The automotive industry’s fragmentation has led to both layoffs and hiring, leaving the acute shortage of skilled talent unresolved.
Release Date:
2019-09-23
The automotive industry is undergoing a once-in-a-century transformation, driving shifts in talent demand.
Recently, Zhang Mingrong, Chairman of the China Automotive Talent Research Association, stated during his participation in the Second World University Alumni Forum that the talent pool in China’s automotive industry is currently undergoing profound transformation. In particular, as the “New Four Modernizations”—electrification, intelligence, connectivity, and sharing—gain momentum, the requirements for building a robust talent base are steadily rising. The ongoing transformation of both vehicle manufacturers and component suppliers is presenting new challenges for talent development in the automotive sector.
Shortage of professional talent
"On the one hand, the pace of talent development in new-energy vehicles is accelerating, yet it still fails to keep up with the demands of industry growth; on the other hand, there has been a decline in specialized talent for conventional gasoline-powered vehicles and internal-combustion engines, resulting in an uneven distribution of automotive talent. Whether in new-energy vehicles or traditional automobiles, talent shortages have become the norm in the industry—a situation that is ill-suited to the current state of China’s automotive sector," said Zhang Mingrong.
In addition, amid declining performance, several auto-parts companies—including Bosch, Autoliv, Schaeffler, and BASF—have announced workforce reductions ranging from 5% to 8%, which has also made many prospective candidates hesitant about pursuing careers in the automotive industry. Zhang Qiang, an automotive industry analyst, notes that when a company is unable to turn a profit, it will naturally seek to reduce labor costs through layoffs, thereby dampening some automakers’ demand for talent.
However, overall, the automotive industry continues to face a severe talent shortage, with hiring needs increasingly shifting toward greater specialization and cross-industry integration.
According to the “China Automotive Talent Big Data Report” released by Liepin’s big-data researchers, during the 2017–2018 period, the overall talent-attractiveness index for China’s automotive engineering sector stood at 1.046, second only to the internet and real estate industries and ranking third among all sectors. Meanwhile, the talent gap in the new-energy vehicle industry reached 680,000.
The aforementioned report also indicates that nearly 50% of professionals in the new-energy-vehicle sector hold mid-to-senior-level technical positions, such as electrical engineers, mechatronics engineers, and software engineers. In contrast, among traditional automotive manufacturing talent, project management roles account for the largest share, with technical engineering positions representing less than 30% of the total. Furthermore, as vehicle connectivity and intelligence continue to advance, the integration between the automotive and technology industries is intensifying, driving growing demand for multidisciplinary talent with backgrounds in big data, artificial intelligence, blockchain, and other related fields.
In addition, the “Mid- to Long-Term Talent Development Research Report on China’s Automotive Industry,” jointly released by the China Society of Automotive Engineers and the Automotive Talent Professional Committee of the China Association for Talent Studies, reveals that, amid the profound transformation driven by the “New Four Modernizations,” China’s automotive industry is currently grappling with an acute shortage of talent. The report identifies seven key talent-development initiatives for the sector and emphasizes the need to start with emerging industries to foster a forward-looking, targeted, and innovative talent pool. Qian Liang, an executive at a foreign-invested auto-parts company, told a reporter from First Finance that, compared with vehicle manufacturers, parts suppliers generally offer lower salaries in design and R&D roles due to factors such as product characteristics and company scale. In particular, the rapid rise of new-energy vehicles as a standout segment within China’s automotive industry has made it increasingly difficult for parts firms to attract and retain top talent.
Notably, the talent war in China’s new-energy-vehicle industry has intensified in recent years—not only among domestic firms but also among foreign-invested enterprises. For instance, Toyota Motor Corporation has signed an agreement with Tsinghua University to jointly establish the Tsinghua–Toyota Joint Research Institute, which aims to integrate resources from industry, academia, and research institutions to advance cutting-edge technologies such as mobility services, diversified energy solutions, and connected vehicles. Meanwhile, the School of Automotive Engineering at Tsinghua University has introduced new undergraduate and graduate programs focusing on emerging areas like electronic information, intelligent vehicles, and advanced powertrains.
As a veteran power-battery manufacturer, the legal battle triggered by the defection of several LG Chem engineers to SK Innovation (hereinafter “SKI”) is now reaching a fever pitch. Recent reports even indicate that South Korean police have issued arrest warrants targeting SKI. Meanwhile, companies such as Evergrande Group and Sweden’s Northvolt are actively recruiting power-battery engineers from South Korea and other countries. In addition, Bosch Group, which previously announced workforce reductions in its internal-combustion-engine business in Europe, has established its first Future Cockpit Technology Center in Shanghai and disclosed that it added nearly 4,000 R&D personnel in 2018—accounting for almost 70% of the company’s total new hires last year.
In addition, there are growing concerns about a “talent gap” in the internal-combustion-engine industry. Liu Miao, a faculty member at the School of Automotive Engineering at Shanghai University of Engineering Science, told Caixin that although the market for internal-combustion-engine talent has experienced significant ups and downs, excessive hype and overreaction surrounding the “ban on internal-combustion engines” have had a negative impact on the training of such professionals. If this trend continues, within the next decade China will face a generational gap in internal-combustion-engine talent, which would deal a fatal blow to the automotive industry. Meanwhile, a student pursuing an engineering degree in engine power systems at the same university told Caixin that many students believe new-energy technologies can replace internal-combustion engines, leading them to avoid choosing this major altogether.
A reporter from First Finance, after reviewing admissions websites, found that several key universities—including Jilin University, Dalian University of Technology, and Xi’an Jiaotong University—have already ceased enrolling students in internal-combustion-engine and power-engineering programs. Liu Miao believes that many scholars are eager to research fuel cells, electric vehicles, and other new-energy vehicles because these industries are still in their infancy, making it relatively easier to achieve research breakthroughs, and because government research subsidies tend to favor new-energy technologies. By contrast, internal-combustion-engine technology is well established, and generating new findings requires the accumulation of much more data.
How to Address Pain Points
Qian Liang stated that, although domestic enterprises currently lack full mastery of the core technologies required to meet China VI emission standards, the Chinese automotive market will continue to see a coexistence of multiple powertrain technologies for the foreseeable future. With the implementation of China VI and the subsequent tightening of environmental regulations, more foreign-invested companies—such as Bosch and AVL—that seek to capture the Chinese market will continue to recruit talent with expertise in internal combustion engine engineering. Moreover, battery and motor management technologies for new-energy vehicles also draw heavily on technical knowledge from the internal combustion engine field, underscoring the commonalities among different automotive technology domains. As a result, internal combustion engine engineering may emerge as a new growth area for employment in automotive engineering going forward.
Earlier, the “Joint R&D Agreement on Next-Generation Zero-Emission High-Efficiency Internal Combustion Engines” was officially launched during the 2019 World Congress on Internal Combustion Engines. Led by FAW Jiefang and jointly signed by domestic and international universities, vehicle manufacturers, component suppliers, and fuel providers, this agreement marks the first time a Chinese automaker has assumed a leading role in a collaborative R&D initiative for internal combustion engine technology. Zhang Mingrong further proposed leveraging the networks of alumni from globally renowned institutions to attract more multidisciplinary, cross-disciplinary talent to the automotive industry through the power of alumni associations.
Liu Miao, on the other hand, believes that several of China’s current technological pain points in the new-energy vehicle industry are closely linked to the relatively short development period, which has resulted in a limited accumulation of conventional technologies. Consequently, he advocates encouraging more students to seek employment at component manufacturers, where addressing these technical challenges will help the Chinese automotive industry achieve breakthroughs in performance, technology integration, and reliability. In terms of educational content, there is an even greater need for a curriculum that integrates foundational technologies with emerging areas of development, thereby cultivating more talent who are well-suited to the evolving demands of the automotive industry.
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