Generative Artificial Intelligence (GenAI) is emerging as a transformative force in the automotive industry, enabling novel applications across vehicle design, manufacturing, autonomous driving, predictive maintenance, and in-vehicle user experience. This paper provides a comprehensive review of the current state of GenAI in automotive, highlighting enabling technologies such as Generative Adversarial Networks (GANs) and Variational Autoencoders (VAEs). Key opportunities include accelerating autonomous driving validation through synthetic data generation, optimizing component design, and enhancing human–machine interaction via personalized and adaptive interfaces. At the same time, the paper identifies significant technical, ethical, and safety challenges—including computational demands, bias, intellectual property concerns, and adversarial robustness—that must be addressed for responsible deployment. An infotainment case study on Mercedes-Benz’s MBUX Virtual Assistant illustrates how