Spain’s car industry is back on track (but could be derailed by Brexit)

Spain's car industry is back on track (but could be derailed by Brexit)
Cars on the production line at Seat. Archive Photo: AFP
Spain's production of automobiles climbed 5.6 percent in 2016 to 2.89 million vehicles, returning to levels only seen just before a devastating economic crisis, the Anfac carmaker association said on Tuesday.

But it warned that “the devaluation of certain currencies and the emergence of protectionist phenomena in various countries that Spain exports to” had impacted production in the second half of the year, pointing for instance to Britain post-Brexit.

Domestic sales also slowed during this period after state subsidies to buy new, less-polluting cars ended in July.   

Exports account for more than 84 percent of Spanish production, and did well in 2016, rising seven percent to 2.43 million units – more than in 2007 before the crisis erupted, according to Anfac.

But the association said that some countries had shown signs of weariness, such as Britain, one of the biggest markets for Spanish-made vehicles, as the pound has dropped in value since it voted to leave the European Union.   

Anfac said exports to Britain had been dropping around 16 percent monthly since September.

“It's also the case in Algeria, where protectionist measures have contributed to exports from Spain dropping 72 percent, with nearly 20,000 less units sent to the country,” the association said.   

All big European carmakers have factories in Spain, where the auto industry accounts for more than 10 percent of economic output.    

The sector suffered its worst moment in 2008-09 as the global credit crunch hurt demand for new cars across Europe.    

But production has since picked up and it is now one of the motors of the nation's economic recovery along with tourism and agriculture and food.

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