DESPITE the imminent closure Holden, Ford and Toyota's car making operations, employment in Australia's automotive sector is actually on the increase.
According to research from industry group Auto Skills Australia, more than 4,000 jobs were added to the sector during the 2012/13 financial year.
More than 361,000 people were employed in the automotive sector at June 30, 2013, with the strongest jobs growth recorded in car and parts wholesaling, repair and maintenance and tyre retailing.
"The employment gains within these sectors have more than offset the losses in the manufacturing and retail sectors, thus resulting in a positive aggregate rise in employment for the whole industry," Auto Skills said.
The group said vehicle manufacturing accounted for only 13 per cent of the Australian auto industry, with most of the sector made up of sales, repair and servicing businesses.
But the report also warned of a high rate of closures during 2012/13, especially among small businesses and in the automotive body repair sub-sector.
It said a reduction in motor vehicle accidents, along with the high cost of equipment and training to repair modern vehicles, weak consumer spending and high insurance costs were hurting many automotive body repairers.
A survey conducted for the report found 44 per cent of automotive businesses are currently experiences variable conditions, while a quarter are experiencing below average growth.
But it also found more than half of all respondents expected conditions to improve in the next year.
Meanwhile, the closure of the vehicle manufacturing sector and structural change in the industry meant there would be fewer independent servicing and repair businesses, so those that wanted to survive would need to innovate.
"Those enterprises seeking to remain in the industry will need to have innovation at the core of their business models, along with modern workshop facilities, ongoing investment in staff training and capital equipment, and a keen customer focus and service outlook," the report said.
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