The Australian automotive sector will still contribute a massive $37.1 billion to the economy (2.2 per cent of GDP) beyond the end of local car manufacturing in October.
And there are currently a record 27,000 auto job vacancies waiting to filled, upped to a staggering 35,000 vacancies in the sector within a year — contrary to generally-held views.
This is in addition to the existing 380,000 active auto industry employees here, spread across 70,000 businesses.
These are core claims from a new report into the industry commissioned by the Motor Trades Association of Australia (MTAA), conducted with more than 1000 automotive businesses.
The report, called Directions in Australia’s Automotive Industry, purports to be “the most comprehensive analysis ever into the state of the motoring industry”. It was produced by the Victorian Automobile Chamber of Commerce (VACC) Research Unit.
It follows in the footsteps of recommendations made by a now dated Senate Inquiry in December 2015, to address critical skills shortages currently “crippling” large parts of the automotive sector.
The MTAA fears that unless there’s prompt action, "the huge amount of revenue the industry generates for the economy would be placed at risk".
Other key findings from the report are:
- Automotive repair and maintenance business accounts for 54 per cent of the industry, with retailing at 8.3 per cent in comparison. Vehicle parts and manufacturing accounts for 4.4 per cent
- 96.5 per cent of automotive businesses are small and family run enterprises
- 41.9 per cent of auto businesses are run by sole proprietors, while 54.6 per cent employ 1-19 employees
- The average age of Australia’s vehicle fleet is 10.1 years
- 800,000 registered vehicles (excluding motorcycles) were scrapped between 2015 and 2016
- Car dealers operate on 2.6 percent profit margins
- Profit margins for repair/maintenance businesses in 2015/16 was 12.2 percent, fuel retailing was 2.4 per cent
- There are 69 vehicle marques operating in Australia, amongst the most in the world
- Electric vehicles make up 0.01 percent of the nation’s fleet
Attending the launch was senator Nick Xenophon.
“There seems to be an attitude in government that the auto sector will die a slow death with the impending closure of Toyota and Holden’s manufacturing operations in October,” Xenophon said.
“This couldn’t be further from the truth. More than 91 per cent of Australian industries are using automotive goods and services undertaken by businesses, many of them family-run.”
“… With SA’s Holden workers looking for jobs there isn’t a better time to retrain them in other areas of the automotive industry,” he added.
"The jobs are there but the government has failed to heed repeated warnings to act to address these shortages.”
Senator Xenophon said the chronic job shortages was already being felt by customers who were being forced to wait for longer periods to have their vehicles serviced and repaired.
“The auto industry is vital to this country but it seems the Government just doesn’t get it and needs a jump start to get into gear and act swiftly.”
Adding to this was the VACC executive director, Geoff Gwilym, who said a key finding in the report is that Australia’s automotive industry is here to stay.
“Passenger vehicle manufacturing will cease in October this year, but that is, and always has been, a small component of the entire automotive industry, which is still very robust with 69,365 businesses operating across the country,” he said.
Listen to our podcast snippet from our interview with Gwilym below.
Listen to the CarAdvice team talk to VACC Executive Director Geoff Gwilym below, and catch more like this at caradvice.com/podcast.