Jim Farley, Ford’s CEO, said on January 16, 2026 that the auto industry is moving away from globalization. He cited tariffs, political tensions, and protectionist policies. Basically, Ford is saying build closer to your key markets or pay the cost.
It makes sense if you think about recent disruptions. The pandemic, chip shortages, and trade disputes all showed how fragile global supply chains can be. Companies can no longer rely on moving parts halfway across the world.
Regional Production Is the New Normal
For automakers, that means local or regional factories. Costs go up, maybe 20 to 30 percent, but the payoff is fewer surprises. Toyota and Hyundai have already been expanding North American plants. Ford itself is following suit.
For suppliers, it is trickier. Companies that export globally may have to rethink everything. Some will need to invest in local operations, others will form joint ventures. The old model of shipping everything from one hub does not work anymore.
EV Supply Chains Feel the Pressure
Electric vehicles are hit first. Batteries are still made mostly in Asia. Exporting them to the U.S. now comes with hurdles. Some makers like CATL and LG Energy might build plants in the U.S. or partner with American firms. Jobs are the key. U.S. rules allow foreign companies if they create local employment.
This could split EV and ICE supply chains. Different rules, different costs, different sourcing. Asian suppliers will need to adjust. No more one-size-fits-all global platform.
Engineering, Materials, and R&D
Reshoring changes how cars are designed. Bills of materials are no longer universal. Lightweighting, cost optimization, even battery integration may change depending on what is available locally. R&D teams will have to juggle multiple variants, which is fun but more work.
Automation Becomes Critical
Labor costs are higher in local plants. Expect more automation. Robotics suppliers like Fanuc and Yaskawa could see more demand. Predictive logistics and AI inventory tools will probably become standard. Plants with digital twins for quality checks will be the ones that stay competitive.
What This Means Strategically
For Asian suppliers, it is a mixed bag. There are risks such as higher costs, fragmented networks, and capital requirements. But there are also opportunities for those who partner with local factories or invest regionally. The companies that adapt fastest may gain a big edge.
Globalization is not dead overnight, but it is clearly fading. Resilience and flexibility matter more than cost efficiency now.
