It is said that there is a perfect storm when several adversities are present at the same time. A good part of the Spanish automobile industry is made up of small and medium-sized companies that are warning of a very delicate situation: they are at risk of disappearing.
In a country like ours, which is the second largest European car manufacturer and one of the top 10 in the world, the supplier park is essential. Behind manufacturers like Stellantis, Ford, Mercedes-Benz or Renault there are hundreds of SMEs that provide components, and without them, the car in Spain would be a pipe dream.
Let’s keep in mind that with the 2021 data in hand, Spain manufactured more cars than all the countries in the world combined from the fortieth (40th) downwards. Moreover, in 2021 more passenger cars have been manufactured in Spain than in the United States -given the enormous weight of pick up in their sales.
Numerical anecdotes aside, the Spanish providers park has sounded the alarm with a joint statement between the following sectoral associations or clusters: ACAN (Navarra), AEI La Rioja (La Rioja), AVIA (Valencia), CAAR (Aragón) , CEAGA (Galícia), CIAC (Catalonia), FACYL (Castilla y León) and GIRA (Cantabria). Your survival is not assured.
Leading vehicle manufacturing countries in the world in 2021, by total number of vehicles – Source: OICA
An extremely difficult context
Suppliers have contextualized the situation, plagued by adversities:
- Inflationgeneral increase in costs: energy, transport, salaries, raw materials…
- interruptions of the Logistic chain due to stoppages in automobile factories, in turn due to problems with suppliers
- Reduction of volumes from the COVID pandemic, being a low-margin industry, then enter less
- war conflict in Ukraine, Russia subjected to embargoes and restrictions
- nth labour reform reduces the flexibility to deal with these problems
The companies represented by the aforementioned automotive clusters openly speak of a risk situation for the 2 million jobs they support, as well as their turnover, around 8.5% of the country’s gross domestic product (GDP). Car production compared to 2019 (January to April) has fallen by 25%to take note of the impact.
One of the first things that all these companies from the supplier park jointly request is to review “contractual relationships at all points in the value chain”in reference to “the contracts and relationships that manufacturers have established for many years with their supplier companies”.
Nissan component factory in Los Corrales de Buelna (Cantabria)
The crisis is a synonymous with opportunity to improve the components industry and attract investments for all the transformations that are to come: digitization, ecological production, process electrification, modernization, automation, decreasing need for workers, etc.
The era of the electric vehicle, towards which we are moving relentlessly, will have a huge toll in terms of jobs, since fewer references are needed. In addition, manufacturers are simplifying designs so that even fewer parts are needed. And let’s not say anything in the face of the strength of competitors such as countries of the Maghreb or Eastern Europe.
The electric car problem
Part of the reduction in demand is attributed to consumers being “disoriented” by the messages reaching your ears, leading to confusion about which propulsion technology is right for you. The 100% commitment to electric cars – in the long term it is the most obvious – will have its counterparts if it is not done well and hastily.
General Motors Ultium electric motors
Consumers who can’t wait to make the leap, or don’t care right now, are procrastinating their purchase decisions even having an availability of new vehicles suitable for your needs. There is a reason why more used passenger cars over 10 years old are transferred that are registered totally new, they serve them in the meantime.
This can end up in a situation where new vehicles move away from the purchasing power of the average customer (down) and mobility becomes more elitist. It would not be a good thing in a country with a fleet of passenger cars that is almost 14 years old on average, neither for the environment itself, nor obviously for Road Safety.
The joint statement ends with this warning: “Either we act accordingly or we inevitably face an unprecedented fall in the entire industry at the Spanish level with the serious economic and social consequences that it would imply”. The message is there, for those who want to see it and can make decisions about it.