Michigan auto industry faces market share decline as tariffs escalate production costs

In a recent meeting of the Michigan House of Representatives, lawmakers discussed the ongoing challenges facing the state's automotive industry, particularly the decline in market share for the Detroit Three automakers—General Motors, Ford, and Stellantis. While GM has shown signs of recovery with a rising market share, Ford's performance has remained flat, and Stellantis is struggling significantly, raising concerns about its impact on Michigan's economy.

The meeting highlighted the importance of monitoring employment trends within the automotive sector, especially as Stellantis employs more production workers in Michigan than its competitors. The decline in market share is alarming, particularly as the industry shifts towards hybrid and electric vehicles (HEVs and EVs). Although there was a surge in EV sales earlier this year, recent data indicates a slight downturn, prompting automakers to reconsider their strategies.

Michigan's share of light vehicle production has been volatile, currently sitting at 16.5% of U.S. production, with a heavy concentration on pickups and SUVs—vehicles that are more profitable for manufacturers. However, the state has seen a decrease in powertrain employment, which is concerning as the industry transitions to electrification.

Lawmakers also discussed the potential impacts of recent policy changes, including proposed tariffs and the elimination of EV tax credits. These changes could lead to higher vehicle prices and affect consumer purchasing behavior. The discussion underscored the need for a consistent tariff policy to encourage investment in U.S. manufacturing, as rising costs and uncertainty could push production out of Michigan.

The meeting concluded with a call for vigilance regarding the evolving landscape of the automotive industry, emphasizing the need for Michigan to adapt to these changes to maintain its competitive edge. As the state navigates these challenges, the focus remains on supporting local employment and ensuring the long-term viability of its automotive sector.