When buying a car, 70% of the younger generation see emerging technologies and infotainment features extremely useful. The most successful players in the Automotive Industry market are guided by new trends. XR is a leading technology in many aspects of the Automotive Industry, from manufacturing to sales. You can read about additional perks of using XR in the article.

Over the last few years, emerging technologies are accelerating the pace of disruption in many industries. As the world market becomes more dynamic, major companies start looking for more digitalized and consumer-focused business models. One of the innovations that is currently transforming the automotive sector at a rapid pace is Extended Reality or XR.

Extended Reality: AR, VR, and MR

Extended Reality is an umbrella term, which envisages an artificially created environment, that combines the real and virtual worlds. The term covers virtual, augmented, and mixed realities, which differ in the degree of the user’s immersion.

Augmented Reality or AR is overlaying certain digital content on the existing reality, thus allowing users to get partially immersed into the virtual world.

In contrast to AR, Virtual Reality or VR by ensuring total visionary and sensory immersion replaces the real environment within the artificial one.

In mixed reality or MR, the users interact with a new environment created by merging real and virtual worlds.

XR and Automotive

XR technologies gain traction across all industries. According to Statista, in 2018 the global AR-VR market was estimated to be 12 billion U.S. dollars and is expected to hit 192 billion U.S. dollars by 2022.

In the fast-paced automotive world, companies experience huge pressure from permanently emerging revolutionary innovations. In order to stay ahead and be able to create the cars of tomorrow, vehicle producers have not only to keep track of the new market trends but anticipate and foresee them.

Dynamics of the automotive sector accounts for the fact that it demonstrates the highest rate of investment in AR technologies, as it is evident from the PWC estimate below.

Availability of Immersive Experience

The rapid technological advancement the world is experiencing at present is opening the whole potential of XR-powered technologies, and relative affordability of hardware and development frameworks unleashes multiple opportunities for XR adoption.

Fast connectivity enabled due to the adoption of 3G, 4G, and 5G networks have made the processing power much higher than ever before. For example, iPhone X has become 6 times faster than when it first appeared in the market. Digital cameras are also changing, adding new features and enhancing the old ones. The technological progress becomes clearly evident if we compare the characteristics of the video camera of iPhone 3GS and X, which are 60 fps rendering, 12 megapixels in iPhone X and only 30 fps rendering, 3.2 megapixels in iPhone 3GS. Mass adoption of  XR applications across many industries is accounted not exclusively by their ability to ensure higher quality, but also because AR and VR devices are becoming less and less expensive.

With the appearance of smart sensors, the detection of objects in real time, visual positioning and cognitive recognition are being implemented more and more effectively. Due to matured sensor systems, IoT technologies (Internet of Things) are spreading very fast, at the same time facilitating the need for faster, more intuitive interaction and visualization.

How XR-powered Technologies Impact Automotive Companies?

VR and AR applications have transformed the entire value chain, from R&D to manufacturing, marketing and aftersales, as well as the product itself.

Many major automotive supply chains implement AR and VR technologies as part of their R&D and design processes. Among the most effective applications of AR are prototype testing by the end-customer, VR remote development, and VR-powered self-driving car tests. On the other hand, VR-embedded technologies are more widely applied in the R&D field, where they are mostly used for training purposes and remote manufacturing.

The enlarged reality is also finding its use in the manufacturing and supply field. With the ability of AR and VR to represent complex assets and investigate the mechanical effects of clashes, the automotive industry effectively utilizes limitless possibilities of XR in practice. Some of the applications are AR training, smart glasses assistance in SCM and production, AR-embedded quality control, augmented control of production line, AR-powered vision picking in logistics, virtual factory twins, as well as virtual remote control of production.

In the wake of widespread digitalization, the market of the automotive industry is becoming more consumer-focused. Automotive companies seek to create more personalized marketing models to satisfy their audience. By applying  XR solutions, car producers now offer to their customers augmented and virtual car configurators, showcasing of exterior accessory parts, virtual test-driving, and virtual showrooms.

XR-powered solutions are also penetrating in the delivery of aftersales services. Among the main use cases is rescued assist apps, virtual technical handbooks, and augmented damage analysis.

The Most Prominent Use Cases

Virtual Prototyping

Today, customers are looking for more fuel efficient, greener, safer, and secure cars. In order to meet customer demands, automotive companies have turned to more innovative approaches. Implementing VR-powered prototyping automotive solutions can help car producers better simulate vehicles in terms of volume, size, and distances. Using VR embedding, engineers can directly interact with the virtual prototype of a vehicle and get a better view of all its systems, which enables them to detect conception errors at an earlier stage. Virtual Prototyping allows automotive engineers to correct errors in real time directly on the prototype, which helps accelerate development, improve productivity, reduce costs and in the long run deliver a  better product.


Ford Motor Company has been applying VR-based technologies at various stages of its development processes since 2000. Today, instead of creating expensive physical models,  Ford makes active use of VR for car design by utilizing VR headsets.

“What we’re looking for is the perceived quality of vehicles, as a customer would see them,” Elizabeth Baron, virtual reality and advanced visualization technical specialist at the company, tells Forbes. “We want to be able to see the cars and our designs, and experience them before we have actually produced them.”

Augmented Training

AR has found its use in the transformation of training processes, making them more efficient and automated. Using an AR device, automotive companies can replicate any possible real-life situation without any risks that might occur in real life. By using such devices as AR glasses, headsets or tablets AR training solutions enable employees to see in real time step-by-step processes and procedures


Jaguar Land Rover (JLR) has successfully introduced AR technology into their training programs allowing to educate trainees without having to reinstall or remove the dashboard of Jaguar’s vehicles. Using AR applications, employees can visualize on a tablet JLR internal data with individual components viewed from different angles. This solution helped the company reduce costs, enhance efficiency and improve the quality of JLR vehicles.

Immersive Showrooming

Today, VR and AR technologies are rapidly transforming the way vehicles are sold in the automotive retail industry, at the same time enhancing the customer experience. In the digital era, a customer does not need to visit a car dealership in order to buy a car. Innovative digital showrooms make car purchasing more accessible and engaging for customers, as well as easier and cheaper for car retailers.

According to V12 Data’s research, when buying a car, 70% of the younger generation see emerging technologies and infotainment features extremely useful .

In a virtual reality showroom customers can sit on a chair, which feels as the real car seat, and, by using a VR headset,  get a real-time experience of the car in a 3D 360-degree virtual environment. Furthermore, a potential customer can browse through all possible equipment options and colors virtually, configuring the desired car’s features themselves. As test drives are offered in entirely virtual reality, they generate more audience, cut costs on auto transportation and allow companies to get wider first-hand feedback.


Audi dealership network has deployed functional VR applications for customer consultation. One of the smallest Audi dealerships in the United Kingdom, London Audi City showroom with a total area of only 420 sq m,  by implementing a VR-embedded solution provides its customers with a realistic experience of their individually configured vehicle, down to the last detail.

“With the VR experience, we have developed a full-fledged sales tool for Audi dealers. It offers our customers more information and certainty when making their purchasing decision, as well as a special excitement factor,” says Nils Wollny, Head of Digital Business Strategy/Customer Experience at AUDI AG. “With this, we are taking the next step in our strategy to combine digital innovation with the strengths of the bricks-and-mortar dealership.”

Other XR Applications and Use Cases

Inside the Vehicle

Holographic AR Navigation Systems: Hyundai

South Korean auto giant Hyundai Motor, which has long been associated with innovations, has also applied AR and VR technologies in its business. Recently Hyundai has introduced its AR navigation system equipped on its sedan Genesis G80. The system provides drivers with guidance hints, destination points, navigational information, as well as holographic image alerts on the windshield that are perceived as part of the road.

Outside the Vehicle

AR manuals: Mercedes

Mercedes-Benz deploys AR technology to help its customers better understand car devices. The AR manual offers users a step-by-step virtual guide, which helps to reduce many complexities. With Ask Mercedes, an AR app of Mercedez-Benz, users can scan a machine or specific controls and displays within a vehicle, identifying all embedded features. This solution allows Mercedes consumers to avoid long text descriptions and how-to videos.

The Vehicle Creation

Planning of Production Plants: BMW

The BMW Group Production has been focusing on extended reality for a long time. By implementing XR, BMW enabled assembly planners to assess the whole production in a virtual environment, as well as test new processes in 3D.

Matthias Schindler, responsible for Virtual Planning and Implementation in Production at the BMW Group, said: “Virtual reality technology has enabled us to set up cockpit workstations quickly and efficiently. Time-consuming trial installations that replicate the workstation in its actual dimensions were no longer needed. And the fact that all the specialists involved – from logistics experts to systems planners to production employees – were easily able to exchange ideas in the early stages was an important added benefit for the team. We were more transparent, more flexible and faster overall.”