Why Diversification is Needed in the Auto Industry



One of the many topics discussed at length during this years’ NADA (National Automobile Dealers Association) show was diversification within the auto industry. For as long as the automobile industry has existed, it has largely been male-dominated and over the years the industry has taken some steps in attempting to help diversify it. Unfortunately, the industry is still very much male-dominated, so the subject of helping to diversify it still comes up time and time again.

Gender, cultural, and demographic diversification is very much needed in the auto industry, and there are a few things that we can do in order to help move towards a more diverse workforce.

Importance of Workplace Diversity

By doing a simple Google search, one can find countless studies that discuss the various benefits of diversity within teams, in both leadership and on boards. Moreover, businesses that have both women and minorities in decision-making roles are more likely to experience better financial performance, a lower employee turnover rate, and a higher ROI (return on investment) on average when compared to other companies that lack as much diversity.

Studies have shown that companies with more diverse leadership are eight times more likely to have better business performance, 21% more likely to outperform other organizations on profitability, and six times more likely to be innovative and agile overall. 

Even going past all of the numbers, it has been shown that workplaces that feature more inclusivity and diversity have happier workers. Overall, gender, cultural, and demographic diversity are vital in making a difference for businesses in the auto industry long-term.

A Male-Dominated Industry

As many are well aware, the automotive industry is male-dominated; a study conducted by NADA in 2015 found that only 18.5 percent of retail auto workers are women, despite the fact that 80 percent of buying decisions are made by women. And since then, the numbers haven’t changed much. 

Pretty much all roles including car mechanics to car salesmen are predominantly male roles, with very few women in said positions. There are many clear causes of this lack of diversity, as well as real issues that have resulted from it.

Issues, Causes, & Potential Solutions

Some of the reported issues that have arisen from the auto industry’s lack of diversity include an unwelcoming and noninclusive corporate culture, a lack of advancement opportunities for those with different backgrounds or gender, a clear lack of representation at upper levels, and an inflexible work environment. 

The clear cause of this issue is the inconsistent investment of money, time, and resources into minorities and women, which has resulted in slow progress over the past several decades. These issues can’t be solved by minorities without the engagement from allies and company leadership, with organizations requiring top management to take the initiative. 

But even though there is still a long way to go, NADA’s acknowledgement of this issue is at least a good place to start. The automotive industry is far behind many other industries in this sector, and as a result, it will take quite a lot of time, resources, and hard work to become more diverse.

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Published on April 21, 2022

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