The automotive sector faces unprecedented challenges as we move through 2025. Tier 1 suppliers and OEMs must manage increasing competition from overseas manufacturers while juggling rising costs, a slowing market, and accelerating development cycles—all of which impact automotive engineering recruitment for R&D.
Despite these pressures, demand for specialised engineers remains high. The V-cycle process, which governs the validation and verification of new automotive technologies, requires professionals with niche expertise to ensure product integrity and compliance with OEM standards.
Key Challenges in Automotive Engineering Recruitment
Industry Downturn
The global automotive sector is experiencing a downturn, with many automakers reassessing production strategies. In the US, vehicle production is expected to decline by an average 0.5% annually, with output by 2028 dropping to about 10.4 million units, according to recent market indicators.
Data from the European Automobile Manufacturers Association (ACEA) reveals a stagnant production trend among European automakers, with output declining by 1.5% between 2010 and 2023. The UK market has suffered even more, with a 12% drop in production. Meanwhile, Chinese automakers have increased production by 105% over the same period.
Increasing Competition from Emerging Markets and Disruptors
The rapid expansion of Asian manufacturers has intensified supply chain challenges. As OEMs source more components from China, South Korea, and other cost-effective regions, Tier 1 suppliers in the U.S. and EU must find ways to stay competitive.
Traditional Tier 1 suppliers now compete not only with legacy OEMs but also with agile insurgents who bring vehicles to market in almost half the time. While traditional automakers take 48 to 54 months to develop new models, disruptive firms accomplish the same in just 24 to 30 months and at one-third of the cost.
Geopolitical Barriers to Shifting R&D
Many suppliers have considered moving R&D centres to lower-cost regions. However, recent U.S. government policies, including tariffs on vehicles and parts manufactured outside the USA, may drive costs higher, making this strategy less viable.
According to analysis of tariff impacts, tariffs on imported components could increase vehicle costs significantly. A vehicle priced at £35,000 with 30% imported content could see its price rise by over £4,500 due to new trade policies, potentially reducing demand and impacting hiring budgets for engineering talent.
Data Sharing and Digital Transformation
According to ACEA's May 2025 recommendations, vehicle data sharing is now driving innovation, enhancing safety, and fostering sustainability. This creates new engineering recruitment needs for data specialists who can work at the intersection of automotive systems and data science. The ACEA highlights "green and digital transformation" as a strategic priority for the industry's workforce development.
Strategies to Secure Top Engineering and R&D Talent
In May 2025, ACEA and the Adecco Group announced a partnership specifically focused on addressing "pressing skill demands and challenges" in the automotive industry. This underscores the importance of innovative recruitment approaches:
Prioritising Candidates with Direct Industry Experience
Given budget constraints, hiring managers must focus on engineers with proven expertise in specific automotive product categories. Companies should prioritise:
Engineers experienced in V-cycle processes related to system and unit development
Specialists in software-defined vehicle technologies, including embedded systems and cybersecurity
Candidates with ISO 26262 & ASPICE certifications for functional safety compliance
Making Better Hiring Decisions Using Data
AI-powered recruitment tools and workforce analytics can assess candidate suitability more efficiently. Integrating these tools and predictive hiring models:
Identifies skill gaps before they impact project timelines
Reduces hiring cycles for faster recruitment and onboarding
Improves retention by selecting candidates who match long-term goals
Strengthening Employer Branding
How your business is perceived plays a critical role in attracting talent, particularly when candidates with sought-after skills are scarce. Use your recruitment website and job descriptions to emphasise:
Clear career progression pathways
Involvement in cutting-edge R&D projects
Commitment to the "green and digital transformation" highlighted by ACEA
Secure Top Engineering Talent with Fields & Rudd
The challenges of automotive engineering recruitment in 2025 are significant, but companies that adapt will be better positioned to secure the talent they need. For businesses looking to navigate these challenges, working with a specialist recruitment and executive search partner like Fields & Rudd can provide the expertise needed to secure the very best engineering talent.
At Fields & Rudd, we specialise in executive search and niche automotive hiring, helping businesses secure engineering and leadership talent who can drive innovation for over 20 years. Get in touch with us today to learn how we can support your recruitment needs in this challenging environment.