• Industry.All Spanish car factories are already up and running
  • Market: Car sales rose 1.1% in July

Like the rest of the sectors, the automotive industry was forced to stop its activity during confinement. Factories closed from mid-March to May 11; similar period to which the activity of the dealers was stopped.

To avoid massive layoffs, automotive companies mostly used the formula of the Temporary Employment Regulation File (ERTE), a tool widely used in the sector. Without going any further, before the state of alarm the workers of the PSA factory in Villaverde, the members of the Citroën C-Elysée and Peugeot 301 production line at PSA Vigo or those of Iveco Madrid were already going through an ERTE

75% of automotive companies (industry, dealerships and workshops) have used this formula during confinement , according to a report by Ransdtad Research, a percentage 29 points above the average for all sectors, located at 49 %. Given the nature of the sector's activity, teleworking has been used by 52% of automotive companies, four points below the average , which stood at 56%. However, the use of remote work has been very high in the sector, given that the majority of work in vehicle and component factories, dealerships and workshops is face-to-face.

However, despite these two labor flexibility tools, the number of employees in the automotive industry has decreased by 4.1% to 213,100 people in this second quarter compared to the first, and 9% compared to the same period of 2019 , according to data from the Active Population Survey (EPA) for June.

This loss of employment has also been reflected in vehicle sales and repair companies. According to the EPA, 316,100 people worked between April and June in this sector, a figure that represents a drop of 4.9% compared to the first quarter of the year and 5.9% compared to the second quarter of 2019 . If we add industry, dealerships and workshops, the automotive industry closed June with 529,200 workers, representing a 7.2% drop compared to the same period in 2019.

One of the reasons for this job loss is, according to the Randstad Research report, that only 4% of automotive companies were able to continue their activity normally during lockdown, while the average for the economy was 18% . And only 3% of entrepreneurs were able to maintain the same volume of production, a percentage that was 15% in all sectors.

Nissan Dealer.

On the other hand, 78% of the companies in the sector had to reduce or stop activity, much more than the average for the economy, which was 52% . Specifically, 44% of businessmen were forced to temporarily stop their economic activity, 18 percentage points more than their colleagues in other activities; and 37% were forced to reduce their activity, while in the economy as a whole this percentage was 29%.

Slow recovery

Entrepreneurs in the sector, according to Randstad, believe that the return to normality of the business will not occur until the end of 2021 or 2022 and that everything will depend on how the main European markets recover, receivers of 83% of the vehicles made in Spain.

For the moment, the data for the sale of vehicles in July in Spain were positive, with a 1.1% increase to 118,000 units. On the other, vehicle production in June was 19% lower than in the same month of the previous year, with 210,888 vehicles . Spain will stop manufacturing between 600,000 and 700,000 vehicles due to the stoppage and the slow recovery in demand, according to data from Anfac, the employer's association for vehicle manufacturers. Hand in hand, along with vehicle factories, are component factories that, the less production and demand for automobiles, the fewer parts they produce.

Added to all this is the fact that the Spanish automobile industry sees its competitive advantage threatened with the arrival of the electric vehicle in two ways . On the one hand, only three cars and one 100% electric van have been awarded. On the other hand, the competitiveness of nearby countries grows: in Morocco it is cheaper to manufacture; hence the importance of Spanish factories being awarded value-added vehicles, as explained by Anfac. In fact, since 2018 the automotive industry has lost jobs in its factories. And the loss that Nissan will cause when it closes on December 31, 2021 is not discounted.

And in the sector of the workshops and the repair of vehicles , a study by the Euromaster chain predicts that this year the activity will fall by 20%, given that less use of the vehicle is expected in the usual trips for teleworking.

Thus, only 21% of companies expect to fully recover by the end of the year . The percentage of entrepreneurs in the automotive sector who are confident of achieving recovery before the second half of 2021 is already 69%, less than 80% of the average for the economy. The main concern is economic uncertainty, although the sector applauds the Moves II plans and the Renove Program of public aid for the purchase of a car, whose budgets are included in the Plan to Promote the Value Chain of the Automobile Industry , which has an amount of 3,750 million.

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