Spain’s automobile industry expects production and exports to fall about 10% this year as Europe’s third-biggest producer struggles with slumping European demand and its small and midsize car exports lose their shine.
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The industry has reiterated its pleas that the government reform the sector’s labour policies to boost flexibility and reduce absenteeism. Top manufacturers’ federation ANFAC also made a desperate plea for the improvement of transport and logistics infrastructure.
“We’ve been negotiating with the government and one year later things are still the same,” Anfac president Juan Antonio Fernandez de Sevilla said at a press conference in Madrid. “If nothing is done, we are going to have problems in the medium term.”
Anfac has stuck to its previous 2.7 million vehicle production target for 2005, a 10% drop from 2004. It expects exports of around 2.2 million units.
Giving hope to the industry, domestic sales are seen rising 2% to 1.52 million units amid a buoyant market propped by stable interest rates and the Prever scrappage programme.
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By GlobalDataHowever, Fernandez said he is worried that Spain is losing market share for its B- (supermini/subcompact) and C-segment (lower-medium/compact)-sized car exports.
“We don’t have exact figures, but we are noticing that demand for the cars we make has increased across Europe but fallen here. Somone out there is producing more competitively,” he noted.
To boost Spain’s competitiveness, Fernandez said it was urgent for the state to allow even more flexible deals with labour. Temporary contracts must stretch over 12 months and absenteeism rates (up to 5,000 workers are off every day) need to be cut drastically.
Transport and logistics infrastructures are [deficient] given the sector’s volumes,” Sanchez said. “We need more roads, more tunnels, more bridges to connect to Europe” while national rail operator Renfe must step up cargo capacity.
Finally, the government should remove Spain’s car-registration tax, which forces dealers to cut prices, Sanchez said, adding that the industry’s profit margins have slumped to 0.6% from 1.7% five years ago.
Ivan Castano
