Challenges For The Automobile Industry

Industries generally are grappling with various issues but the car industry is particularly vulnerable. One former CEO was critical of the wastefulness of the industry with a reluctance to share costs with other manufacturers. Necessity is moving many to increased cost sharing. 

Car companies have many issues to deal with and most are not self inflicted. Here are some of them.

Tariffs: These have always been around, usually started to protect local manufacturing but tend to hang around long after that is no longer required. The worst offenders are in Asia, with China recently reducing the threshold on tariffs for premium cars, which is over and above its standard tariff. Why are tariffs required at all? The US has also been using tariffs to encourage more local manufacturing. 

Regulations. Reducing emissions is the goal, achieved with incentives or disincentives. If done with reasonable warning, the industry can adjust. Sometimes, they can prove to be hard to achieve, causing backtracking as with the EU in a recent about face on its 2035 deadline to end fossil fuel vehicles. A relief for some in the industry, but still disruptive for others. 

Instability. A recent semiconductor shortage and raw material issues contribute to production delays. Rising costs for materials, energy and labour is pushing up costs and usually prices. Even logistical disruptions regarding maritime and road transport have to be accommodated.

Technology. Modern cars are becoming even more complex, with emphasis shifting from mechanical engineering (which is still needed) to increased software development for new features. 

Increasing Competition & Development cycles. Many new brands are coming out of China and the fight for market share is hotting up. New model development has been extremely slow in the past but things are speeding up in that area. 

Summary. The consumer is increasingly spoiled for choice, perhaps even bewildered but doesn't necessarily think about challenges the industry is facing. We just want a good product that fulfils our needs. Meanwhile, the industry grapples with all the challenges that come its way. Hurdles it must jump to survive and hopefully prosper. 

Electric Vehicles Proving Expensive

When I say proving expensive, I'm refering to some manufacturers in this instance. In particular Ford and the F-150 Lightning. If the name Lightning implied that would be selling fast, then that would be a misnomer. 

Sales were suggested to be in the 150,000 region per annum. They peaked at 33,500 in 2024 and over the four years it's been on sale, barely got past a combined total of 100,000. The scrapping of federal EV tax credits may have been the final nail in the coffin, but maybe it was doomed regardless. 

The amazing thing is it was the best selling BEV truck in the US. Mind you, the Cybertruck wasn't exactly competition, just a little opposition. Still there are others out there and they were beaten too. Despite that, Ford has decided to end the Lighning. 

So this u-turn is costing the company billions of dollars, according to Ford. From the outset, I never saw BEVs as an ideal mass market vehicle, more likely to carve out a niche. Surely, fuel cell or synthetic fuels have potential for broader mass appeal. 

Some markets see it differently and are pushing BEVs to become the future of mobility, for now at least. One positive is they are providing some stability by not flip flopping. What it shows is that predicting the future is as difficult as it has ever been. Those that are putting a great deal of money into BEVs are taking a risk and already some have been burned. Electric vehicles sure can be expensive. 

Toyota Deeside Wales

The UK produces quite a few car engines. Up to November, 2025 about 1.5 million engines were manufactured YTD. With the world moving away from ICE powered vehicles, that looked like an industry living on borrowed time. Recent pull backs on the move to ban such engines will give this industry a reprieve. 

One such plant is situated in Deeside, North Wales, which started producing engines for the Carina model in 1992. My father grew up in the area, so I do have a connection with it. He worked at the local Shotton Steelworks before moving away. 

According to Toyota, the plant employs around 600 workers and in 2024, a total of 244,463 hybrid & petrol engines were produced. 

They found their way into the Corolla built in Derbyshire, for the C-HR model built in Turkey and the Corolla Cross in South Africa. 

The Deeside engine assembly line has the capability to produce an engine every 44 seconds, the fastest Toyota assembly line of its type in the World.

So if you own any of the models mentioned above, the engine came from Deeside, Wales. Pictures and information sourced from Toyota UK.