Spain's automobile production and employment rates will remain unchanged or rise in the future, despite Eastern Europe's growing status as a manufacturing hub, according to Spanish trade union representatives.

"We should be able to maintain our market share and maybe increase it in the next three years," Joaquin Arias Gallego, Renault's secretary general for top union CCOO predicted.

"We see the threat from Eastern Europe or Asia a bit far away. They still can't compete with us."

Echoing other unions, Arias said Spain's bread-winning small and midsize sedan continues to win strong orders from Europe's leading markets. Eastern European producers cannot match the "high-quality assembly, skilled labour and manufacturing efficiency" of the Spaniards, he pointed out.

The country also competes in different segments than Eastern Europe, which is more specialised in the lower-end of the car market than Spain, Arias added.

Finally, Eastern Europe doesn't have the available capacity of Spain, he said, though he acknowledged this may change in the future.

Spain makes the strong-selling Renault Megane, Ford Focus and Citroen C4 Picasso models at Valladolid, Valencia and Vigo. It also assembles the upmarket Modus supermini and other smaller cars.

The country lost the Ford Ka a few years ago. However, though the VW Polo and Opel Meriva were at one point nearly moved to Eastern Europe, the country's aggressive unions helped broker a deal to keep the cars at home.

Quality considerations apart, recent investments and factory-headcount adjustments will keep the current model mix in Spain, Europe's third-largest car manufacturer with a 17% market share, the observers added.

Arias expects Spain to maintain or increase its 75,000-strong workforce due to a growing portfolio of Spanish-made models.

However, he warned that high logistic costs (which add 25% to cost) could hurt future competitiveness.

 "If this isn't improved, Eastern Europe may catch up with us in 5-8 years," Arias predicted.

Ivan Castano Freeman