Automakers tackle supply chain labour shortages as EV revolution accelerates

automotive sector. As the electric vehicle (EV) transition races ahead, automakers are grappling with a shortage of skilled workers in their supply chains that threatens production targets and the industry’s broader ambitions.

Changing workforce demands in a dynamic sector

India’s automotive industry, long a pillar of manufacturing and employment, is experiencing a shift in priorities. The sector’s focus has moved from creating jobs to ensuring that workers possess the right skills to keep pace with advances in electrification, automation, and digital manufacturing. According to the Automotive Skills Development Council (ASDC), the core challenge is not a lack of people but a shortage of job-ready talent with expertise in the latest technologies.

This shift has been felt most acutely in the supplier ecosystem. Component manufacturers, which are vital for producing everything from wiring harnesses to advanced electronics, are facing difficulty attracting and retaining engineers with specialised skills. With the growing complexity of vehicles—especially electric and hybrid models—the pressure on suppliers to evolve has never been higher.

Industry leaders respond to the talent crunch

The severity of the problem came into sharp focus when Mahindra & Mahindra, a major player in both traditional and electric vehicles, revealed that labour shortages at its suppliers had led to production cuts of up to 15 per cent. This admission highlighted how workforce gaps at even the smallest component plant can reverberate throughout the entire manufacturing chain, stalling output and delaying product launches.

Tata Motors and Bajaj Auto are also contending with these pressures as they expand their EV and ICE (internal combustion engine) portfolios. In Chakan, a dense automotive hub, suppliers are struggling to keep up with demand for components critical to the next generation of vehicles. The challenge is compounded by competition for skilled engineers, who are increasingly lured away by technology firms, global engineering services companies, and multinational capability centres.

Skills gap widens as competition intensifies

Industry experts note that traditional incentives such as compensation are no longer sufficient to secure top talent. Munira Loliwala, an HR strategist and talent consultant, points out that young engineers today are just as concerned with work-life balance, opportunities for advancement, and geographic location as they are with salary. Large original equipment manufacturers (OEMs) benefit from established employer brands and structured career paths, but their suppliers often lack the same allure—even when working on cutting-edge technologies.

The issue is particularly pronounced in industrial clusters like Chakan, where infrastructure challenges, lengthy commutes, and housing constraints deter potential recruits. As engineers with expertise in electronics, battery systems, and automation become more sought after across multiple industries, automotive suppliers now find themselves competing for talent with sectors that were once outside their competitive sphere.

Automakers take an active role in workforce development

With the supply chain talent shortage increasingly impacting production outcomes, automakers have begun to take a more hands-on approach to workforce development. Instead of relying solely on traditional supplier audits, manufacturers are deploying supplier-development teams to help vendors recruit and train staff, bolster apprenticeship programs, and improve retention at critical facilities.

Some OEMs have introduced targeted interventions, such as sending manufacturing and quality experts to supplier plants for extended periods to stabilize operations and resolve bottlenecks. Others have established exclusive logistics channels to ensure the timely delivery of vital components, reflecting the urgent need for reliable production inputs as the EV revolution gathers pace.

“Automakers are realising that if their suppliers cannot attract, train, and retain talent, the disruption will eventually hit their own assembly lines,” Loliwala told The HinduBusinessLine. This marks a significant shift from a model focused on supplier management to one emphasizing ecosystem management, where the health of the entire supply network is closely monitored and supported.

Sector-wide partnerships and skilling initiatives emerge

To address the widening skills gap, manufacturers are forging stronger partnerships with Industrial Training Institutes (ITIs), industry bodies, and skilling organizations. These collaborations aim to create a broader talent pipeline for the sector, particularly in areas such as EV assembly, robotics, and advanced electronics. ASDC is leading efforts to expand training programs and strengthen apprenticeship pathways, ensuring that the workforce evolves in tandem with technological advancements.

Chandrakant Alsundkar, an industrial relations expert, notes that the supplier ecosystem is under pressure to produce components designed for a future that much of the current workforce is not yet equipped to handle. “Inventory used to be the insurance policy for production, but today, talent is just as critical,” he observed. The ability of a supplier to sustain production now hinges as much on workforce capability as on equipment or inventory.

Future outlook: Building a resilient automotive talent ecosystem

As the automotive industry accelerates toward an electrified and digitally driven future, the need for a robust, future-ready workforce is only set to grow. Automakers are investing heavily in new products, technologies, and capacity, but the pace of growth will ultimately depend on whether the talent pipeline can keep up with technological change.

From Pune to Chennai and beyond, the sector is embracing a new approach: nurturing talent not just within their own factories, but across the entire supplier ecosystem. This collaborative strategy, rooted in partnerships, proactive skilling, and ecosystem management, may prove vital as India’s auto industry seeks to maintain its global competitiveness and seize opportunities in the electric mobility era.