Global Mainstream Car Market | Spain: Automotive Market Landscape

GLOBAL MAINSTREAM CAR MARKET | SPAIN: AUTOMOTIVE MARKET LANDSCAPE

Source: Gasgoo（China Automotive news）

POLICIES RELATED TO THE SPANISH AUTOMOTIVE INDUSTRY

The Spanish automotive industry is undergoing a structural transformation towards new energy and intelligent connectivity. Although this transformation may bring short-term challenges, in the long run, it will significantly enhance the global competitiveness of the Spanish automotive industry.

Related planning for the automotive industry:

In 2021, Spain passed its first National Energy and Climate Integrated Plan (PNIEC) Transition Act, with the goal of achieving carbon neutrality by 2050. Last year, the revised draft of the bill further proposed a 32% reduction in greenhouse gas emissions from 1990 levels, exceeding the previously set target of 23%.

In the field of renewable energy, the plan is to achieve a total installed capacity of 214GW in the power sector by 2030, including 160GW of renewable energy and 22GW of various forms of energy storage.

Among them, the PERTE VEC policy is closely related to electric vehicles. The goal of this policy is to put 5 million electric vehicles on the roads by 2030. At the same time, establish an ecosystem for developing and manufacturing electric connected vehicles in the country, including battery manufacturing, automotive industry worker qualification training, etc.

In 2021-2023, for the first phase of PERTE VEC, the Spanish government actually invested 2.87 billion euros and added 250 million euros in transfer payments and an additional 1 billion euros in loans, totaling 4.12 billion euros.

Since last year, Spain has entered the second phase of implementing this policy by releasing investment plans to support the industrial value chain of electric and connected vehicles, their systems, subsystems, and components, as well as certain auxiliary infrastructure systems required for deployment. The Spanish government announced that PERTE VEC II will provide a grant of 530 million euros and a loan of 100 million euros.

Under policy stimulus and the availability of cheap green energy resources, some multinational car companies are developing the new energy vehicle industry in Spain. For example, Chery Automobile is building an electric vehicle factory here, Volkswagen Group, Farview Power and others are building battery factories, Desay SV is building an intelligent factory, Stellantis Group, Ford Motor and others are planning to produce electric vehicles, etc.

In the second phase, a total of 26 projects from 21 companies were approved, including Far East Technology, Stellantis Group, SEAT, Ford, Renault and other automotive companies. Among them, Yuanjing Power will receive a subsidy of 200 million euros and a loan of 100 million euros, making it the biggest beneficiary of the project. The introduction and update of the above policies are actually aimed at ensuring that Spain continues to maintain its position as the second largest automobile producer in the European Union in 2030, 2040, and 2050. And with the aim of transforming Spain into a European hub for electric transportation, increasing the contribution of the automotive industry to GDP to 15%.

IMPORT TARIFFS:

As a member state of the European Union, Spain maintains consistent import tariff policies with the EU. Non EU countries are generally subject to a 10% tariff on imported passenger cars. The tariffs on automotive parts are relatively low, mostly between 3% and 4.5%. It is worth noting that in addition to tariffs, imported cars are also subject to a 21% value-added tax.

Thanks to the free trade agreements signed between the European Union and multiple countries and regions, the import tariffs on Spanish cars have shown a differentiated pattern. According to the Economic Partnership Agreement signed between the European Union and Japan in 2018, import tariffs on automobiles will gradually be reduced to zero within 8 years. The free trade agreement with South Korea allows Korean cars to enjoy zero tariff treatment. In addition, British cars also enjoy zero tariffs due to trade and cooperation agreements, but must comply with rules of origin.

The situation is quite different for electric vehicles produced in China. Spain follows the EU's common external tariff policy and supports the imposition of tariffs. Starting from July 1, 2024, the European Union has imposed temporary tariffs of up to 37.6% on imported Chinese made electric vehicles, which will undoubtedly pose a challenge to the expansion of Chinese electric vehicle companies in the Spanish market.

Main brands and competitive situation in the automotive market.

The Spanish automotive market presents a diversified pattern and the competition is becoming increasingly fierce. Although Spain has its own local brand SEAT, it is now owned by Volkswagen Group in Germany. Currently, European brands dominate the Spanish market, occupying approximately 70% of the market share. Japanese and Korean brands closely follow, accounting for about 20%. In addition, Chinese brands have gradually opened up in the area in recent years.

As the second largest automobile producer in Europe, Spain's production is mainly contributed by European brands such as Volkswagen Group, Stellantis Group, and Renault Group, accounting for over 60%. It is worth mentioning that some car companies are known for their high flexibility in their factories in Spain, which can simultaneously produce multiple models of different brands. For example, SEAT Spain factory also produces Audi products.

In 2023, the number of new car registrations in Spain reached 949000, a year-on-year increase of 16.7%. In terms of power types, although gasoline vehicles still dominate, the registration of diesel vehicles has decreased by 15%, resulting in an overall market share of internal combustion engines dropping to 53%. At the same time, the market share of electric vehicles has risen to 12%, highlighting the trend of new energy.

In the brand competition landscape, Toyota surpassed Volkswagen with sales of 86000 vehicles last year, becoming the best-selling brand in Spain. Following closely behind are SEAT, Volkswagen, and Peugeot, all with sales exceeding 60000 units. It is worth noting that Chinese brands are also emerging in fierce competition.

SAIC MG ZS, with its affordable price (starting at 14700 euros for gasoline version and 24000 euros for pure electric version after subsidies), has entered the fourth place in Spain's 2023 model sales in less than a year since its launch, with annual sales approaching 20000 units. In December 2023, MG ZS became the monthly model sales champion in Spain with 2600 units.

In the field of electric vehicles, Spain sold 110000 units last year. Tesla Model Y and Model 3 dominate the market. But Chinese brand MG also ranks among the top ten electric vehicle sales in Spain in 2023. Entering 2024, another Chinese brand under Chery's brand, Oumengda, showed explosive growth, with a year-on-year increase of 759 times in May, setting a new local sales record.

However, compared to EU countries such as Germany and France, Spain's electrification process is relatively slow, with electric vehicles accounting for only 12% of total new car registrations in 2023, far below the European average of 20%. Some argue that the pressure on demand for electric vehicles may affect Spain's achievement of emission reduction targets, and this challenge deserves attention.