DETROIT, MI. (WOWO) Michigan’s $348 billion auto industry is at a “critical inflection point,” facing growing competition from southern U.S. states and international manufacturers, according to a new report from statewide industry group MichAuto.

Glenn Stevens, MichAuto executive director, said the state must act decisively in 2026 to retain jobs, engineering, and production. “We are at an inflection point like we’ve never seen before,” Stevens said. “We have to make changes and invest in innovation to protect our signature industry and our economy as a whole.”

The report highlights several challenges: shifts in electric vehicle production, rising global competition, and new manufacturing centers in southern states creating a “battery belt.” Combined with automation and changing market dynamics, MichAuto says Michigan cannot rely solely on its automotive legacy.

Ford, General Motors, and Stellantis have all adjusted production strategies in response to federal policy changes and market forces. Ford recently announced a $19 billion adjustment in EV capacity to shift focus to gas-powered vehicles and energy storage systems according to Bridge Michigan.

MichAuto recommends policy and economic actions to strengthen the state’s auto sector:

• Increase research and development investment, leveraging Michigan’s position as a top state for private auto R&D

• Prioritize workforce development, including vocational training and bachelor’s degree pipelines to replace aging workers

• Improve the business climate through regulatory and tax reforms to maintain competitiveness

• Implement long-term economic incentives to retain manufacturing and innovation

• Support industry transition to new technologies and advanced manufacturing processes

Michigan’s auto industry currently accounts for roughly 20% of state jobs, with an $83 billion payroll. However, U.S. vehicle production trends show the Detroit Three’s market share fell from 36.1% in 2023 to 34.2% in 2024. MichAuto expects federal policy changes in 2026 may help reverse this slide.

The report comes amid broader concerns about Michigan’s economic trajectory. Analysts warn of slow household income growth, flat high-wage job growth, and an aging workforce limiting overall state prosperity.

MichAuto plans to release a roadmap for policy, economic development, and talent attraction throughout 2026 to strengthen Michigan’s auto sector and ensure its continued role as a global industry leader.