Total employment in the automotive retail sector accounts for just over 2% of employment in the UK.  Direct employment estimates range between 576,566 (from the Labour Force Survey) and 585,000 (from the Annual Business Inquiry).
 
Total employment in the automotive retail sector is set to remain at around 640,000 for the next decade.  Approximately 80% of sector employees are male.  85% of the workforce are employed full-time and 15% are self-employed.

Sources: Automotive Skills SSA Stage 1 – UK 2006a, Working Futures 2006 and SSDA Skills Matrix 2006

Source: Automotive Skills SSA Stage 3 – UK 2006c, figure 4.

For more national and regional information on employment in the sector go to the Regional and national dimension. 

For information on employment status of the workforce and future trends see:

The UK as a whole is the second largest new car market in Europe after Germany.  There were nearly 8 million used cars sold in the UK in 2005.  In 2005, there were around 30.7 million cars in use on the UK’s roads. 

In 2004, approximately 2.5 million new cars were registered in the UK.  Recent evidence suggests, however, that, in line with a slowing of the UK economy, new car registrations have fallen by about 100,000 in 2005 compared to 2004.  In contrast, UK car fleet registrations have increased for the eighth consecutive year and the used car market is increasing.

In 2004, nearly 0.4 million new commercial vehicles were registered in the UK.  Although there was a slight decrease in the number of commercial vehicle registered between 2004 and 2005, generally the numbers registered is increasing.

There are more than 1.6 million motorcycles in Great Britain, but there are low ownership rates in Wales and Scotland.  Motorcycle and Scooter registrations are on the increase, a 9% increase in 2006 compared to 2005, whilst Moped registrations fell slightly. 

Servicing and repair activity in the sector is reportedly showing some signs of a small decline. 

Source: Automotive Skills SSA Stage 1 – UK 2006a and SMMT 2006

For more data on businesses in the sector see:

The number of organisations reporting skill gaps varies across the UK:

• 19% in England, compared to 23% in 2004
• 23% in Scotland
• 23% in Wales
• 11% in Northern Ireland

From an employer perspective it is significant that there is a lack of proficiency in technical skill occupations. 

About 1 in 5 companies report having vacancies:

• In England, employers are most likely to report hard-to-fill vacancies because there are: a low number of applicants with the required skills (38%); not enough people interested in doing a job (34%); and a low number of applicants (28%).
• In Wales, vacancies are most likely to be hard-to-fill because there are: a low number of applicants with the required skills (45%); a low number of applicants with the required attitude, motivation or personality (30%); and a low number of applicants generally (27%).

Source: Automotive Skills SSA Stage 1 – UK 2006a

For more information on vacancies and skills gaps see:

Recruitment difficulties are reported by 46% of employers in the sector, including:

• 64% of franchised dealers
• 46% of independent dealers

Difficulties in recruiting technicians and mechanics are reported in just over 20% of franchised dealers and 20% of independent dealers.  A significant number of independent dealers also report a shortage of MOT testers.  However, employers report very few problems in recruiting managers. 

Recruitment problems are believed to be because applicants are not right for the job, the sector has a poor image, a higher number of young people are going into higher education, and finally there are concerns over salary levels.

Sector-specific experience is usually more highly valued than transferable skills sets and competences.  As a consequence there is little evidence of recruitment from outside the sector.

Staff turnover is a key problem for the sector as a whole.  Data suggest that high turnover rates for franchised dealers are likely to be in both sales and service.  In comparison, independent dealers have the highest turnover rate in servicing.  Annual staff turnover rates for franchised dealers, independents and bodyshops range between 15% and 20%.

Source: Automotive Skills SSA Stage 1 – UK 2006a

For national differences on recruitment and retention go to the regional and national dimension. 

Across the UK future drivers of skills and productivity in the sector have been identified including:

• Patterns of consumer demand – there is a growing consumer demand for particular types of used cars.  Demand is strong for diesel, small and family cars.
• Government policy – ‘green schemes’ which legislate on vehicle emissions will impact on the product technology and skills needed in the sector.  Also more manufacturers are working towards producing ‘greener’ cars, partly in response to legislation, which will drive future skills needs.
• Employee-related legislation – such as the introduction of paternity leave, which may impact on the sector, particularly small companies with few employees.
• Technological change – continuing changes in IT and the increasing use of the Internet means that staff have to: learn new skills; adapt to new requirements for maintenance and repair; plus attain high-level problem solving skills and technical diagnostic skills to cope with very complex vehicle systems.  57% of traders believe that the Internet is becoming a major part of business activity, whilst 39% believe that it will not grow enough to make a significant impact.
• Globalisation – the automotive industry as a whole is highly globalised, and this is likely to continue.  However, the ‘retail’ sector downstream of the factory gate is very largely unaffected by international competition.
• Innovation – for it to have a healthy future with healthy profits the UK automotive industry needs to become far more innovative.
• Competition – with increasing competition there are increasing demands for well-trained, responsive staff to ensure customer satisfaction and retention.  The importance of customer facing skills and the impact they have on business competitiveness cannot be underestimated. 
• Enterprise – it is crucial to the improvement of productivity in the sector that entrepreneurship is encouraged and supported by government. 

Source: Automotive Skills SSA Stage 1 – UK 2006a