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Spain: Automobile Assembly
Country Study > Chapter 3 > The Economy > Industry > Manufacturing > Automobile Assembly

AUTOMOBILE ASSEMBLY


The greatest success story of Spain's economic expansion was the rise of its large motor vehicle assembly industry. Although it started up only in 1950, by the early 1970s it had become the country's second most important industry in the manufacturing sector, and in the mid-1980s it was the most important producer of exports. Automobile production reached 38,000 units in 1960 and increased sixfold between 1965 and 1976. By the 1980s, Spain manufactured an average of well over a million cars per year, and in 1987 it produced 1.4 million vehicles. A good part of this production was exported. In 1985, for example, about 800,000 vehicles, out of a total of 1.2 million, went abroad. By 1986 Spain's three largest exporters were Ford Espana, General Motors Espana, and SEAT. In addition to the manufacture of personal automobiles, Spain produced substantial numbers of commercial vehicles. In the mid-1980s, commercial vehicle production ranged from 130,000 to 300,000 units per year, and annual tractor production levels stood at about 16,000 units.

Spain's motor vehicle industry was located in many parts of the country. SEAT began its operations in Barcelona, while General Motors Espana was located in the Zaragoza and Cadiz areas, Ford Espana was near Valencia, and a number of companies were placed around Madrid.

Subsidiaries of foreign firms dominated the automobile industry. In 1986, Fabricacion de Automoviles, SA (FASA Renault), with about 20,000 employees, was Spain's largest automotive company, as measured by revenues. SEAT -- at one time a Spanish firm, but, since the mid-1980s, owned by Volkswagen -- ranked second, followed by Ford Espana, General Motors Espana, and Citröen Hispania. During the late 1970s and the early 1980s, both Ford and General Motors became major domestic automobile manufacturers. Other foreign firms involved in the motor vehicle industry included Peugeot, Mercedes Benz, Land Rover, and Japanese firms such as Nissan, Suzuki, and Yamaha.

In the late 1980s, Japanese investors sought to use Spain as a bridgehead to penetrate the West European market and to follow the example of Ford Espana and General Motors Espana, which exported about 75 percent of their output. Not all firms worked from this premise, however. Renault and Peugeot-Talbot began operations with the intention of catering to a highly protected Spanish home market.

The reviving economy of the second half of the 1980s was reflected by a strong growth in domestic demand, including that for consumer durables. Sales of new cars rose from 629,000 units in 1985 to 860,875 in 1987, an increase of about 37 percent. In accordance with the EC accession agreement, automobile imports were entering Spain in increasing numbers, and they were securing a large share of the market. In 1987, approximately 211,000 foreign-made cars were sold in Spain, an increase of 101 percent over 1986; imported automobiles increased their market share from 16 percent in 1986 to 25 percent in 1987.

Despite this increase in the sale of foreign cars, Spain's motor vehicle industry remained strong. Investments had been made in industrial robots in order to enhance productivity, and in the late 1980s labor costs were highly competitive with those of foreign producers. In late 1988, the Economist reported that a Spanish auto worker earned about half as much as his West German counterpart. Observers regarded Spain as well positioned to emerge as the EC's market leader in small car production.

Data as of December 1988




Last Updated: December 1988


Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Spain was first published in 1988. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on Factba.se.

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