WE/AR Blog The Ultimate Guide to Augmented Reality (AR) in Automotive
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The Ultimate Guide to Augmented Reality (AR) in Automotive

By Veronika Petrenko
21 min read
Last updated on 19.04.2022 at 08:56

The popularity of AR in automotive applications is widely increasing as this technology combines our reality with digital content to expand possibilities and improve efficiency in this competitive market. 

So, the question is no longer “Should we implement AR technologies in the automotive industry?” but rather “How soon should we implement AR different applications to improve efficiency?”and “How can these applications impact the industry?”

The automotive market continues to grow and is expected to witness a growth rate of 5% in 2022, meaning that every manufacturer needs to secure its spot in the market by introducing new technologies and applications. 

Augmented Reality App Development represent a promising opportunity for all the big names of the automotive market. But what is automotive AR? What are the benefits of using augmented reality in the automotive industry? At WE/AR, we have a team of experts ready to help you learn more about it. 

What is Augmented Reality?

automotive ar
Image from zealar.com.au

Augmented Reality refers to an interactive experience that combines the physical world with digital content. A computer enhances real-life objects by adding effects or displaying features unavailable in our current reality. 

In the automotive industry, AR refers to the process of working with 3D models or enhancing the experience of maintaining a vehicle. It can be used to improve test drive prototypes by showcasing safety features visually or to create scenarios to test those safety features. 

AR applications could be used in several stages of the industry – starting from the design and reshaping processes and streamlining them. These applications can be applied to older models and to compare and examine the possibility of new designs before devoting resources to a new manufacturing process. Similarly, AR can be used in manufacturing. Some are already using AR applications to test how a vehicle can perform in multiple scenarios. Moreover, AR applications can enhance customers’ experience as an owner – in after-sale services. 

How is Augmented Reality Different From Virtual Reality?

ar vr automotive
Image from carscoops.com and techviz.net

AR is different from VR in terms of the technology applied and devices used. VR creates an alternate reality that the user can experience without input from real life, so the whole experience is digitally controlled. In contrast, AR incorporates digitally-created 3D objects and 2D imagery into real life, where the user remains present in the physical world. AR has a bigger impact on the automotive experience – the compound annual growth rate of AR in the car market is expected to increase from 4.51 billion in 2021 to 14.44 billion in 2028.  

Stakeholders like investors and regulatory bodies can see the potential of cars and how they work using 3D models. Stakeholders can also monitor the manufacturing and production process and see if the company is following all compliance rules and guaranteeing the safety of potential customers. 

Types of AR Applications

There are usually two types of AR applications in use for the automotive industry: marker-based and sensor-based applications. 

Marker-based AR applications (also known as image-recognition or image-based AR) use markers that a camera can recognize to activate the augmented experience. Users can manipulate the appearance of physical reality and enhance it using the created digital content on a mobile device or PC.

marker ar
Image from arpost.co

Augmented Reality car showroom applications are examples of using marker-based AR. Using this technology, marketing teams can show the potential of a new product or highlight the features of a new vehicle model with visual explanations.

Marker-based AR can also be used for training purposes. For example, designers and engineers can use it to make sure that they follow the proper instructions and schedule when it comes to the execution. A vehicle’s Head-Up Display (HUD) can use marker-based AR applications that calculates valuable data about the objects that surround a vehicle and displays this information that the driver can refer to. Using this information enables the driver to navigate and drive the car more safely.

Sensory-based AR applications give the user the illusion to be present in an alternate reality. This technology relies on creating multimodal, visual, and audible sensory stimuli to make the user feel that they are present somewhere else. In the automotive industry, sensory-based AR can be used to test-drive a new vehicle before it is produced or test the safety features of a new model by simulating a dangerous situation.

Image from hammburg.com

The LiDAR (Light Detection and Ranging) safety system is a great example of sensory-based Augmented Reality. It emits light particles that hit nearby objects and people, and then the system shows a digital image of these objects on a display. It also calculates the distance between these objects and the car and accordingly estimates the time of projected collision. 

Changes for drivers with AR

AR solutions are already changing the driver’s experience during purchase and even after buying a vehicle. With these new applications, users can experience a new aspect of cars that was not available before. 

Windshield HUDs With Augmented Reality Technology

hud ar
Image from magic-holo.com

Thanks to augmented reality, windshield head-up displays could play a crucial role in making your driving experience more comfortable. AR HUDs provide car drivers with information about the traffic by displaying it on their display, so the driver could make informed driving decisions.

WayRay introduced this technology with its innovative Deep Reality Display® system. The displayed information is incorporated into the driving experience itself. Such data can help navigate new routes, handle stressful traffic conditions, and decide on the best course of action in case something goes wrong. Windshield HUDs do not just display visual information but also explain and guide the driver while they operate the vehicle. This allows drivers to enjoy a safer driving experience in the most challenging traffic or weather conditions. 

Audi and Nissan have already used this technology to provide data from the space around the vehicle. As a result, the driver gains access to relevant information about the unseen hazards that they might encounter while driving. Such a technology has a massive impact on the sales of a specific vehicle as it shows that it offers something innovative. All these extra benefits and services could make the brand gain a competitive advantage in the automotive market. 

AR-Enhanced Digital Car Showrooms 

ar car showroom
Image from motorauthority.com

Tools such as immersive guides could help increase sales in car showrooms and dealerships. Augmented reality applications can be used to display 2D and 3D objects with in-depth information about different car parts and their functions. This type of demonstration is cost-saving, since every aspect of the showroom can be recreated digitally. 

Hyundai introduced immersive AR-based presentation guides to help customers learn about the Sonata car. This technology allows customers to learn about the engine parts, necessary maintenance, and the full potential of the car.

Interactive manuals and demos make a vehicle more appealing, tempting a customer to choose a specific vehicle via AR car showrooms. It also helps improve the brand image in this highly competitive market by showing prospective clients the innovative approach to their vehicles. 

Interactive Presentation Guides

Using augmented reality, the sales team will have a valuable and unique tool that allows them to showcase a new vehicle and talk about what makes it special by offering an immersive experience to customers, investors, and stakeholders. 

Using AR in marketing and sales campaigns through immersive tools makes users feel and use the vehicle, not just reading about it. Moreover, AR presentation guides can be used during the designing and planning stages where the vehicle is yet to be produced. The designers and engineers can compare different models and show stakeholders the differences between specific parts and the value they add.

Augmented Reality Aerography and Car Customization

ar car customization
Image from marketingsquad.net

This is one of the latest applications of AR in the automotive industry. It allows users to see how their vehicle will look with multiple designs and customization options before they finally decide on ordering one. People customize their cars if they want to record a special memory to demonstrate that they belong to a group, practice a specific hobby, or support a cause. But because reversing the process is costly and lengthy, augmented reality is used to avoid making faulty decisions.

How is Augmented Reality Changing the Automobile Manufacturing Process?

Biggest names in the automotive market are already investing considerable amounts to catch up with augmented reality applications. Different AR applications help automotive brands streamline all its production processes by saving cost, time, and human resources, and avoiding legal issues with unsafe products.

AR headsets (e.g. glasses) can immediately direct maintenance engineers towards the right path to address the problem fast. Instead of going through pages of the traditional manual, a maintenance issue will be addressed and fixed faster. 

Enhanced Design, Prototyping, and Testing Using AR

ar testing
Image from relaycars.com

AR applications make the design process efficient. A designer can create a 3D instead of a 2D model and see how it can perform in a real-world situation to test the practicality of a vehicle and its different features. Without having to destroy or crash an actual vehicle, technicians can create multiple scenarios to evaluate a car’s prototype for safety features. 

In the manufacturing process, employees can pass information regarding the assembly of different parts. They can communicate this information to the designers and understand the value each piece of accessory adds to the vehicle without referring to handbooks. Augmented reality is also incorporated with artificial intelligence to streamline the production process, highlight issues, and address them before they affect the assembly of the vehicle. 

Production Capacity Planning Using AR

layar audi
Image from pinterest.com

Production capacity planning refers to the process of calculating the number of units that the company needs to produce in order to meet demand. Using AR, companies are better able to decide on the best way to handle production tasks so that all requests are met without insufficiency. 

Using AR applications, the company can devote more space for production as fewer prototypes are produced. It can also remove testing equipment as virtual tests are conducted to test vehicles and use all the available space to produce new vehicles and cover the market’s needs. 

Audi is already using the LayAR system, which is an augmented reality-based system that gives the planning specialists a 3D overview of the plant’s available space, so they can better utilize it to produce the company’s vehicles

Such a tool can also facilitate remote work and assessment as the facility’s space can be measured wherever there’s access to the application. It can also be used during office meetings to allow other employees and managers to better understand production decisions. 

AR Applications to Assist Service Technicians in Car Repair

car repair ar
Image from industrie.de

Interacting using AR adds an immersive digital element that has a positive impact on the overall repair process. Augmented reality is used to create multiple scenarios that show technicians how to approach a problem without having to disassemble a vehicle or break its parts. 

In the service and maintenance department, AR applications can serve many purposes, from preventing a car from malfunctioning to understanding the precise job of every internal piece to better assess its importance. The digital data is displayed and can be shared with multiple people to ensure better service that can be delivered in less time. 

As a result, service technicians will be able to save time and effort and provide better solutions because they rely on a digital replica of the real vehicle and can examine its parts to determine the source of the issue if the car is malfunctioning. 

At the same time, by revising the digital models, the service technicians can ensure that they’re following the guidelines and delivering adequate maintenance. Moreover, AR can be used to test a vehicle after maintenance to ensure that it’s safe to use. 

AR Training for Workers in the Automotive Industry

AR can create a valuable training opportunity for new and experienced workers alike because it can be used to show all the details of machinery, equipment, and vehicles to guarantee better results. 

During the training session, users have the ability to manipulate various settings, so they can recreate a new scenario every single time. This allows users to train for the most challenging and unexpected situations without being subjected to danger or wasting the company’s resources. 

Famous Car Manufacturers Using Augmented Reality

Brands understand that AR applications are no longer a luxury, but rather a smart investment. In addition, AR applications are used to raise the standard comfort and safety features, so companies incorporate them to support their production. Below are some examples of how the world’s most famous car brands are currently using augmented reality to produce better and more comfortable cars:


BMW uses AR applications during the designing stage to view and assess prototypes before the production process starts to guarantee that the vehicle produced meets the required standards. As a result, the company is able to speed up the production process by an entire year. 

The company already has an app that allows users to test and experience the BMW 7 Series models, with interactive images and informative videos that explain the potential of the vehicle. Customers can open the doors, use the radio, and examine the internal parts of the car digitally. They can even customize and configure the car to create the vehicle of their dreams, then share the customized vehicle on social media or send it directly to a BMW dealership


Porsche is using augmented reality in its dealerships to address challenging technical problems with precise and consistent results. When a car is facing severe technical issues, technicians can wear AR glasses and reach out to a remote expert for help. Maintenance employees are to make better decisions by consulting with other remote workers to decide on the best solution to address the problem. Success of this technology led Porsche tripled AR use since it was first introduced in 2017

In addition, Porsche’s visualizer app allows users to customize a car. The application lets users select the car model, color, and trims and then display it in their garage or any other environment. The app also shows information about features that the customer could enjoy when they actually buy the car.


Ford created an app where designers, engineers, and safety experts are able to experience the car from the point of view of shorter and taller drivers to guarantee maximum comfort. 

The company also uses augmented reality apps to allow users to experience the car remotely, open its doors, examine its interior, and even listen to its sounds. By allowing users to enjoy this immersive experience, the company is expected to achieve more sales.

In the after-sales stage, Ford is using augmented reality to facilitate and improve the repair process. Dealerships collaborate with experienced technicians to deliver better and faster service. At the same time, the repair system records every repair detail for future reference, so technicians have access to the vehicle’s maintenance history. 


Tesla currently uses augmented reality to allow customers to check new cars and go through a virtual tour. Users can also see how the car will look in their physical space and thoroughly examine its details, including the welds and screws. Using this app, a potential customer can add trims and personalize the car however they like. 


Cadillac currently uses an AR-enhanced navigation system. The system notifies the driver of the best time to turn or stop. The new Escalade vehicle features OLED screens to show information about the street, including pedestrians and animals crossing with exceptional night vision features for maximum safety and comfort. 


Kia is offering an augmented reality navigation system that helps car drivers find their way safely. The new AR system is one of the main selling points of the new EV6, and it appeals to new customers who are currently looking for a safe and practical car that can provide a comfortable driving experience. The app also acts as a manual that buyers can use after buying the car to learn more about its different features. 


As mentioned above, Hyundai uses augmented reality to improve customer care services. This brand offers augmented reality manuals and presentation guides that help sell the car by showing off its valuable features in the AR showroom. Moreover, their augmented reality system makes the car experience more fun, as drivers can see navigation directions, take calls, and show 360-degree videos of the vehicle’s surroundings.


In order to engage potential buyers in an immersive and entertaining experience, Bentley offers an augmented reality test drive experience. Drivers can examine different parts of the car and see how it can perform on the road. Customers can study every single detail in the car and see how it looks in their driveway. They can even scan a 3D model of the vehicle on their desk. The AR visualizer allows users to customize the car to see how it looks with various additions. 


Mercedes currently uses AR-enhanced HUDs that show different navigation prompts to make the driving experience more fun and comfortable. The augmented reality application assists the driver in making various decisions in complex situations, allowing them to enjoy a safe ride. 

All the obstacles are highlighted on the display, which also shows information about the road’s condition. All the digitally-generated images are combined with traffic information from the real world to provide users with a stress-free driving experience that allows them to reach their destination fast. 


The digital and real worlds are combined in Volkswagen vehicles via AR HUDs. The company is currently using this technology in the electric ID.3 and ID.4 models to provide an outstanding driving experience. These interactive HUDs provide drivers with information displayed on two levels: the first one shows the driver’s field of view while the other shows the navigation assist system. All the information is updated automatically to provide drivers with information they need to navigate the vehicle.  


Volvo was one of the earliest brands to use augmented reality – in 2012, to introduce its vehicles to a younger target audience. The augmented reality app was used to showcase a new car’s features that make it stand out and convince potential customers that this is the car they have to buy. The brand created an AR game that would engage users with the vehicle in a fun and entertaining way, and this marketing campaign succeeded in increasing the traffic to Volvo’s website. 

Volvo is currently equipping its vehicles with AR-enhanced HUDs to provide drivers with relevant navigation information. By analyzing and digitally displaying different obstacles and traffic conditions, driving and navigating your way using a Volvo will be fun and safe. 


Nissan uses augmented reality technology to incorporate digital information stored in the cloud with real-world objects and data to display a new world on the vehicle’s windshield and windows. Using the AR app, drivers can have their friends virtually enjoying a ride with them, even though they’re located somewhere else. The app can also change how the weather actually looks outside, so you can enjoy a sunny ride even though it’s raining outside


Chrysler is offering customers an augmented reality app to customize and personalize their cars before buying them. The app offers 360-degree mapping that allows drivers to examine their new customized car from different angles and guarantee that they can create a car that responds to their specific needs. The new augmented reality app can pinpoint different problems with a vehicle and explain how they can be solved, saving customers’ time and effort. By taking a virtual tour that examines the exterior and interior parts of a vehicle, a driver can either replace a part on their own or identify the problem before taking the vehicle to the service center. 


Mitsubishi managed to raise its sales by implementing augmented reality in its showrooms and dealerships, starting with Canada. The sales team used the AR app to explain the features of the Outlander model, making this car stand out from the competition. 

The AR app allowed customers to go on virtual tours examining the exterior as well as the interior of the vehicle. It showed potential customers how different parts work instead of relying on the salesperson explaining the car features verbally. The augmented reality app also showed customers the different drive modes that can be experienced with this car and how they can offer fuel efficiency. 


Jaguar has been using augmented reality in design and simulation for years to guarantee the safest and most comfortable driving experience before offering its cars on the market. This technology facilitates the work of the design and manufacturing departments by lowering the number of prototypes needed.

Jaguar is currently using augmented reality to offer virtual tours in its showrooms and dealerships. This technology allows users to examine the interior and exterior parts of a vehicle to see how they function to make faster and better purchase decisions. It also saves the time, cost, and effort needed to market new car models. 

Statistics About the Augmented Reality Automotive Market

automotive ar vr market
Image from statista.com

Statistics show that the market is expected to exhibit a CAGR of more than 32% in the period between 2017 and 2030. The advancement in AR covers both the hardware and software sectors of the automotive industry to provide manufacturers and drivers with better opportunities. These applications are implemented early in the production process, starting from the design process, and can be used throughout the manufacturing and even after the vehicle is sold. 

Augmented reality HUDs are among the most popular applications of this technology as they provide users with better driving experiences through navigation prompts and cruise control. Radars and LIDARs are also popular as they guarantee the safety of the driver and passengers, regardless of the condition of the road. 

According to market research, North America currently represents the biggest market for augmented reality automotive applications, with more than 40% of revenues in this market. However, the Asian Pacific region is likely to show the most prominent growth rate with an expansion CAGR of 35.6%. 

How Covid-19 Affected AR in the Automotive Industry?

The Covid-19 pandemic had a negative impact on the automotive industry, as production lines had to suffer because of workers falling ill and dealerships and showrooms had to close down to comply with government rules. However, AR applications were able to aid the industry in various ways – specifically by reducing the amount of physical contact needed during the manufacturing process, customer journey, and maintenance.


There is still room for growth in the AR automotive market as new trends and apps are constantly being made to enhance cars. From improving the production process to providing customers with an exceptional driving experience, every brand in the automotive market should consider investing in augmented reality to secure its share. 

If you are interested in seeing how XR solutions could enhance your business or brand, feel free to reach out to us at WE/AR via email: hello@wear-studio.com. We would be happy to provide you with the best solution to expand your operations.