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Spain 2020 | INDUSTRY | FOCUS

Decades after the SEAT 600 car heralded the Spanish economic miracle, the automobile industry is still driving Spain's economy forward.

Spain's automotive industry began in 1904 with the establishment Hispano-Suiza, now defunct. The company introduced the world to several pre-war classic automobiles, rolling out its last new model in 1938. However, the company's legacy lived on in the Spanish car industry, which would experience a renaissance in 1950 with the establishment of Sociedad Española de Automóviles de Turismo (SEAT).

SEAT's main claim to fame is SEAT 600, manufactured between 1957 and 1973. It is recognized to this day by motoring enthusiasts all over the world as one of the most iconic automotive products from Spain.
The mass production of SEAT 600—just under 800,000 units were built—contributed to the economic boom that Spain enjoyed throughout the 1960s and early 1970s.
Pedants may point out that the relatively inexpensive SEAT 600 model was license-built on a preexisting FIAT platform, but SEAT also fully developed some of its more expensive models before being sold to the German automotive giant, the Volkswagen Group, in 1986.
As of 2019, SEAT is fully owned by its German parent company, though it still remains the only Spanish automaker capable of designing and manufacturing new models in-house. Today, the automotive industry has turned into one of the pillars of the Spanish economy, accounting for up to 8-9% of the GDP. In 2017, Spain ranked as the eighth largest automaker in the world and the second-largest in Europe, with an output of over 2.29 million units.
Approximately 80% of the vehicles are earmarked for export each year, and the majority of them are assembled in plants owned by international automakers. Nevertheless, the required parts are largely manufactured through a sophisticated supply chain that has taken root in Spain.
In addition to a network of auto-component suppliers, which encourages foreign companies to set up shop in Spain, labor costs are lower in Spain than in northern Europe. This has incentivized companies such as Volkswagen to expand their presence in the country.
With a daily output of 2,300-2,400 vehicles, Volkswagen Group's SEAT plant in Martorell, Barcelona, is the largest assembly facility in Spain, but there are other international players that have moved their production to the country, too.
Ford runs a body and assembly plant as well as an engine plant in Valencia. It is Ford's largest plant in the EU and “one of the most advanced, flexible and productive auto plants in the world," according to the American parent company.
Directly employing over 7,500 people, the plant currently assembles some of Ford's newer models, such as Ford Mondeo, Ford S-Max, and Ford Galaxy, with its daily output touching 2,000 units per day.
Ford and Volkswagen's activities in Spain are so intertwined with the country's automobile industry that related businesses such as car part suppliers have sprung to life in the vicinity of their assembly facilities.
Other major automotive companies with a strong presence in the country include Nissan (in Avila and Barcelona), Mercedes-Benz (in Vitoria), Groupe PSA (in Galicia), and Renault (in Valladolid and Palencia). Although the mass production of electric vehicles has not still taken off in Spain, the government has introduced incentives to kick-start the shift from combustion engines to electric ones. The MOVE initiative, for instance, was launched in 2018 to subsidize the sales of electric vehicles (EV) and the installation of charging points. The limited number of charging points is one of the bottlenecks frustrating the widespread adoption of EVs, but charging infrastructure is developing in Spain. Energy companies Endesa and Iberdrola are competing to add to Spain's limited charging stations, with Iberdrola promising to launch 200 fast chargers by the end of 2019.
All three of the most popular electric vehicles in Spain's market—Renault ZOE, Nissan LEAF, and Mitsubishi Outlander—are assembled elsewhere. Given Spain's sophisticated automotive industry, the launching of EV assembly lines in Spain could be effective in encouraging the local communities to shift to electric engines.