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Spain cuts vehicle manufacturing by market adjustments

Automotive News

From January to August, production fell by 4.5% and exports, 2%

The doubts that had at the beginning of the year the manufacturers of automobiles of Spain on the evolution of its activity during the 2017, after a satisfactory 2016, are being cleared. And not in the positive sense. The overall production figures are falling sharply, so that the target set by the employers Anfac at the end of 2012 that three million vehicles return from the country’s plants, the record achieved in 2004 and since never equaled, hardly will be reached in the current year. The 2016 was very close, with 2.891.907 units, after growing 5.6% compared to 2015. But in the first eight months of 2017 manufacturing has cut at a worrisome 4.5% and stood at 1,874 .241 units, far from that magic figure of three million.

Exports have also fallen, but less than manufacturing, exactly 2% according to the statistics of Anfac, remaining at 1,601,203 units. Although it should be taken into account that production and sales abroad are not matched in time since stocks are usually generated. Even so, 85.4% of Spanish production has gone to other countries in the first eight months of 2017. A year earlier was practically two percentage points less, 83.3%. Therefore, the domestic market has lost weight compared to the foreign for the group of automobile companies that have plants in Spain. There are altogether nine firms with seventeen factories.

This evolution is even more pronounced when reference is made only to passenger cars, which reduced their production in Spain by 5.8% in the period January-August, reaching 1,478,554 units. This behavior contrasts with that of the total registrations of this type of vehicles – both of the produced in the country as well as outside -, that was of 849.912, a 7% more, according to the data of Anfac. Conclusion: more cars are sold than last year, but manufactured abroad. Imports grow.

Another key element is the fall of some foreign markets that are important for Spanish manufacturing, which is, as has been said, mainly exporting. Anfac highlights two, which are paradigmatic. One is the United Kingdom, the third destination of automobile exports produced in Spain, behind Germany and France. Sales in this market have fallen by 2.4%, according to the employers, with the decline in global car sales in the country. The strength of the euro against the pound, which makes the products of countries with the common currency less competitive, has been able to influence. The other example is Turkey, the first non-EU market for Spanish producers in the sector and has yielded 3.4% until August; in that case as a result of its delicate political and economic situation.

Global production figures are falling
A final factor pointed out by Anfac to explain the cut in production has to do with adjustments in some plants, either by general maintenance work, which is concentrated in summer, coinciding with the main holiday period, or by the introduction of new models to their production lines, which requires technical stops. The latter is giving much more this year than in previous years, according to the employers, which could be deduced that in 2018, with these cars already fully integrated into the factories, activity will rebound.
The figures for the production of industrial vehicles are practically unchanged this year compared to the previous one. Until August 365,412 units were manufactured in Spain, 0.3% more than in the same period of 2016.

La Vanguardia – Óscar Muñoz, Barcelona – 09-29-2017 (Translation Soft)

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