Australasia’s largest automotive cooperative Capricorn has put together an in-depth snapshot report of the automotive industry in 2020 through the eyes of its 1,500 Member businesses.

The Capricorn State of the Nation 2020 report is the first in what will be an annual report that reflects the feelings, views and outlook of automotive businesses on the issues that they believe will impact the industry going forward.

The report also provides a summary of how Capricorn Members fared in the last 12 months compared to neighbouring businesses.

2020 has been without a doubt one of the most difficult years many businesses owners across all industries have faced, with businesses in the automotive industry clearly not immune to the struggles that persisted due to COVID-19, according to the snapshot report.

However, the industry has also faced numerous additional challenges outside of COVID-19, which has also been made clear through the report.

One of the biggest challenges reported by Capricorn Members in the report was the rapid rate of technological advancement being witnessed in the industry.

With technology constantly evolving to keep up with the ever-evolving vehicle, many businesses are struggling to keep up with the knowledge of how to operate the machinery, machinery that was not necessarily around when workers were undertaking their apprenticeships.

This also brings up the issue of the aging workforce currently being witnessed in the industry, with Capricorn Members reporting that they have been employed in the industry for 24 years on average.

The aging workforce has also brought about the issue of succession planning.

The automotive industry is currently experiencing a shortage of young people entering the trade, resulting in a lack of qualified workers entering the field.

As noted by Capricorn Group CEO David Fraser, the latest technology is crucial in the workplace if an automotive business is to survive the current landscape of the industry.

“If Members fail to keep up with technology, they will eventually go out of business,” said Fraser. “Keeping up with technology is critical for our Members’ future success.”

51 per cent of Members signalled that they were worried about the impact of evolving technology on the automotive landscape.

Another challenge that was put forward by Capricorn Members was the growing challenge of going up against longer warranties awarded by dealerships, which is leading to a sharp decline in turnover.

“Sixty per cent of all cars under four years have a service agreement,” said Fraser.

“This means the OEM dealers have five to six years to build a relationship with a customer or to create programs or campaigns that block out the non-dealer workshop.”

This issue has led to a decline in the customer base of many Members, who also have to deal with continually tightening margins that are affecting the bottom lines of businesses.

Numerous businesses also flagged the growing divide between work-life balance as a key factor that was affecting their business. Longer hours to fit the needs of customers and create a higher turnover of repairs are fast becoming the norm. Finding a better balance is crucial, not only in supporting current employees in the industry but also in influencing the next wave of professionals to consider a career in the automotive industry.

While many challenges appear to be in front of businesses in the automotive industry as we move into the future, many businesses still reported a sense of optimism for the industry’s future.

Popular reasons for optimism from businesses included a strong sense of loyalty from an entrenched customer base, as well as continued business growth and the strong history and experience behind the business.

Fraser said that the State of the Nation report would prove to be a valuable resource for Capricorn Members and businesses in the wider automotive community, with the report allowing businesses to assess their own performance and future outlook against the industry to identify areas where they are excelling or in need of improvement.

“This is a relevant report on the industry, by the industry. This is not assumed data; it is real information from real Capricorn Members across Australia and New Zealand. I encourage Members to benchmark their own business performance compared to their automotive aftermarket industry colleagues. It is not a report to leave on a shelf. It’s a resource that will guide us all towards a more successful future.

“If there is one major factor that stands out from the findings of this report, it is the optimism of Capricorn Members for the future. This is a future that we will be directly alongside our Members for – because as the success of our cooperative has shown across nearly five decades, we are always stronger together.”

To view the Capricorn State of the Nation 2020 report, click here.

24 August 2020