May 12, 2021

Sanchez and the EU flu the automobile industry and Spain costs 21,000 million

The Spanish car industry is one of the engines of the national economy. Despite having only its own brand, Seat – which, in addition, is owned by the Volkswagen Group -, Spain is the ninth world car manufacturer and the second in Europe, only behind Germany, according to data from the employers' Manufacturers, Anfac. But despite its importance, the socialist government of Pedro Sánchez has outlined a policy that has sown confusion in the sector. To it have been added the increasingly restrictive policies towards combustion engines encouraged from Brussels. The combination of both factors, together with an adverse international economic situation due to the uncertainty of Brexit and the commercial war between China and the United States, has had a devastating effect on the Spanish automobile sector. According to the study “The impact of the automobile sector on the economic slowdown”, posted on the blog "Nothing is free", The bill would have been around 21,000 million euros between last year and the first months of 2019.

The past was a turbulent exercise for the automobile sector. At the end of the year, certain symptoms of economic slowdown began to be noticed. To this was added on September 1 the entry into force of the new European regulations on WLTP emissions, which is interpreted as the prelude to the many restrictive measures that combustion engines will suffer from now on. In Spain, in addition, the Government and leftist parties such as Podemos launched unequivocal signs that diesel is in its sights. The Executive outlined a first Law on Climate Change and Energy Transition that sought to prohibit the sale of combustion vehicles from 2040. But it has had to rectify its intentions this year before the warnings of the European Commission that it cannot take such action. without EU permission. But diesel is undoubtedly the most threatened. Sánchez intends to equate his taxation to that of gasoline to discourage its use. And initiatives such as the one in Central Madrid reinforced the feeling that it is in the spotlight.

Recoil of wealth

Despite the reversal of issues such as the Climate Change Law or Central Madrid, the sector is in the grip of growing uncertainty. Neither buyers know for sure which car they should buy, nor do manufacturers have clear technology to invest in. And those regulatory misgivings are punishing the car.

According to the study, prepared by De Merino Antonio, Chief Economist and Director of the Repsol Studies Department, and senior economists at the company Rebeca Albacete and Jesús Rubio, if car sales had followed the upward trend of the start of 2018, Last year's GDP could have been 2.56%, compared to 2.35% recorded. That is to say, this drop in operations would have resulted in a reduction of 0.21 percentage points of GDP. Or, what is the same, in 2,500 million euros. This negative dynamic has continued during 2019, so that the fall in sales of the automobile sector during the first quarter of the year reduced the annual GDP growth in that period by 1.55 percentage points. That is, in another 18,445 million euros. In total, between last year and the start of this, regulatory uncertainty that has been created around the automobile has slowed the sector in such a way that, given its important weight in the national GDP as a whole, It has subtracted from the Spanish economy 20,945 million euros.

The car is going to close a fairly negative year. According to Employers' estimates of dealers, Faconauto, sales will fall between 4% and 5%. But the dramatic thing for the sector is that sales to individuals will plummet between 12% and 13%. The forecasts for next year are not much better. Faconauto expects a total setback of sales in the environment of 3%, with another drop among individuals of 7%.


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