German partsmaker Bilstein has announced it will shut its Alonsotegi, Bilbao, factory amid falling sales in Spain's deep recession.

The closure will see 119 workers leave the site which made suspension parts. It is the second factory Bilstein has closed in Spain after winding down its Madrid plant.

In the past few months, auto sales volumes have fallen sharply because of the economic crisis and this has triggered demand cuts for parts producers already facing "difficult times," Bilstein said in a statement.

The company's move came as Spain's auto industry is facing more sale declines after the government rejected proposals to renew the Plan2000E auto subsidy scheme. Dealers are also suing the state for as much as EUR300,000 of unpaid reimbursals offered by the plan, which rewarded drivers with as much as EUR2,000 to buy a new vehicle.

Bilstein's woes are not confined to Spain. The company also recently shut its Wedohl, Germany factory.

The company said it will do "everything possible" to help the dismissed workers.

In other related news, Spanish parts major Cie Automotive said it will merge with its largest investor Inssec though a stock swap. However, the firm will continue to be called Cie.

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