In the passage, Tolkien challenges the perception of modernity that equates the existence of motor cars with greater reality than the fantastical beings of his creation, such as centaurs and dragons. He finds it absurd that people would view man-made constructs as more "alive" than natural elements like horses or trees. This reflects his satirical stance against those who dismiss his imaginative world as mere escapism.
Tolkien emphasizes the superficiality of industrial creations, contrasting them with the depth and wonder of nature and mythology. By portraying factory chimneys as "poor obsolete things," he invites readers to reconsider what constitutes true reality and vitality, defending his literary work as a legitimate exploration of a rich, fantastical realm compared to the mundane aspects of modern life.