This year's State of the Nation report found that while workforce shortages remain a major challenge, cost-of-living pressures have become the number one concern for automotive businesses.
Based on feedback from 989 Capricorn Members and 159 apprentices across Australia, the 2026 report paints a picture of an industry that remains resilient but is adjusting to a changing economic landscape. The findings also show that workshop owners are changing the way they think about growth.
On 3 September 2026, Capricorn hosted a special launch event at EOS by SkyCity in Adelaide. With the support of Steve Georganas MP, Federal Member for Adelaide and MTA SA/NT, Capricorn officially launched the report alongside select Members, Preferred Suppliers, industry partners, government representatives and key stakeholders.
Customers are feeling the squeeze
For the first time in recent years, cost-of-living pressures have overtaken staffing concerns as the number one challenge facing automotive businesses.
Nearly half of all businesses surveyed identified price-sensitive customers and broader cost-of-living pressures as one of their biggest concerns. With household budgets under pressure, many customers are taking a closer look at where and how they spend their money.
That doesn't mean demand has disappeared. Australians still rely heavily on their vehicles to get to work, run businesses and support their families. But it does mean Members are reporting customers cancelling scheduled maintenance and becoming more conscious of how much things costs.
At the same time, workshop owners continue to face rising operating expenses of their own, creating a challenging balancing act between maintaining profitability and delivering value for customers.
The skills shortage hasn't gone away
Workforce shortages remain one of the industry's biggest long-term challenges with 43% of businesses experiencing staffing shortages. While conditions have eased slightly compared to previous years, the issue continues to affect day-to-day operations
The change this year is that cost pressures have moved further into the spotlight.
While workshops still need skilled technicians, apprentices and support staff, softer economic conditions have shifted some attention towards managing expenses and protecting margins. The skills shortage remains a significant issue; however, many businesses are now balancing workforce challenges with increasing pressure from price-sensitive customers.
The report also highlighted growing pressure on apprenticeship pathways, with fewer businesses indicating they are highly likely to take on an apprentice than in previous years.
For an industry already searching for skilled workers, developing the next generation remains a critical priority.
A different approach to growth
Despite the challenges, confidence across the industry remains remarkably strong. The Capricorn Confidence Index remained above 70 in 2026, while 72 per cent of businesses said they still have plans to grow or improve profitability over the next 12 months.
What's changing is the way businesses define growth. Rather than pursuing expansion, many workshops are focusing on running more efficient operations, improving profit margins, reducing unnecessary costs and strengthening relationships with existing customers.
Customer retention emerged as the single most important factor when it comes to running a successful automotive business, highlighting the value of long-term trust and loyalty in a competitive market.
In many ways, the industry's focus is shifting from expansion to sustainability.
Workshops are concentrating on protecting profitability, investing in capability and building stronger businesses from the inside out.
Advocating for the industry and supporting Members
One of the key reasons Capricorn produces the State of the Nation report is to ensure the experiences of Members are reflected in policy discussions and business decisions. The 2026 report identified several opportunities that Capricorn is using to inform discussions with industry and the Federal Government about the future of the sector. These include:
- reducing barriers to accessing skilled migrant workers,
- strengthening incentives and support for apprenticeship pathways and
- developing a campaign to help widen participation in the industry by better connecting with underrepresented groups.
In 2025 Capricorn acquired Australian Skilled Migration as a direct response to what Members told us through the State of the Nation research.
Looking ahead
Australian automotive businesses continue to demonstrate resilience, adaptability and a willingness to evolve. They're embracing new technology, investing in training where possible and finding practical ways to navigate a more complex operating environment.
The industry's key challenges are about balancing rising costs, developing skilled people and building businesses that can thrive in a changing world.
If this year's State of the Nation report tells us anything, it's that while conditions may be changing, Australia's automotive industry remains focused on what it has always done best: adapting, innovating and keeping the country moving.
We’d like to thank everyone that participated in this year’s State of the Nation. The responses we received from so many Members and apprentices throughout Australia are informing important discussions about the future of our industry.
