The labour shortage is becoming more than a handbrake for the automotive industry.

It's joining a growing chorus of complaints that not enough is being done by the Government, despite recent tweaks to immigration policy.

The Motor Trade Association (MTA) said its members are struggling to get staff locally, and that immigration settings were "too tight" to entice overseas talent.

Steve Nuich Panelbeaters in Auckland is shutting its doors after four decades because it can't get enough workers.

Owner Steven Nuich said it's been a problem for the past two or three years.

"New Zealand-trained people are almost impossible to get, we could have an advert up for a whole month without even doing an interview,” Nuich said.

"The Government is also making it extremely hard to get people from overseas".

Nuich said wages were also being pushed up, and he can't pass that on, because they are getting squeezed by contracts from insurance companies.

MTA spokesperson Simon Bradwell said staffing is the number one thing keeping their members awake at night.

He said it was a problem affecting the industry deeply and it impacts communities when it gets to the point where businesses like Steve's are closing.

• Muster Recruit: Lack of staffing in automotive industry will be a long-term fix
• Economist: Businesses can't find quality or quantity of staff amid labour shortage

"We've got this shortfall that Immigration Minister Michael Wood is refusing to address, because he's keeping the settings too tight and unrealistic for us".

Nuich said after 40 years in business, he’s being forced to call it a day. 

"If I was able to run the business reasonably well, without any staffing issues, then I would have had about 10 more years in me, but there is just no point".

Bradwell said they still have to find workers somewhere until a new crop of talent comes through locally.

"We have to be able to bring people in from overseas. They are qualified, capable people, who add a lot to the community and the country".

Labour Immigration Minister Michael Wood has been approached for comment.