{"id":26885,"date":"2025-01-29T09:58:49","date_gmt":"2025-01-29T08:58:49","guid":{"rendered":"https:\/\/uniglobalunion.org\/?post_type=news&p=26885"},"modified":"2025-01-29T10:12:05","modified_gmt":"2025-01-29T09:12:05","slug":"new-uni-study-car-industry-transformation","status":"publish","type":"news","link":"https:\/\/uniglobalunion.org\/news\/new-uni-study-car-industry-transformation\/","title":{"rendered":"New UNI study: Car industry transformation highlights worker challenges, union growth need"},"content":{"rendered":"

New research commissioned by UNI Global Union\u2019s commerce sector underscores the importance of union representation in car retail to ensure good working conditions amid cut-throat competition and massive transformation in the car industry.<\/p>\r\n

Some key findings of the research paper, entitled, \u201cTrends in the global automotive market and transformations of automotive retail\u201d<\/em>, conducted by Syndex-Romania, are as follows:<\/p>\r\n

Retail workers outnumber manufacturing workers: <\/strong>New technology and automation in automotive manufacturing alongside massive growth of sale and after-sale services, have changed the employment structure in the sector. Workers employed in automotive retail outnumber workers in manufacturing in major markets including the EU (3.5 million in retail, 2.4 million in manufacturing) and Japan (1 million in retail, 883,000 in manufacturing). \u00a0<\/p>\r\n

Recovery is led by growing markets: <\/strong>Car retail was hit hard by the pandemic which was followed by supply chain constraints, high inflation and interest rates that put pressure both on supply and demand. The global automotive market continued to grow in 2024 but at a slower pace than in 2023. Major markets including Europe, U.S. and Italy have still not reached pre-pandemic levels and it may take a couple of years more for a full recovery. Meanwhile, growing markets such as China, India and ASEAN countries have not only recovered from the pandemic but even passed pre-pandemic levels.<\/p>\r\n

The Chinese effect: <\/strong>China is the largest and fastest growing market in the world. With a light vehicle sales volume over 26 million, the Chinese market is bigger than the Western and Central European markets combined. On the production side, Chinese competition is becoming a genuine threat for incumbent players. With an unmatched competitive advantage in terms of technology and price, especially for electric vehicles, Chinese brands are growing their market share both in and outside China. In turn, this pushes European and Japanese carmakers into severe difficulties as for many companies China was key to supporting their profitability.<\/p>\r\n

Electrification transforms the sector: <\/strong>Electrification is undoubtedly the most significant transformation the automotive industry has undergone over the past century. The rise of hybrid and battery electric vehicles continues at a pace that was impossible to anticipate just a few years ago. Some 14 million electric vehicles (including both battery electric vehicles and plug-in hybrid electric vehicles) were sold in 2023. The market share of electric vehicles was around 2 per cent in 2019, which has reached 18 per cent in 2023. Government regulation and incentives still play the key catalyst role in electrification.<\/p>\r\n

Smart cars and changing customer demands:<\/strong> Software-defined vehicles (SDV\u2019s, which are also referred as smart cars), are gradually becoming the norm alongside electric vehicles. Most customers are willing to pay more for digital features, especially in the growing Asian markets. While traditional producers are struggling to respond to the increasing demand for better digital connectivity, electric vehicle companies and newcomers are catching up with the changing customer demands fast as they are already heavily invested in software technologies . \u00a0\u00a0<\/p>\r\n

\u201cOmnichannel\u201d car dealership model becomes the norm: <\/strong>Fuelled by transition to electric vehicles and intensifying competition, forecasters predicted a shift from the traditional franchised dealer networks to agency or direct-to-customers models. However, recent developments have shown that the new paradigm will be in fact \u201comnichannel\u201d, with carmakers deploying all three organizational models depending on market specifics. Conventional franchised dealers are here to stay but with a growing challenge from the agency and direct-to-customer models.<\/p>\r\n

Car retail workers face multiple challenges: <\/strong>The research sheds light on the key challenges facing car retail workers, as follows:<\/p>\r\n