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Spain 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
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