations and grow their business. As one of the industry’s trusted technology providers, we focus on long-term results and tight alignment with your broader digital initiatives.

Ultimately, we help you build a smarter, more connected operational ecosystem so you can thrive in the fast-changing world of automotive manufacturing. Ready to future-proof your operations? Talk to the experts at Peak Technologies and discover how easily your team can implement smart manufacturing solutions tailored to your needs.