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April 27, 2005

SPAIN: EU “must help” boost Spanish car industry’s competitiveness

The European Union (EU) must help Spain's car industry, Europe's third biggest, become more competitive by supporting transport-logistic expansion, eliminating tax burdens and luring more foreign investment, Spanish industry secretary Joan Trullen has declared.

The European Union (EU) must help Spain’s car industry, Europe’s third biggest, become more competitive by supporting transport-logistic expansion, eliminating tax burdens and luring more foreign investment, Spanish industry secretary Joan Trullen has declared.

The industry and the components sector have “a vital role in Europe,” Trullen said at the Cars 21 auto-industry conference celebrated Tuesday in Brussels. Therefore, several steps need be taken to boost its health in coming years.

Trullen’s comments came as top manufacturers’ federation Anfac lowered this year’s production targets by 10% to 2.7 million vehicles amid slumping demand in key markets Germany, the UK and Italy. Export targets were also slashed to 2.2 million from 2.5 million last year.

The EU must help Spain and Portugal bolster its limited transport links with Europe by promoting the expansion of trans-continental road and rail infrastructure, and boosting rail freight quality. Maritime networks should also be further developed, Trullen said.

Trullen said that Spain’s car registration tax (ranging between 7-12% over the 16% general IVA duty) should be scrapped and that the EU should help attract more research and development funding to the country.

“The registration tax doesn’t exist elsewhere in Europe and we need funds to establish more auto design centres such as the one Seat has in Barcelona,” Anfac communications director David Barrientos added.

The EU should further consider the industry’s competitiveness when drafting the next phase of its Euro 5 auto environmental legislation, which could impose tough restrictions on nitride oxide (NOx) emissions.

These rules could increase a diesel model’s price tag by up to €1000 in Spain, Barrientos noted, undermining diesel sales and bolstering petrol model demand, which could undermine carbon dioxide reduction campaigns.

Ivan Castano

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