Capricorn has released its 2026 State of the Nation report, revealing an automotive aftermarket industry that continues to push forward, but with growing pressure from rising costs and persistent staffing shortages.
The report shows that cost-of-living pressure is the number one challenge facing workshops, with 49% of businesses citing price-sensitive customers and cost pressure as a major issue. Staffing remains a persistent challenge, with 45% of businesses report being unable to find good staff.
Despite these pressures, 72% of workshops still plan to grow or improve profitability over the next 12 months.
Capricorn Group CEO Brad Gannon said the findings reflect an industry adapting to a changing operating environment.
“The 2026 State of the Nation report shows workshops are still pushing ahead, but they’re doing it under even more pressure than we’ve seen in recent years.”
“We’re seeing businesses increase their focus on improving efficiency, protecting profitability and making sure their operations are as strong as possible,”
“Retaining customers is top of mind right now with 71% of businesses pointing to this as a driver of success,” Brad said.
The report reveals the ongoing impact of staffing shortages on workshop operations, with many businesses experiencing reduced capacity, longer turnaround times and increased pressure on existing teams.
“Workforce shortages continue to be one of the biggest constraints on workshops,” Brad said.
“It impacts everything from productivity to customer service, and it’s placing real pressure on business owners and their teams.”
“Almost a quarter of businesses reported turning away work due to being understaffed, with 21% saying this issue was increasing the workload for other staff in the business”, said Brad.
The findings contribute to Capricorn's engagement with industry, government and other key stakeholders. Through the State of the Nation research, Capricorn uses Member feedback to identify emerging issues and ensure the experiences of automotive businesses help inform policy discussions.
Capricorn’s recent discussions with government and industry stakeholders have focused on improving workforce participation, apprenticeship pathways and access to skilled migrant workers for small businesses.
Confidence across the sector has softened slightly, with the Capricorn Confidence Index easing to 70.5 in 2026, down from 72.5 in 2025. However, Brad said this reflects caution rather than pessimism.
“The industry hasn’t lost confidence, it’s just becoming more realistic about the market conditions,” Brad said.
“Long-term confidence remains stable, but businesses are taking a more measured approach in the short term.”
“This industry has always been resilient, and we will continue to adapt to ensure we can meet the needs of our customers,” Brad said.
Capricorn’s State of the Nation 2026 report is based on responses from 989 Australian automotive businesses and 159 apprentices. Now in its seventh year, the report provides a comprehensive snapshot of the challenges, performance and future direction of the sector.
About Capricorn Society
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 32,000 Members across Australia and New Zealand, from national franchises to local family workshops. Last year, Capricorn facilitated over $3.7bn in sales with our Preferred Suppliers.
At Capricorn, we're about more than just products and services, we’re about building a connected and supported community.
More information can be found here: State of the Nation | Capricorn Society
Media Contact:
Niall Naghten | +61 (0)466 276 7591 | media@capricorn.coop
Note to editors:
Brad Gannon, CEO, is available for interview. Case studies and vision also available.