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Technological Transformations and the Automotive Services Industry

This report examines the challenges facing the automotive services industry in Québec as it transitions from selling and servicing traditional combustion-engine vehicles to new generations of motor vehicles. These new models are computerized and connected through sophisticated on-board diagnostic (OBD) systems, integrate advanced driver assistance systems (ADAS), and are often propelled by hybrid and electric motors.

Key Takeaways

1

The automotive services industry provides a good illustration of how technological change is impacting a fairly traditional industry, in which the skill base is not necessarily where it needs to be, and the basic and lifelong training systems are showing several gaps.

2

To be employed effectively, skills and their development must be understood in their particular context (i.e., not as a generic plug-and-play strategy for national skills development). New solutions need to be more systematic and province-wide, while also being grounded in the initiatives of relevant stakeholders.

3

The automotive services industry provides a good illustration of how technological change is impacting a fairly traditional industry, in which the skill base is not necessarily where it needs to be, and the basic and lifelong training systems are showing several gaps.

Executive Summary

This report examines the challenges facing the automotive services industry in Québec as it transitions from selling and servicing traditional combustion-engine vehicles to new generations of motor vehicles. These new models are computerized and connected through sophisticated onboard diagnostic (OBD) systems, integrate advanced driver-assistance systems (ADAS), and are often propelled by hybrid and electric motors.

This technological shift has disrupted traditional business models in a complex multi-tiered industry that ranges from manufacturing, sales, and services to parts distribution, repairs, and recycling. Its impacts have multiple implications for future skills requirements and the provision of skills training. The skills challenges involved in transitioning a workforce from traditional sales and servicing to a much more innovation- and technology-focused industry provide the main focus of this report.

The automotive services industry provides a good illustration of how technological change is impacting a fairly traditional industry, in which the skill base is not necessarily where it needs to be, and the basic and lifelong training systems are showing several gaps. This study examines auto services in Québec, with a focus on the automotive service technicians (primarily mechanics) who ensure the maintenance and repair of motor vehicles in dealerships, as well as aftermarket services for those vehicles.

The report examines how diverse actors in the Québec auto services industry—including large-scale manufacturers, small and medium-sized enterprises (SMEs), their value chains, trade unions, labour–management joint committees, training bodies, and government agencies—are developing practices to fulfill the need for new skills and address issues related to jobs and work. Our study shows that the strategies used to respond to skills shortages, gaps, and future skills challenges are an apt reflection of the complex architecture of the sector. The study also shows how various stakeholders can be brought into the implementation of policy and practice for skill development and innovations in the training ecosystem.

Virtually all key stakeholders and institutions in the industry are involved in multiple skills and training initiatives. These stakeholders range from manufacturers and dealers to consultants, trade unions, educational institutions, segments of the aftermarket, and employer and consumer associations. Their collective solutions are well-grounded in the realities of the auto services industry, helping to resolve various problems as they arise. Indeed, what is especially remarkable is how many different stakeholders are taking up, in their own ways, similar challenges. Moreover, most actors—including businesses and employers’ associations—are convinced that individual and market-based strategies cannot easily overcome the difficulties that they face. This insight has partially confirmed our initial expectations: to be employed effectively, skills and their development must be understood in their particular context (i.e., not as a generic plug-and-play strategy for national skills development).

Skills are also collective goods that are curated over time, resulting in “skills settlements,” which are the product of industry actors and institutions interacting over many years. Even if many initiatives, by necessity, are targeted to particular groups of workers or occupations, there is also a common conviction that the industry requires sector-wide strategies in which multiple actors and institutions are moving in the same direction. However, it is uncertain to what extent these coordinated initiatives can provide long-term solutions to challenges in the industry

Some initiatives pursued by particular businesses are genuinely innovative, but there is a lack of evidence and analysis about their effectiveness in the context of a larger strategy. Resulting from extensive social dialogue and stakeholder collaboration, the institutional strategies pursued by both the comités paritaires de l’industrie des services automobiles (CPAs) and the Comité sectoriel de main-d’oeuvre des services automobiles (CSMO-Auto)1 offer more collective purchase in meeting some of the most pressing skills issues. Yet these strategies are also often patchwork, with a complex system of ad hoc state subsidies that often have short-term contracts and are tightly targeted to particular segments or regions in the industry. It would seem that new solutions need to be more systematic and province-wide, while also being grounded in the initiatives of relevant stakeholders.

These steps, though significant, are only the beginning of new developments in the auto services industry. Skills requirements are changing so rapidly that stakeholders will be compelled to engage in much experimentation for workers to keep up with the technology. Among the key requirements will be more comprehensive and enhanced initial training and a robust system of continuing education available to all workers, irrespective of their initial training and their degree of qualification. There is much evidence that new skills settlements are currently being established, but for these strategies to succeed, the industry requires a stronger impetus and greater coherence to increase its overall effectiveness.

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