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AUTOMOTIVE INDUSTRY Change Driver Report 2007 Executive Summary This 3rd Edition Report focuses on the review of drivers of change in the Automotive Industry and their impact on sector training needs and provision that are at variance with the previous Report. The combined effects of global supply and demand, the introduction of new technology and government legislation will influence business practices and skill demand in the key sectors of automotive manufacturing and retail over the next 5 years. The world’s vehicle population is expected to double in the next 15 years to 1.2 billion vehicles with the Asia Pacific Region leading the way with a projected 46% of incremental volume. Passenger Motor Vehicle Manufacturers forecast the demise of the industry over the next ten years in the face of rising competition, in particular, the small car market. Domestic sales have slumped from 70 per cent of market in 1998 to 20 per cent. This forecast comes at a time when the Howard Government is preparing a new industry blueprint for release in 2007. Manufacturers blame the combined effects of:
Australian PMV manufacturer’s skill demand will reflect new vehicle model production schedules based on a 5 years cycle (next cycle 2010). Demand will focus mainly on existing worker production assembly and team leader skills to meet the introduction of new vehicle technology, changing production processes and plant efficiency plans. Demand for new worker skills training will be dependent on local demand and new export markets taking into account ageing worker attrition. A shortage of licensed maintenance electricians at Certificate III with expertise in new technology production machinery installation and maintenance has emerged. A positive sales outlook leading to employment growth and increased training demand in the truck manufacturing and assembly sector reflects customer demand for increased road transport capacity and improved logistics.
Employment opportunity and skill needs in the Automotive Retail, Services & Repair (RS&R) Sector, over the next 5 years, will reflect growth in new vehicle sales and registrations. Current indicators are that demand for trade and specialist skills training through apprenticeship and traineeships combined with flexibility in the selection of skills to meet business needs will remain high. This projected growth however; must be taken into account with the effects of petrol pricing, skill shortages and the long-term effects of drought conditions, particularly in regional and rural Victoria. Road transport and heavy earth moving, plant and construction equipment sales growth reflect the Australian resource and logistics boom however; growth is hampered by a continuing world-wide shortage of trade mechanics with field diagnostics and repair skills. Demand for existing workers’ skills training is projected to increase with the introduction of new vehicle technologies and government legislation in such areas as alternative fuels, vehicle emissions, ozone depletion (refrigerants), work safety and environmental controls. Boating Industry skill needs will reflect growth in new boat sales and registrations as a flow-on from “Baby Boomer” retirements. Demand for trade skills training through apprenticeships and traineeships combined with flexibility in the selection of skills to meet business needs will increase. Bicycle Industry indicators are that demand for skills training through school based traineeships have the potential to increase. Any increase in training demand however; is dependent on industry promotion to the community and bicycle retailers.
Note: * incorporating automotive aftermarket, boating, bicycle The availability of skilled labour is a key factor to industry planning for the future. Trade skill shortages and strategies to address identified shortages influence the industry’s response to drivers of change. The automotive industry continues to rely on traditional apprenticeships as the foundation for skills attainment, however in an industry predominantly small business; future skill needs should not be based on current business employment capacity particularly at a time when up to 45% of apprentices fail to complete their training contract. An alternative trade skill pathway is recommended for development by Automotive Training Victoria not unlike engineering degree studies. The pathway to combine:
The capacity of Registered Training Organisations to address skill needs over the medium to long term is critical to meet changing demand brought about by drivers of change and industry’s response to those drivers, particularly in regions experiencing skill shortages. Quality partnership arrangements between training organisations and business (retail and manufacturing) that are designed to address business needs within a qualification framework is critical as is the future coordinating role of the Automotive Centre of Excellence. Changes in technology and industry work practices will impact significantly on TAFE teacher professional development and new teacher training. The profile of private Registered Training Organisations (RTO), in particular specialist training centres, will be more prominent as manufacturers and retail businesses seek alternative options for training of existing workers and apprentices in trade skills, advanced technical and production processes to reflect new technologies. A review of private RTO access to government funding, particularly in high demand skills is recommended. To obtain the complete Change Driver Report 2007, contact ATV.
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