EXPLORING INDUSTRY TRENDS

ACA Research takes a look at the latest trends in the Australian automotive space

The past five years have seen significant change in the Australian automotive industry.
From a new vehicle perspective, we have seen brands entering the market, and some much-loved brands exiting.
Technologies have changed, with features such as ADAS becoming common-place, and vehicle servicing has continued its progression to a technology-led process.
While these trends are exciting and play an important role in shaping the future of the industry, focusing too much on them can sometimes result in losing track of the fundamentals of automotive servicing.
Going back to basics, the last five years saw the Australian car parc increase from 16.8m to 18.1m vehicles, as an additional 1.3 million passenger and light commercial vehicles came on road.
This increase in the market led to significant growth in the annual servicing task, increasing the demand for both workshops and technicians.
Pleasingly, the aftermarket has clearly risen to this challenge, with 1,700 additional workshops operating now compared to five years ago.

Figure One. Source: ABS Counts of Australian Businesses

With 24,600 aftermarket workshops now operating around the country, this provides jobs for almost 66,000 technicians and administrative staff.
Despite this, we know that resourcing remains a challenge, with many of them actively recruiting for trained technicians. Furthermore, automotive apprenticeship completions are unsteady, which suggests this will continue to remain an issue for the foreseeable future.
Our data supports this, suggesting that this trend is only going to accelerate, with the AAAA Critical Industry Issues Report forecasting growth of almost 10 percent in the Australian passenger and light commercial vehicle car parc over the next five years.
Even though new vehicle sales have been inconsistent off the back of COVID-19 lockdowns and ongoing global new vehicle supply shortages, reduced vehicle scrappage means annual growth rates have held largely constant as consumers and businesses put off replacing existing vehicles.
From an aftermarket perspective, this also means the average vehicle is getting older, which should shift more of the servicing task away from dealerships and into independent or chain workshops.

Figure Two. Source: ABS Census of Motor Vehicles

In addition to this, by mapping supply and demand against each other, we can project that servicing these additional 1.6m vehicles in 2025 will require an additional 2,300 workshops on top of those currently operating, staffed by 5,300 technicians and support staff. While we know that many chain workshop operators are targeting growth, achieving this outcome will require a concerted effort across the industry.

Figure Three. Source: ABS Census of Motor Vehicles, ABS Counts of Australian Businesses, ABS Census of Population and Housing.

This projected demand is concerning given workshops already cite the shortage of trained technicians as one of the most significant challenges they face.
Ultimately, while international borders will re-open and workshops will again be able to source skilled technicians from overseas, migration caps mean this strategy cannot fully solve the problem.
This highlights the importance of the work being undertaken by independent and chain workshops, training organisations, and industry bodies such as the AAAA to increase the appeal and consideration of a career as an automotive technician, building the workforce of tomorrow, today.

This column was prepared for AAA Magazine by ACA Research, our partners in the AAAA Aftermarket Dashboard which is delivered to AAAA members each quarter.

For more information, visit www.acaresearch.com.au or contact Ben Selwyn on bselwyn@acaresearch.com.au