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Spain Autos Report Q1 2010
Market |
Automotive and Parts |
Report Type |
Market Research |
Country |
Spain |
Published |
18 December 2009 |
Number of Pages |
53 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
The Spanish autos industry was doubly hit by a slump in domestic vehicle sales and a steep plunge in exports, both of which aggravated the existing problem of a weakening production base in the country. It is believed that the scrappage scheme was primarily launched with the aim of addressing the demandside issues, while a government fund of EUR1.2bn aimed to boost production
Although both these measures have been successful to some extent, Spain ends 2009 with sales considerably lower than 2008 levels. With total vehicle demand down more than 24% y-o-y, to 775,378 units, during 10M09, the report expects a total 23% y-o-y fall in demand by end-2009 which will be followed by a further 7% y-o-y decline in 2010. These forecasts are based on our broader economic view about growth stagnating at 0% y-o-y and unemployment peaking at more than 20% in 2010. We expect modest recovery thereafter, but growth is likely to be limited to 1.2mn units by end-2014, having only partly recovered to the level of 1.36mn units sold in 2008.
The plunge in export demand has also prompted lower capacity utilisation by most carmakers, resulting in over a 25% y-o-y decline in output, to 1.56mn units, during 9M09. The report has revised down its production forecast to a total 22% y-o-y fall in 2009. A drop in output is likely to continue well into 2010 when weak export demand and slow domestic recovery will lead to another 3.7% y-o-y fall in 2010. The year has already seen some hard bargaining between governments and carmakers, who are seeking state help to make their domestic production competitive. However, the industry received a bout of optimism when Renault announced two major projects at its Valladolid facility in Spain from 2011, which will increase the plant's production from 90,000 to 100,000 units by 2013. Germany’s Audi has made a similar commitment. These actions, and the fact that facilities have operated at reduced capacities, prompts the report to expect a slight increase in production, to up to 2.17mn units, by the end of our forecast period. However, we remain cautious that over the longer term, the future of Spain’s production continues to look unsecure.
Faced with uncertainties regarding production potential and the overall economic outlook, Spain ranks seventh in the Business Environment Rankings for the autos industry in Europe, a long way behind Germany, Italy and the UK. Spanish carmaker SEAT lost its position as market leader to Renault, despite a 19.3% fall in the French firm’s sales during 10M09. Citroën took second place with 72,875 units, down 21% y-o-y, while SEAT was pushed to the third with 68,791 units.
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