Automotive sector running on empty – report confirms critical skills shortage reducing productivity

The Capricorn State of the Nation report released by Capricorn – Australia’s largest automotive member group with 25,000 small business Members nationwide – confirms that the critical skills shortage in the automotive sector is reducing productivity with a quarter of businesses across mechanical, auto electrical, collision repair, mobile mechanic and tyre and suspension reporting reduced productivity due to the skills shortage.

07 October 2025
Capricorn Member using a microscope to inspect electronic components in a well-equipped automotive workshop

Capricorn reports the findings of small businesses from across the sector who average a $1.2 million turnover, with 97 per cent employing less than 19 staff. Other productivity related findings of concern include 27 per cent of workshops having to turn away work due to not having enough staff and 28 per cent reporting longer wait times for customers on vehicle repairs due to not having the workforce to meet demand.

Capricorn Group Chief Executive Officer Brad Gannon, says that “the skills crisis has been the top concern of small businesses since the State of the Nation report’s inception six years ago.”

“Workshops have fought through COVID, supply chain challenges, implementing single touch payroll and are managing cost of living pressures from customers. They have faced considerable economic pressure and continue to do so but nothing has been as challenging as the skills shortage.”

“Nearly half of small businesses tell us they are facing pressure from customers about rising costs but are unable to change the way they work due to lack of qualified staff.”

“We are one of the most innovative industries in the country, keeping the nation’s key economic sectors across mining, fleet, agriculture, freight and transport moving. The automotive sector is resilient and even with challenges plan for growth. So many Australian customers rely on their local workshop and the difficulties these small businesses face comes at the expense of their mental health and work life balance.”

“Our insights show that three quarters of businesses are planning to grow and seek ways to improve productivity and profitability, but they can’t do it without skilled labour.”

Gannon is calling on policymakers to view the automotive sector as a critical industry, which is in desperate need of attention and a clear roadmap for action.

“Supporting workforce development, promoting trades in schools, and helping small businesses innovate is needed to make a real difference.”

“We have a brilliant industry partnership with a united group of leaders across the $68 billion automotive sector. Capricorn, together with the Motor Trade bodies, regularly hosts careers expos connecting industry directly with young people who may be assessing their career options.”

“Our businesses are proud to be part of the automotive sector. Together, we hope to show young people how exciting this industry is and consider it as a future career. But more needs to be done in promoting the industry, showcasing the technology and encouraging people to be a part of it.”

Gannon says the industry is doing everything it can to build a workforce for the future.

“Nearly half of business owners plan to employ an apprentice this year and 38 per cent of them say that they are highly likely to hire an apprentice in the future, indicating a real long-term commitment to building the next generation.”

“Our work in attracting women to the industry to fulfil this growth has also been met with good results, with the industry doubling the number of female apprentices in automotive trades roles.”

“However, we are concerned that there are apprentice positions across the sector, across the country, that still can’t be filled. This added to nearly 40 per cent of the industry struggling to find skilled staff shows just how widespread this challenge is."

The State of the Nation report this year also included results from a survey about the sector’s capability and views on transitioning to electric vehicles.

“There is anecdotal evidence that the move towards technology first vehicles is enticing young people into an automotive career. We need to be capitilising on this and highlighting future opportunities.”

The survey reports that two thirds of workshops are already servicing electric vehicles, however most of this relates to hybrids, and demand is still low with the average number of electric vehicles serviced per month just under five vehicles.

Gannon says the industry is supportive of the continued adoption of new technologies but equally are tentative about the adoption of electric vehicles.

“Our report demonstrated that only 16 per cent of businesses feel prepared for an increase in servicing electric vehicles. We encourage regulators and policymakers to read the data, recognise the commitment of the industry in upskilling, but also recognise that transition needs to be done in consultation.”

The full 2025 Capricorn State of the Nation report can be accessed at cap.coop/sotn.

2025 State of the Nation key statistics

Business growth strategies and focus areas

Automotive businesses are prioritizing growth through efficiency and profitability improvements.

  • 77% of workshop owners plan to grow or improve profitability over the next 12 months
  • Key focus areas include improving business efficiency (66%), increasing profit margins (56%), and reducing operational costs (48%)
  • Average turnover for 2025 is reported at $1.2 million

Persistent challenges facing the industry

  • Finding and retaining skilled staff remains the top concern for 53% of Members
  • 47% of Members struggle with maintaining a healthy work-life balance
  • Cost-of-living pressures are affecting customer servicing habits for 42% of businesses

Skills shortage and its impact

  • 48% of businesses report being impacted by the skills shortage, with 10% having unfilled positions
  • 38% are struggling to find qualified workers, limiting business capacity and customer service
  • The perception of the automotive sector as less attractive than other industries contributes to recruitment challenges

Apprenticeships: key to workforce development

Apprenticeships are essential for addressing the skills shortage in the automotive industry and fostering future talent.

  • By 2025, 44% of business owners plan to employ an apprentice
  • 38% of business owners are highly likely to hire apprentices in the future, indicating a long-term commitment
  • Female apprentices have doubled from 16% to 32% in just one year, promoting diversity in the workforce
  • 80% of apprentices feel optimistic about their future in the industry, citing job security and career growth as key factors

Challenges faced by apprentices

Apprentices encounter various challenges that reflect broader industry concerns.

  • 37% of apprentices cite low pay rates as a significant issue
  • 16% are concerned about adapting to new technologies like electric vehicles (EVs)
  • 11% struggle with finding qualified staff and maintaining a healthy work-life balance.
  • Limited exposure to modern vehicle systems highlights the need for updated training

Emerging vehicle technologies impact

The automotive industry is adapting to the rise of electric and hybrid vehicles, reshaping service demands.

  • 66% of workshop owners currently service EVs, with expectations for hybrids to account for 31% of total workload in the next decade
  • The average number of EVs serviced per month has increased from 2.6 in 2021 to 4.9 in 2025
  • Only 16% of business owners feel prepared for an increase in battery electric vehicles (BEVs), indicating a need for better training and resources

Women’s growing role in automotive

The automotive industry is becoming more inclusive, with increasing female representation in various roles.

  • Women make up 22% of the total workforce in the automotive sector
  • Female representation in trade roles, such as qualified mechanics, has risen from 11% to 16%
  • 52% of businesses now employ female estimators, up from 21% in 2024
  • 94% of businesses report having at least one woman in administrative roles

Confidence Index and business outlook

The Capricorn Confidence Index indicates a steady outlook for the automotive industry.

  • The index rose to 72.5 in 2025, reflecting a positive sentiment despite challenges
  • 48% of workshops reported high confidence in the industry's future

Find out more at cap.coop/sotn.

For further information contact media@capricorn.coop or +61 455 731 955.

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About Capricorn

Capricorn is one of Australia and New Zealand’s largest and most dynamic Member-owned organisations. Since 1974, we’ve provided our Members with financial and business solutions to make running a business easier. Our flagship Trade Account offers instant credit with over 2,000 Preferred Suppliers, simplified monthly expenses, and a generous Rewards program. 

We have a strong foundation in the automotive and machinery aftermarkets. Our vibrant Community includes over 30,000 Members across Australia and New Zealand, from national franchises to your local family workshop. This year, Capricorn has facilitated almost $4 billion in sales with our Preferred Suppliers. 

At Capricorn, we're about more than just products and services. We work hard to ensure that our Members, Preferred Suppliers and People feel like they're part of something bigger, a Community which is connected and supported to make a difference, while having some fun along the way!