The automotive industry has always innovated how people experience driving. While many AI features are added to make the car driving experience nice and safe, Augmented Reality in Automotive is the next big thing. Per the “Market Research Future”, the automotive AR market size that stood at $1.2 billion in 2022 is expected to grow at a 40.70% compounded annual growth rate (CAGR) to $25.93 billion by 2032.

Augmented reality in vehicles is the need of the hour. With its apparent advantage to the manufacturing and service process, AR has already established itself as a significant part of the automotive industry in the last couple of years. Its popularity and use cases are only increasing with time, completely transforming the automotive industry.

Augmented Reality in the Automotive Industry

At its core, augmented reality applications in the automotive industry are because of how AR overlays digital information and graphics onto a user’s view of the real world. It, thus, complements users’ experience while driving and enhances how they receive information and remain informed and alert. Apart from safety concerning features of AR in automotive, it greatly benefits from prototyping to improve manufacturing efficiency and a stand-out virtual experience for potential buyers. 

Augmented Reality in cars can provide drivers with useful data projected directly onto the windshield, such as speed, navigation directions, collision warnings, and more. It allows drivers to access information without looking away from the road. 

Automakers and mechanics use AR to assist with design and repair using 3D models to guide and work on prototype flaws. As this practice evolves, it will increase the efficiency of the automotive industry by multiple folds.

What is AR changing for the Automotive Industry?

AR brings changes to the automotive sector that positively impact the car business across design, manufacturing, and sales. Here are some of the biggest changes it has brought that is worth embracing: 

Improve Designing and Prototyping 

Designing and prototyping a car is a complex and costly affair. Also, designing a physical model and multiple iterations after that can be a lot of work. You must review designs and make multiple changes until they replicate the defined build and desired features. Also, AR-based prototypes help quickly fix major flaws and then go for physical prototyping. You will save a lot of money building the prototype. A foolproof simulated 3D design and prototype will save you the costs of wasted models and time for making multiple physical prototypes.

Streamline manufacturing

With Augmented Reality in automotive manufacturing, real-time data sharing and collaboration are possible. It helps quickly eliminate flaws in the designs or the approach. Additionally, it is cost-efficient and less troublesome for the team members as they can regularly monitor the progress in the real environment as if it is happening before them, with details magnified and clear. In short, they can monitor their workflow at a micro level. 

Enhance Quality control

Ensuring top-notch quality is essential. Even a small oversight can lead to disappointment. To ensure that you send a great car to the market that customers love and embrace, ensure quality checks are met. The traditional approach is time-consuming. With AR, you will significantly reduce time testing the smallest details and save time for improvements.

Efficient Workers Training

Training workers is much easier and more cost-efficient than before. There is no need to worry about physical models; even complex designs can be explained easily with AR models. You could be training workers even for things you can not do with physical models. 

Efficient repair and maintenance 

Repair and maintenance are necessary services that any automotive brand offers to its customers. With AR, most minor problems can be solved without seeing the cars in person in a few minutes. Engineers can look for potential flaws through 3D models to suggest fixes. As for complex repair, it can also be done quickly once the problem is identified.

Streamline marketing and sales

Marketing and advertising for automobiles are a huge investment. Since most buyers need a good education of the technical details and car features before purchasing, it can lead to a long sales cycle. AR and other immersive solutions can significantly reduce the sales cycle. Some of the immediate solutions are:

Interactive AR car display

Virtual Showrooms or experience centers are a must to replicate user experience in the physical showroom. They are a simulation that recreates the entire showroom virtually. You can also pair it with AR viewing, allowing users to see products and their details while at home. One need not have to take the showroom tour in person.

3D AR car customization

Adding customization features is another good approach. It can bolster marketing and sales efforts in selling a car or another automobile, for that matter. Traction will be multi-fold if you allow users to customize and assemble cars however they want. 

Best Examples of Augmented Reality in Automotive 

Top car brands like Tesla, Ford, Kia, and others have already started using Augmented Reality in their car manufacturing, marketing, sales, and post-sales. Let us take a look at some prominent examples:


BMW unveiled its latest AR automotive innovation, the i-Vision Dee concept vehicle, during CES 2023 last year. It is expected to show more prototypes this year. This cutting-edge mid-size sedan integrates color-changing E-Ink technology into its exterior for dynamic styling possibilities without the permanence of a paint job. 

And the most futuristic feature was the augmented reality-enabled windshield. It can project a range of virtual data onto the driver’s field of vision, adjustable from basic driving information to full-fledged virtual environments. 


Mercedes-Benz is one of the most proactive adopters of AR and virtual reality (VR) across the automotive sector. It was amongst the first to launch an interactive virtual showroom and develop apps enabling at-home previews of vehicle interiors. 

It is different from others as Mercedes’ usage extends far beyond marketing. The company harnesses XR (encompassing AR, VR, and mixed reality) throughout the design, prototyping, testing, and even assembly processes. Mercedes also leverages these immersive technologies for staff training and enhancing the sales experience. 


In recent years, Volkswagen has steadily increased its exploration and development of augmented reality (AR) innovations. It includes the 2015 self-driving research endeavor, Race Trainer, focused on teaching race circuit driving skills. More recently, in 2020, Volkswagen integrated an augmented reality heads-up display (HUD) into their ID electric vehicle line. It projects navigation arrows, lane markings, and vehicle data into the driver’s field of vision. 

In 2022, Volkswagen revealed an exciting collaboration with Microsoft centered on the HoloLens 2 AR glasses. This project aims to increase road safety by equipping drivers with relevant traffic information and hazard warnings.


Tesla has also been actively cultivating innovations in the augmented reality domain. Code leaks revealed prototyped AR functionality within Tesla’s infamous autopilot system years ago. 

While the company has not unveiled major new AR developments recently, its long-time industry partner WayRay did announce an enhanced reality display customized for integration into future Tesla vehicles.

Way Ahead

With the rising use of AR in the automobile industry, it is likely to aid driver’s experience enormously. It can, thus, amplify the overall growth of the automotive industry. Some of the technologies to look forward to include: 

AR in self-driving cars

Introducing self-driving cars has made AR essential in such setups. It ensures that the owners can control the car even if they are not driving it and make necessary decisions on time.

AR in new-age driving manuals 

New-age driving modules are being developed to help new buyers get equipped with the car and all its features so they can use it to its full potential.

AR is transforming the automotive industry from manufacturing and designing to even after-sales services. It will evolve to provide solutions that aid the driver’s experience as the demands of the customers evolve. And, If you want to add it to your car business, look no further. With PlugXR Platform, create seamless car AR experiences and integrate them into your website, brick-and-mortar showrooms, and all other customer journeys. Book a free demo now to learn more about how we can help!


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