Report: Oz Auto Sector Will Survive Automakers’ Exit

A new report into the state of the Australian automotive industry says it is time to stop the wringing of hands over the end of local vehicle assembly and to set the record straight.

Auto Skills Australia says vehicle manufacturing is only 13% of the country’s auto industry, and the other 87% – sales, service and repairs – is brimming with opportunity.

The government-funded group, responsible for the development and maintenance of nationally accredited automotive-training qualifications, says in its 2014 Environmental Scan report the industry is continuing to grow.

“Reductions in employment within the motor-vehicle and parts-manufacturing sector have been more than compensated (for) by employment growth within other sectors, particularly motor-vehicle and parts wholesaling and automotive repair and maintenance,” its report says.

Employment within the industry is estimated at 361,187 for 2012-2013, an increase of 4,132 over 2011-2012.

“Major skill shortages are prevalent within automotive servicing and repairs,” it says.

Labor-force modeling of skills supply and demand by the ASA indicates a national shortage of about 21,800 skilled people within the automotive industry.

Vehicle mechanical and vehicle body trades account for the bulk of this, with national shortages of 7,420 light-vehicle mechanics, 1,869 diesel mechanics, 4,294 panel beaters and 2,663 vehicle painters.

The ASA report says while the decisions by Ford, GM Holden and Toyota to cease manufacturing operations will remake the automotive industry, the sales, service and repairs sectors comprised the largest portion of the industry even before the announcements.

“Structural change is also affecting the automotive service and repair sectors, but savvy business operators who invest in capital equipment and workforce development will be well poised to overcome adverse market conditions,” the report says.

There were 67,260 businesses within the industry as of June 2012, a drop of 812 in a year.

“Small businesses, which comprise approximately 94% of the automotive industry, are facing severe pressures and are closing in increased numbers, particularly sole-proprietor and partnership businesses,” the report says. “Within this cohort, vehicle-body-repair businesses are closing in the greatest numbers, accounting for one-third of all closures.”

The ASA says massive structural changes and business rationalization are reshaping the non-manufacturing sector of Australia’s automotive industry. Despite these pressures and developments, the industry as a whole has shown resilience and continues to be a key contributor to growth and employment within the national economy.

“With a national car fleet of 17.2 million vehicles that is growing by more than 400,000 a year, future career opportunities abound for those willing to claim a stake in the sales, service, repair and maintenance sectors,” it says.