The 2025 Seraph Automotive Manufacturing Report highlights three critical themes shaping the industry: tariffs, talent, and technology. Based on industry data and Seraph’s Auto Leaders Survey, the report outlines key challenges, economic pressures, and strategic responses for OEMs and suppliers in North America and Europe.

Strategic Takeaways

• OEMs and suppliers must prepare for tariff impacts: Reviewing footprint strategies and supply chain risk mitigation is essential.
• Cost-cutting and operational efficiency will be a priority, with a focus on reducing scrap, downtime, and logistics costs.
• EV investment strategies need recalibration, as regulatory changes and shifting consumer demand reshape long-term viability.
• Talent development is critical, requiring apprenticeship programs, workforce training, and hiring strategies for reshoring initiatives.

Key Trends in Automotive Manufacturing

1. Volumes & Financials

• Demand remains weak, impacting factory utilization and financial performance.
• Publicly traded suppliers are seeing stronger margins than OEMs for the first time in four years, largely due to improved cost structures and negotiation power.
• OEMs continue to struggle with low volumes, program delays, and a reliance on luxury and high-margin vehicles to sustain profitability.
• Consumers resist high prices, forcing increased incentives such as 0% APR financing and rebates to boost sales.
• Inventory levels have surged to 3.15 million vehicles, nearly triple 2022 levels, causing downward pricing pressure.

2. Tariffs & Geopolitics

• The incoming Trump administration is expected to introduce sweeping tariffs, particularly on China, Mexico, and Canada. At the time of publishing, Trump has threatened (latest tariff updates will be at Seraph’s tariff tracker here):
• China: 60-100% tariffs on all imports, 100-200% on vehicles, aiming to protect U.S. manufacturing.
• Mexico & Canada: 25% tariffs if border issues persist.
• Other trade allies: 10-20% tariffs across industries.
• Tax incentives for reshoring: A 15% corporate tax rate for U.S. manufacturers and 20% for domestic companies.
• European OEMs face pressure as Chinese automakers increase market share with competitive pricing and strong product quality.
• Supply chain disruptions remain a concern, with trade wars impacting component sourcing and potential production shifts.

3. Talent & Workforce Challenges

• Talent shortages dominate strategic planning for 2025.
• Relocations and consolidations are forcing companies to navigate hiring difficulties, wage inflation, and skill gaps. We believe tariffs and resilience objectives will require companies to develop talent cultivation programs as skilled trades are already in short supply.
• Manufacturing hubs like Mexico are struggling to meet skilled labor demand, with concerns over worker retention and availability.
• Plant closures and consolidations are expected to rise as companies optimize footprints to offset demand reductions and uncertainty. .

4. Technology & EV Transition

• EV infrastructure remains a bottleneck: Public fast-charging networks are inadequate outside of major cities.
• We analyzed county level data and determined EV adoption rates are mostly driven by three factors (see the report for deeper analysis):
  • Cost (household income, tax credits)
  • Convenience (charging density)
  • Politics (Democratic-leaning counties adopt EVs at higher rates)
• Tesla remains the only Western EV OEM profitable without subsidies, while other automakers struggle to achieve cost parity, pressure through reduced subsidy or tariffs will further exacerbate this price differential due to the relative concentration of Tesla’s assembly and supply chains in the U.S.
• China leads in charging infrastructure, adding 734,000 public chargers in 2024 alone, while the U.S. remains fragmented, 
• Trump’s policies may cut federal EV incentives, further slowing adoption and impacting EV-focused suppliers.

For more insights, visit Seraph.com or contact meet@seraph.com.

Seraph is pleased to share the webinar of our quarterly industry report—an insightful discussion about the prevailing trends shaping the automotive sector. During this webinar, Seraph’s Founder and CEO Ambrose Conroy and VP of Client Development Jay Butler, and more of the Seraph team provide an outline of the report, accompanied by engaging interactions with fellow leaders who participated in the discussion.

Our Q1 2024 report provided a comprehensive analysis across several key areas: Volumes & Financials, OEM Strategy & EV Adoption, Supplier Outlook, and Adapting to the Road Ahead. Drawing from extensive surveys and industry data, here are the insights:

OEMs are advised to brace themselves for heightened pricing pressures amidst ongoing high interest rates and a reluctance among consumers to purchase new vehicles. Concurrently, suppliers are urged to confront the reality of unsustainable profit margins, prompting the initiation of rigorous negotiations with OEMs. Recognizing the pivotal role of convenience in driving the next wave of electric vehicle (EV) adoption, OEMs are encouraged to make substantial investments in charging infrastructure. Meanwhile, suppliers should prepare for potential fluctuations in demand as OEMs navigate the intricate landscape of the EV market.

With traditional avenues for improving commercial margins largely exhausted, suppliers are advised to explore a diverse range of operational measures. Tactically, efforts should focus on streamlining overheads, simplifying operations, unlocking capital, optimizing manufacturing processes, and fostering both agility and stability.

Operationally, investments in human capital and robust operational fundamentals are emphasized as strategic imperatives that promise enduring dividends.

We are eager to delve deeper into these topics in our upcoming reports and are available for direct discussions to further explore these insights.

Seraph is pleased to share the webinar of our quarterly industry report—an insightful discussion about the prevailing trends shaping the automotive sector. During this webinar, Seraph’s CEO and Seraph Europe’s President will provide an outline of the report, accompanied by engaging interactions with fellow leaders who participated in the discussion.

Our Q4 2023 report centered on three key themes: Demand, Supply, and Evolving Industry Risks.

Regarding demand, our analysis focused on Consumer Finances & Vehicle Affordability, the US EV Market, and the European EV Market. Significant shifts have been observed in the automotive sector, with vehicles becoming more affordable compared to the previous year. Original Equipment Manufacturers (OEMs) are exploring lower-cost vehicle options and showing increased interest in hybrid models. Additionally, vehicle inventories have been replenished. However, certain factors remain unchanged; unemployment rates remain low, interest rates are elevated compared to the past decade, and wages continue to rise.

In terms of supply, our study covered NA Launches & Delays, among other aspects. In response to UAW Detroit 3 contracts, OEMs have raised wages for workers, coinciding with efforts by the UAW to organize at additional factories. Meanwhile, lithium prices have decreased significantly while ocean freight costs have risen. Persistent challenges include costly launch delays as North American production scales up, and concerns persist over the availability of skilled labor, impacting both OEMs and suppliers. Effective cost reduction remains a top priority.

Lastly, our report addressed Tariffs & Chinese Competition and Red Sea & Logistics. Chinese automakers have intensified their global distribution efforts, targeting Europe and Mexico in particular. Hostilities in the Middle East have disrupted trade routes through the Suez Canal. Ongoing concerns involve the Russia-Ukraine conflict, which continues to affect energy and raw material markets. Strategies such as re-shoring and robust risk management are pivotal in shaping supply chain decisions.

We look forward to providing deeper insights on these topics in our upcoming reports and welcome further discussions on these developments.

Seraph is pleased to share the webinar of our quarterly industry report—an insightful discussion about the prevailing trends shaping the automotive sector. During this webinar, Seraph’s Presidents for North America and Europe will provide an outline of the report, accompanied by engaging interactions with fellow leaders who participated in the discussion.

While the race to rebuild the automotive industry is still underway, significant industry-wide challenges continue to obstruct efforts to reach pre-pandemic numbers. Due to Seraph’s expanding presence in Europe, we have incorporated the region into our industry surveys and research.

Seraph is pleased to share the first webinar of our quarterly industry report—an insightful discussion about the prevailing trends shaping the automotive sector. During this webinar, Seraph’s Presidents for North America and Europe will provide an outline of the report, accompanied by engaging interactions with fellow leaders who participated in the discussion.

While the race to rebuild the automotive industry is still underway, significant industry-wide challenges continue to obstruct efforts to reach pre-pandemic numbers. Our previous report focused on North America. Due to Seraph’s expanding presence in Europe, we have incorporated the region into our industry surveys and research.

Rapid changes in the automotive industry compel both OEMs and Suppliers to evolve. Manpower challenges have been significant since the pandemic, and OEMs must now prepare for the pending UAW strike. Industry-wide strides have been made to shift the focus from ICE to EVs, while approaches to shifting China exposure are still mixed. Another shared concern between OEMs and Suppliers is the cost and availability of materials, a direct result of rapid inflation and variable demand.

At Seraph, we often find that during times of intense rapid change, organizations tend to overlook foundational operational principles crucial to long-term success and stability. Taking a step back to focus on these neglected basics is essential for maintaining stable operations, increasing efficiency, and enhancing profitability.

Our NA and EU automotive report explores some of the biggest challenges faced by both OEMs and Suppliers in Q2. It presents data on industry performance and how leaders are addressing these challenges. 

We hope this report proves valuable for you and your company and welcome any feedback for future improvements.

Seraph is pleased to share the first webinar of our quarterly industry report—an insightful discussion about the prevailing trends shaping the automotive sector. During this webinar, Seraph’s Presidents for North America and Europe will provide an outline of the report, accompanied by engaging interactions with fellow leaders who participated in the discussion.

In the ongoing race to rebuild, reengineer, and reinvent the automotive industry, we find ourselves facing significant challenges, but also enormous opportunities.

As a whole, the automotive industry is operating less efficiently than 5 years ago. The current climate is daunting, with pressure mounting from labor shortages, supply chain disruptions, regulatory changes, and strategic shifts, but it’s in these times of uncertainty that companies can truly differentiate themselves. Yes, it’s challenging to adapt, but it’s also essential. Improving efficiency can increase capacity substantially and alleviate much of the pain of growth and change — without needing lots of additional capex.

A phrase often used by Navy SEALs comes to mind: “Slow is smooth and smooth is fast.” 
We Seraph. frequently see companies neglecting crucial tools and tactics in the rush to launch, leaving them running ragged down the line. From quality shortfalls to production crises, major issues crop up time and time again.  

Fortunately, the tools to tackle these issues are straightforward. Tried-and-true strategies such as layered process audits, MDI, PFEPs, Kanban, APQP, gap analysis, visual communication, and other operational excellence tools still hold immense value. They contain wisdom refined over decades, providing a predictable route to improved outcomes, focusing teams on what’s important and bringing order to the chaos. The goal is to serve both indirect labor and operators on the line to ensure that we solve their problems, which we can only do with clear communication and accurate data (ProductionNet).

Our NA automotive report looks back at some of the changing trends in Q1 and forwards to how we can embrace the incoming wave of new work coming our way.

We hope you find some value in it, and we are constantly looking to hear about what will make the next one even better.

If you are waiting for 2019 to return, today is a good day to reevaluate your expectations. Over the last few years Seraph has been in dozens of supplier plants and worked with major OEMs around the globe. Even as the world is changing, many still hold out hope for returning to pre-COVID conditions. It’s only natural to resist change.

But a lot has changed since then, and the evidence supporting a ‘return to normal’ has evaporated. The economy went through a stop-start unlike anything since the world wars. Supply chain shocks forced a reevaluation of risk at the same time as EVs necessitate building new supply chains. For those outside of manufacturing, supply chain stability has become a phrase they wish they never heard, but they have. We now see government policy and consumer expectations that support building an electric, resilient future.

Below is our quarterly report chronicling the current challenges and powerful trends that will determine profitability for 2023 and the market share leaders of the next decade.

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Automotive Industry Trend 2022 Report