A recent study done by „PriceWaterhouseCoopers“ (PwC) shows an interesting development in the automobile industry. Not surprisingly, the existing r&d departments are expected to grow considerably the next five years. That means the creation of several thousand engineering jobs. However, and this is the real surprise, the demand for mechanical engineers and automotive engineers is expected to slowly decline, while there will be an additional demand for software engineers and other IT specialists and computer scientists. This will add additional strain to an already tight labor market, as the automotive companies will be competing for talent with big players like Google, Apple, and Microsoft!

While the percentage of traditional engineers is expected to stagnate, the overall number of engineers will still increase due to the expected growth of the industry. “The digital revolution has reached the automotive industry, as it has almost every other industry. For the next few years, we expect 60% of all new jobs in the area to be IT related.” (Quote from Felic Kuhnerts, Head of the automotive department at PwC)

Currently about 16,000 IT specialist are employed in the R&D departments of German ca manufacturers. By the end of the decade it will be 19,000, the PwC predicts. During that time, there should also be a significant increase of electrical engineers, from 27,000 today to roughly 30,000. The relative demand for more traditional automotive development staff like mechanical engineering or automotive engineering, who this decade made up almost half of all R&D employees, will decrease. Until 2020, the percentage is expected to be only about 44%. In numbers of jobs that would mean 38,300 (at the moment the number is 37,700).

Investing in creative minds

At first glance, the technology change in the automobile industry seems to be happening at a slower pace than in other industries. However, electronics have been a large part of vehicle construction ever since the 1990s. Hence, consumers have long become accustomed to high-tech vehicles. Even so, PwC Expert Kuhnert is expecting noticeable leaps in development, predicting that 90 percent of all innovation in the automotive industry until 2020 will be in the electronics and software, as opposed to only 70% in 2010. “In automotive engineering, electronics and software become more and more intertwined. An example for that is autonomous driving. It requires sensor technology, which is electronics, but the resulting data has to be processed via software.” Other IT-heavy fields like Infotainment and Connected car applications are also becoming more and more important. “If car manufacturer want to keep up with Google and Apple here, they will have no choice but to invest in Software and IT experts.

Entry level salaries of 80,000 Euros and higher

One can already predict that car manufacturers will move simple jobs to India or Eastern Europe and invest heavily in international IT centers. “The R&D located in Germany, however, need highly creative and innovative specialists – and will have to get used to things previously only known in the IT industry.” Kuhnert says. One of these things is entry-level salaries of 80,000 Euros or more, as well as the need of flat hierarchies and highly flexible work hours“. Digitization will cause the German car manufacturers to face cultural challenges.