Message from our Group CEO
Welcome to Capricorn’s third State of the Nation report. This year’s report provides valuable insights once again into both the health of our industry and how Members are feeling about their businesses. Read More
The good news? Despite a couple of years of Covid chaos, the mood remains generally positive. Making our customers happy, solving their vehicle’s problems, and the variety of work continue to drive this positive sentiment.
That’s not to say our industry is without its challenges. Finding good staff, maintaining a work-life balance and finding time for a break remain difficult. Parts shortages and the rising costs of parts are particular challenges in 2022. We dive into all of these in this year’s report.
We also found Members are investing more in training and keeping themselves and their employees up to speed with new technology in vehicles. Perhaps we shouldn’t be surprised that Members who took part in State of the Nation, and who read the report, are more likely to make the changes needed to improve their business. That’s you!
This year, we hope you’ll not just read this report and act on the information and recommendations within, but share it with your friends in the industry, whether they’re Members or not. After all, we’re stronger together.
David Fraser
Group Chief Executive Officer
5 Key Takeaways for Auto Repair Shop Owners
- The shortage of qualified technicians continues but we’re taking on more apprentices and there’s a great opportunity to create a more diverse industry to attract new talent.
- Both pay rates and labour charge-out rates are up and turnover is down, as Members grapple with the skills shortage. But some Members are potentially missing out on opportunities when it comes to calculating their margins and mark-ups.
- Supply chain issues continue to cause some shortages in spare parts and Members should plan ahead so they’re always prepared.
- While we’re generally both happy and optimistic, we still struggle to take a break and maintain our work-life balance. It’s an area that needs real attention.
- We’ve made a lot of improvements in the past couple of years but there are still plenty of easy wins available to boost profitability and efficiency in most workshops.
Our IndustryWho We Are
89% of respondents ran independent workshops, 64% ran mechanical workshops and almost three-quarters were the sole decision-makers in their businesses. Read More
- Members have been working an average of 22 years in the industry and running their own workshops for 14 years.
- 14% of vehicles serviced are 2019 models or newer, 18% are 2016-18 and 21% are 2011-15.
- On average, workshops see 28.6 vehicles a week. Australian workshops average 27.3 vehicles and NZ workshops 33.
(I love) giving good services and receiving good feedback from customers, solving tricky issues that no one else can, and giving high-quality workmanship at a reasonable cost.
Business Type
64% Mechanical Workshop
10% Panel and Paint
8% Auto Electrical
7% Commercial Truck
5% Tyre and Suspension
6% Other
Average number of vehicles seen
per week by a number of hoists
1-2 hoists
3-4 hoists
5+ hoists
Australia
New Zealand
Our IndustrySuccess and Happiness
For the first time, this year we asked how happy you are in your career. Almost two-thirds of respondents said they were very or extremely happy with their automotive industry career. Read More
- The top reason Members gave for being happy was “I love what I do” (36% of the total and 53% of those who were very or extremely happy).
- More than half of mobile mechanics said they love what they do (for most other business types it was nearer one-third).
- Members who felt the least successful placed greater emphasis on financial stresses (68%) and paying themselves wages (41%).
16% Extremely happy
46% Very happy
31% Moderately happy
5% A little happy
2% Not happy at all
Positives of working in the industry
| Making happy customers happy |
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| The fun of problem solving / fixing things |
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| Working with cars / passion for automotives |
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| Meeting new people everyday |
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| No one day is the same as another |
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| Self Employment / flexibility of working solo |
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| Others |
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| Nothing |
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Our IndustryChallenges
According to this year’s survey, the major challenges facing Members were:
- The ability to take time off (and maintain work-life balance)
- Parts shortages & rising costs
- Finding good staff
- Keeping up-to-date with technology
- 46% of Members had trouble finding time to take a holiday, compared to 54% in 2021.
- Just 28% of Members said changing technology was a challenge for the industry (down from 49% in 2019) as Australia’s Right to Repair laws come into effect.
- Insurance companies determining prices is a major challenge for panel and paint shops (65%).
Biggest Challenges to running an auto business
| Having a good work-life balance |
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| Finding time to take a break or holiday |
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| Finding good staff |
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| Shortage of parts |
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| Balancing different parts of your role |
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| Increase in parts prices |
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| Financial concerns |
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| Changing technology / staying up-to-date |
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| Access to technical information & diagnostics |
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| Price sensitive customers |
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| COVID impacts |
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| Running an efficient business |
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| Finding good apprentices |
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Easy Wins
Stop googling for quick fixes:
Don’t know how to repair something? Three-quarters of Members are turning to the internet to search for information on how to repair, install or replace. Read More
- In Australia, new Right to Repair Laws that came into force on 1 July give you access to significant amounts of information and data. Make use of it.
- Capricorn Service Data, powered by Auto Data, is free to all Members and has service information on more than 34,000 different vehicles.
Reassess your charge-out rate for labour:
Qualified technicians are getting harder to find, so labour costs have gone up. Consider whether that’s a cost you can afford to absorb or whether you need to pass it on to your customers. Read More
- Labour charge-out rates of Members who participated in the survey are up by an average of $5 an hour on last year, suggesting many Members are choosing to pass on costs, rather than absorb them.
- Calculate your charge-out rate based on your costs plus the profit margin you want to make, rather than what other workshops nearby are charging.
Rethink hiring an apprentice:
If you’re thinking about taking on an apprentice (especially if you’re worried about the time and expense), take advantage of the government funds available to help auto businesses. Read More
- Find out what incentives are available in your state or country and find out whether you qualify.
- Help expand opportunities for women in our industry by taking on a female apprentice.
Reassess your margin on parts:
How are you calculating your margin on parts? Don’t simply put a set percentage mark-up on all parts sales. Be thoughtful in the way you calculate what you charge. Read More
- If you saved money on the purchase of the part but only charge your usual percentage margin, you’re passing the saving on to the customer. Could those funds be invested into your business instead?
- Don’t just match the retail price for a part, understand your break-even point and the margin you need to make.
Charge for diagnostics:
Almost half of all workshops are still only charging for diagnostics sometimes. More than one in 10 never charge. You’re throwing away money. Read More
- Diagnostic equipment is expensive and charging for it helps cover the cost of the equipment, the all-important updates, and the time taken to do the diagnosis.
- It’s time to recognise the specialist knowledge, skills and years of training and experience that go into diagnostics. Doctors don’t diagnose for free, nor should you!
ChallengesSkills Shortage
Finding and retaining staff:
A lack of qualified staff is the top challenge facing the industry, and finding good staff remains a top three challenge for Members in running their businesses. Read More
- 56% of NZ and 49% of Australian Members said finding qualified staff was a challenge for the industry.
- 34% of Members said having loyal staff was a marker of success.
- 57% of Members would recommend a career in auto to a young person, up from 52% in 2020.
Biggest challenges facing the industry.
| Lack of qualified staff |
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| Parts shortage |
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| Pricing of parts increasing |
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| Attracting young people into the industry |
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| Lower margins |
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| Changing technology |
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| Access to technical information |
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| Electric vehicles |
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| Capped price servicing / long warranties |
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| Insurance companies determining prices |
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| Lack of structured training / accreditation |
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| Lack of trust from consumers |
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| Environmental considerations |
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| Price comparison platforms |
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In with the new,in with opportunity
We are fishing in a very small barrel. That’s the truth of it.
It’s not just the auto industry that’s struggling to find skilled labour. It’s a problem we’re seeing across all sectors of the Australia and New Zealand economies. Unemployment is low. Competition for labour is high. There just aren’t enough people out there to fill the jobs we have available — and certainly not enough qualified and experienced individuals.
Unfortunately, there’s no quick fix to this problem. Last year, we focused on the importance of attracting more apprentices to the industry — and it’s good to see more Members have embraced that and are taking on the job of training the next generation.
But the competition for apprentices, that pool of young people usually aged between 15 and 20, is extremely high. Other industries want those potential apprentices too, and sadly the auto industry hasn’t been good at selling ourselves as an attractive option, so we miss out.
What can we do about it? Here are a few ideas.
Talk up our industry at every opportunity
We need to talk up our industry instead of talking it down. When Members are asked about the positives of working in auto, their enthusiasm bubbles over. We love what we do. Yet only 57% of us would recommend a career in auto to a young person. As an industry, it’s time we positively promoted auto careers.
Provide more opportunities for women
While the prevalence of women in retail-based roles and apprenticeship positions has increased this past year, the overall number of women in the industry is still low. This is a great opportunity for us.
Women are 50% of the wider population and the workforce. Women, especially female apprentices, are an almost untapped opportunity for us to explore. If we are serious about closing the skills gap, we need to communicate that and break down stereotypes about auto as “a man’s industry”.
This is a key step in building a sustainable industry long into the future — so it was great to see that three of our five Rising Star apprentice finalists this year were women.
Create a more welcoming and diverse industry
Creating a more welcoming and diverse industry will not only attract new people to the industry but help retain the people we currently have. This is about the kind of culture we want in our businesses and our industry.
There’s plenty of research to show that having a diverse workplace is strongly linked to improvements in business performance, effectiveness, profitability and revenue generation.
Creating a more welcoming industry starts at the workshop level. It’s about creating not just opportunities but a workplace culture that is welcoming to all. That’s up to all of us, and the work can’t start soon enough — because the auto industry doesn’t just need more fish, we need a much bigger barrel.
Read More
David Fraser
Group Chief Executive Officer
Our Future
More than half of Members are extremely or very confident about the future of their businesses, while 44% are confident in the future of the industry as a whole. Almost three-quarters now have a growth plan in place, with 40% planning to increase the capacity of their workshop.
Read More- A third of Members use software to measure efficiency, while half measure efficiency based on their ability to pay their account.
- 54% of Members were very or extremely confident about the future because “there will always be a market” for mechanical repairs.
- Almost one in five Members’ businesses are, or soon will be, ready to service electric vehicles.
We have a wonderful returning happy customer base and many new customers weekly. We have a great experienced mechanic who has no job comebacks. We have good cash flow and know how to manage our finances for a long, successful future.
What are you intending to do to grow
| Improve business efficiency |
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| Increase profit margins |
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| Employ more staff |
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| Increase the capacity of your workshop |
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| Win more customers |
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| Other |
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Recommendations
Here are our top tips on how you can use our State of the Nation research to improve your business.
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Make use of quality data sources.
Stop googling for information about repairs. Use reputable resources, like Capricorn Service Data. -
Get ready for EVs.
Whether you like them or not, they’re the future. We’re going to see more of them on our roads and you need to be ready for them. -
Take on an apprentice.
They’re our pipeline of future talent and the long-term solution to the skills shortage. Provide opportunities for female apprentices. -
Charge customers fairly.
Charge for diagnostics. Mark up parts thoughtfully. Consider increasing your labour charge-out rate, if necessary to meet rising costs. -
Plan for spare parts shortages.
While global supply chains are causing problems getting parts, Capricorn Members should feel confident that our Preferred Suppliers are doing everything they possibly can to supply Members with the parts they need. -
Invest in training.
Training improves your productivity and your competitiveness. It’s also an investment in staff that helps with retention. -
Invest in technology.
Don’t fall behind your competitors or risk turning away business because you don’t have the tools or training you need. Recoup tech costs by charging for diagnostics. -
Create an excellent workplace culture.
Make your workshop the kind of place people want to be. Embrace the benefits of a more diverse workforce. -
Take a break.
You need to rest. Structure your business so you can get away. Pay yourself with time off like you’d pay your bills – on time, in full, and non-negotiable. -
Plan for the future.
Whether it’s growing your business or handing over to the next generation, have a plan in place for the future. It’s never too early to have a succession plan in place.