Conversion of the automotive industry: How employment is changing

The employment structure of the automotive industry is facing fundamental change. Demographic change and decarbonisation are the two central drivers. Our study “Employment perspectives in the automotive industry” on behalf of the automotive trade association VDA, demonstrates what the automotive industry needs to prepare for:

• Skilled-worker bottlenecks are a problem but not in all professions. Professions with a surplus of workers are the exception.
• Up to the year 2035, labour supply in the sector will decline relative to demographic factors by 6.3%, or every 16th job in today’s terms.
• The demand for workers is decreasing due to electrification. How large the decline will be remains unsure. Should the trend seen between 2019 and 2023 continue up to the year 2035 the result would be almost 190,000 less people employed in the automotive industry than in 2019 - a quarter of them have already been lost (46,000 employed persons).

Too many or too few employees? Here’s what it looks like in the professions

A worker and skilled-worker shortage on the one hand and a simultaneous surplus of workers on the other are both to be expected:

• In some of the 140 occupation groups examined a profession’s increasing relevance meets a decreasing supply, i.e., in machine engineering. Here, increasing skilled-worked bottlenecks are possible. 
• In other professions, above all, metal professions, a decreasing supply coincides with sinking relevance. In these professions, the automotive industry has an opportunity to achieve employment reduction by foregoing new hires upon retirement. These professional groups comprise the majority of today’s employment.
• In some professions with increasing relevance, we expect supply to increase in the future, due to the large numbers of junior employees and the favourable age structure. This is the case in computer science or mechatronics and is positive in terms of securing skilled workers.
• In professions in the areas of business control and business management, which are losing relevance, there is increasing supply, or a surplus of workers.

Bottlenecks in individual professions can be fundamentally decreased by workers changing over from other sectors. In the professions where a high proportion of all employees are already employed in the automotive industry, workers who could potentially change sectors are not available on a large scale. 

Foundations for measures to ensure skilled-worker supply  

Firstly, the results show where action is required at individual profession level. The process reveals a multi-faceted picture with various challenges. The study can serve as an important basis for the introduction of measures that can be used to secure the skilled-worker situation. This applies to the automotive industry but equally other sectors, where we have conducted similar analyses.

Our approach

The study was divided into three stages: 

1. Ex-post analysis: We analysed past developments and trends on the level of over 700 occupational sub-groups within the auto industry and mapped them (2013­–2023). 
2. Scenario up to the year 2035: On the basis of the ex-post analysis, we calculated a possible scenario for the development of employment in the automotive industry up to the year 2035 on the level of around 140 professions. 
3. Skilled-worker shortage classification: We ranked the results in the context of the skilled-worker shortage and demonstrated the macro-economic significance.

Links and downloads

To the study (PDF, in German)

VDA press release

Project team: Markus Hoch, Philipp Kreuzer, Hannah Staab

Latest update: 29.10.2024