The third annual AMS/ABB Automotive Manufacturing Outlook Survey, conducted in October 2024, offers a detailed snapshot of the evolving priorities and pressures shaping the global automotive sector. Over 430 industry professionals participated, with more than half representing OEMs and tier suppliers, providing a data-rich view of current challenges, emerging opportunities, and sentiment around production and sales volumes.
Labour costs and skills shortages have now surpassed supply chain disruption as the foremost manufacturing challenge. This marks a notable shift from the Covid-era, when parts shortages dominated operational concerns. Despite this change in ranking, supply chain disruption remains a significant complexity driver, underscoring its persistent impact even five years after the pandemic began. Rising labour costs have also overtaken raw materials and energy as the primary cost concern for manufacturers, reflecting a tightening talent market and increased wage pressures.
Smart factory initiatives continue to attract attention, with productivity gains identified as the leading benefit. Yet, high upfront investment remains the most cited obstacle to adoption. For many respondents, the promise of efficiency and automation is tempered by capital expenditure realities, especially in an environment where cost control has become a central strategic focus.
Trade disputes emerged as a critical threat to investment, sourcing, and access to essential materials. Recent tariff announcements by U.S. President Trump have sparked a trade war, signaling a shift toward protectionism after decades of globalization. Automotive supply chains, which are deeply integrated across borders, face the risk of severe disruption. More than half of survey participants indicated that such disputes would significantly affect their material availability, investment strategies, and sourcing approaches.
Uncertainty in the market is driving cost-cutting as the dominant corporate response. Difficulty in planning, cancellation or delay of plant investments, and postponement of new model launches follow closely behind. This aligns with broader industry patterns of reduced profitability, declining market share, and plant closures. The survey’s findings reinforce that many manufacturers are in a defensive posture, trimming expenses to weather the combined pressures of tariffs, trade instability, and fluctuating demand.
Interestingly, the overall production and sales outlook for 2024 is more positive than in the previous year’s survey. The industry has transitioned from the production-constrained conditions of the pandemic era back to a demand-constrained environment, where market appetite dictates output rather than supply limitations. This return to a more familiar dynamic offers some relief, but also demands sharper competition for consumer attention and loyalty.
Beyond immediate operational concerns, the survey also probed attitudes toward electrification, alternative fuels, and sustainable manufacturing. Respondents shared perspectives on EV production targets, barriers to achieving full electrification, and consumer constraints affecting adoption. Commercial vehicle powertrain trends were also explored, alongside the feasibility of implementing greener manufacturing processes. These topics reveal the dual pressures of meeting regulatory and environmental goals while maintaining profitability and operational resilience.
The data underscores a complex interplay between cost structures, technological investment, and geopolitical forces. For engineers and technologists, the findings highlight the importance of adaptive manufacturing strategies, workforce development, and supply chain diversification. As automation and robotics continue to advance, the challenge will be balancing capital investment with the need for agility in a market where both policy shifts and consumer preferences can rapidly alter the competitive landscape.