“Survey Also Shows Growing Use of AI and Quality Strategies to Address Challenges”
HUNTSVILLE, AL – The third annual Octave Pulse of Quality in Manufacturing survey reveals critical insights into the quality challenges and opportunities automotive manufacturers and suppliers are facing in 2026, such as rising costs and uncertainty due to geopolitical challenges, product recalls, labor shortages and regulatory requirements, as well as the widespread use of AI and quality to offset the challenges.
Fifty-eight percent of respondents in the automotive sector said that trade tariffs and geopolitical tensions have impacted their business, forcing them to:
Increase prices (66%)
Consider onshoring parts of manufacturing (60%)
Find new domestic suppliers (56%)
Curb overall spend (12%)
The study also indicates that automotive manufacturers and their suppliers are either using AI today or plan to use it within the next two years within their quality operations. They’re also elevating quality from a functional discipline to a strategic priority that can have a material impact on their business.
“The automotive industry is at a pivotal moment. Against a backdrop of trade tensions, heightened manufacturing complexity, product recalls and new compliance mandates, quality is no longer just a function — it’s a strategic lever for growth, resilience and competitive advantage,” said Vick Vaishnavi, head of Octave Reliance. “This year’s Pulse of Quality in Manufacturing survey findings make it clear that the automotive industry is doubling down on quality investments and embracing AI to drive smarter operations.”
For The Pulse of Quality in Manufacturing 2026 survey, Octave collected real-world feedback on the state of quality in manufacturing, as well as the trends, issues and challenges that are top of mind among automotive professionals across the U.S., U.K. and Germany. A sampling of 276 managers and directors in mid-to-large-sized automotive manufacturing firms (with1,000 – 50,000+ employees) were surveyed.
In addition to the impact of geopolitical tension and trade tariffs, five findings from the survey, include:
1. AI adoption in quality operations has reached the mainstream Nearly half (42%) of automotive respondents are already using AI — and 47% plan on deploying AI in two years. The types of AI being deployed, include:
Generative AI chatbots (51%)
Augmented intelligence (AI-guided work instructions – 49%)
Computer vision (41%)
Agentic AI (39%)
Predictive analytics (41%)
Digital twins (24%)
The top AI use cases for automotive quality professionals include automating document processing (50%), automating core processes (45%), improving staff training (40%), spotting defects (38%) and predicting future trends (35%)
2. Product recalls remain a costly and persistent challenge
Despite increased investment in quality, recalls continue to impact most automotive manufacturers.
74% have experienced a product recall in the past five years
46% said the cost to rectify each recall is between $10M and $49.9M
47% cite internal issues as the primary cause and 42% said they are caused by suppliers
3. Regulatory requirements and complexity are on the rise
Seventy percent of respondents said that internal and external compliance requirements have increased in the past 12 months.
For automotive suppliers in particular, adherence to Advanced Product Quality Planning (APQP), Failure, Mode and Effects Analysis (FMEA), Product Part Approval Process (PPAP) and change management and supplier qualification workflows are core requirements within AIAG/VDA guidance and IATF 16949 standards. This ensures consistent execution and audit readiness across the value chain.
4. Workforce shortages are putting quality at risk
A widening skills gap is directly affecting product quality across the industry.
68% report being impacted by labor or skills shortages
83% say these shortages are negatively impacting product quality
Manufacturers are elevating quality to a strategic, revenue-driving priority
Investment in quality is accelerating as automotive organizations tie it directly to business performance. In fact, 70% of respondents said their organizations expect to increase spend on quality programs in 2026. The key drivers to increased quality investments include:
Increased revenue (49%)
Improved compliance (48%)
A stronger supply chain (39%)
Reduced costs (35%)
Reduced risk (29%)
About the Survey Methodology
The survey was given to individuals within automotive sector organizations responsible for compliance, continuous improvement, digital transformation, document control, IT, Lean Six Sigma, process improvement, quality management, regulatory affairs and supply chain management.
Click here to download the Pulse of Quality in Manufacturing 2026 eBook.
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Octave (NASDAQ:OCTV) provides mission-critical software that empowers organizations to make informed decisions across every stage of the asset lifecycle — Design, Build, Operate and Protect — where performance, safety and reliability are non-negotiable and failure is not an option.
Turning complex operational data into actionable intelligence, Octave connects expertise, real-world conditions and enterprise-scale insight to improve performance, resilience and incident response where it matters most.
Octave has more than 7,200 employees in 45 countries. Learn more at octave.com and follow us on LinkedIn.
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FOR MORE INFORMATION, CONTACT:
Chris Nahil, Director, Public Relations and Analyst Relations, Octave, +1 617.529.6126, [email protected]
Linda Savage, Pendergast Consulting (for Octave), +1 224-7905, [email protected]