Responsive Image

Theme 1: Responding to Rapid Skills Change

The growing wave of new technologies and trends is about to redefine mobility. Therefore, it is of vital importance that the millions of Europeans working in the automotive industry are sufficiently prepared. Given the fast pace of developments, and with other world regions keen to take the lead, leveraging the strengths of the European workforce is of utmost importance. 

Simultaneously, domain experts and highly skilled engineers cannot keep up with the pace required to stay in sync with these changes. With the fast pace of industry change, skills grow obsolete quickly. More recent analysis shows the half-life of skills [1] is now only five years - Which means the skills learned today are only half as valuable five years from now.

The impact of the digital and energy transition on today’s jobs and automotive regions is enormous; 
With 2.7 million people working on the manufacturing of vehicles across 226 factories in the EU, the automotive industry accounts for 8.5% of total manufacturing jobs in the region [2]. If the UK is included combined automotive manufacturing employment increases to about 2.9 million [3].  All of these high-skilled jobs are impacted by these changes as well as the entire European automotive supply chain.

The future of the automotive industry is sustainable, smart and shared, and each of these characteristics is associated with both existing and new challenges. 

These trends will all have an impact in terms of changes to existing job roles and associated skills and in a number of cases, in relation to the emergence of new job roles and skill sets. These trends also have implications for EU policy. 

The European Sector Skills Council Automotive Industry Report (2013)[4]  highlights how changes in the EU automotive sector will require a different mix of skills and a permanent upgrading of skills levels and competences. In particular, increased automation and the introduction of new technologies will lead to a shift to more advanced technical skills and more knowledge intensive work at the same time, that manual assembly line jobs will be reduce drastically, or in some cases disappear. 

The EU Commission High-Level Group GEAR 2030 Report [5] underlines how the on-going trends in terms of digitalisation, electrification, Computer Aided Design (CAD), the automation of production processes (smart manufacturing & Industry 4.0) and smart mobility, will bring significant structural changes to automotive enterprises and their workforce in the future.

This poses both challenges and opportunities for the reshaping of the apprenticeship offer across the EU.

While the above trends continue the outbreak of COVID 19 has also significantly impacted on output, working practices and skill requirements across the European automotive sector.

This has included the temporary closure of some factories, raw material shortages and supply chain disruptions together with worsening demand conditions [6].

Recent evidence from the European Automobile Association (ACEA) indicates that COVID continues to depress market conditions across the sector. The organisation reports that during February 2021 new passenger car registrations in the European Union dropped by 19.3%, as COVID containment measures and uncertainty continue to weigh heavily on demand. With 771,486 units registered across the EU region, this marked the lowest February total on record since 2013. All four major EU markets recorded losses last month. Italy posted the smallest drop (-12.3%), while the other markets faced stronger declines: Germany (-19.0%), France (-20.9%) and Spain (-38.4%) [7].

 
In the case of the UK problems relating to COVID are compounded by BREXIT. Although the BREXIT deal provides some certainty for the UK industry it has significant negative implications with additional costs for automotive manufacturers including tariffs, customs declarations, certification costs, audits to prove that rules of origin requirements are met, border delays disrupting just-in-time systems, EU customers switching to other suppliers and visa costs for EU workers [8].

There is also evidence that COVID is not only impacting on the scale of demand but the nature of demand across the automotive sector. ACEA reported that in the fourth quarter of 2020, nearly one in six passenger cars registered in the European Union was an electrically-chargeable vehicle (16.5%), with stimulus packages introduced by governments to boost demand in the sector in response to COVID-19 cited as a key factor driving these changes [9].

Alongside these impacts there is emerging evidence that COVID-19 will have longer term impacts on working practices within the industry. For example, social distancing measures may remain in place for the foreseeable future and companies need to have in place measures to easily adapt to changing guidelines in order to prevent industry disruption [10].

Future implications for the industry are expected to go well beyond these issues with results of recent survey work indicating that a large majority of leaders from advanced industries (which includes the automotive sector) expecting major change in almost every facet of their organisations as a result of the COVID-19 crisis. Long term shifts are expected are across every facet of business operation including the structure of meetings, the role of leadership, core processes and technology, skills, and organisational culture [11].

A long term trend within the sector being accelerated by COVID-19 is increased automation. It was reported in November 2020 that 63% of automotive executives believe that within the next 2 years their organisations will use robotics in uncontrolled environments [12].

Irrespective of the specifc impacts of COVID-19 it is clear that the rapid pace of skills change within the automotive sector will continue and this presents a clear challenge for apprenticeships to keep pace with these changes. This implies the need for the develoment of innovative approaches to track existing skill trends and predict futures changes, together with innovative ways to design and deliver apprenticeships that reflect the latest technological developments and associated skill requirements.    


[4] European Sector Skill Council: Report, EU Skill Council Automotive Industry, 2013​​​​​​
[5] In 2015, the EU Commission set up a new High-Level Group (HLG) for the automotive industry. The High Level Group named GEAR 2030 was formally established on the basis of the Commission Decision 2015/C 6943/2 (19 October 2015). The resulting report was GEAR 2030, High Level Group on the Competitiveness and Sustainable Growth of the Automotive Industry in the EU, 2017​​​​​
[6] COVID-19 outbreak exacerbates European automotive industry woes | IHS Markit
[7] https://www.acea.be/press-releases/article/passenger-car-registrations-21.7-first-two-months-of-2021-19.3-in-february
[8] https://ukandeu.ac.uk/the-brexit-deal-and-uk-automotive/
[9] https://www.acea.be/press-releases/article/fuel-types-of-new-cars-electric-10.5-hybrid-11.9-petrol-47.5-market-share-f
[10] See for example: https://www2.deloitte.com/us/en/pages/about-deloitte/articles/covid-19/covid-19-impact-on-automotive-sector.html
[11] https://www.mckinsey.com/industries/advanced-electronics/our-insights/organizing-for-speed-in-advanced-industries
[12] https://www.accenture.com/ae-en/insights/automotive/technology-vision-post-digital-future