A roadmap for reviving the automotive sector
Both vehicle sales and production volumes have fallen during the epidemic. Now, time has come for companies, manufacturers, administrations, sellers and customers to join forces in order to overcome this situation of a vital sector for the economy of both the Basque Country and Spain. As a leader in cold rolled strip, Arania’s role involves guiding the recovery of the sector from the base of the value chain: steel.
The automotive sector plays a strategic role in the Basque, Spanish and European economies. According to Forbes, in 2019 it accounted for 10% of the national GDP and 19% of total Spanish exports. This activity employs 650,000 people directly, with more than two million jobs linked to the sector: the automobile provides work for 9% of the active population, which makes it one of the most important sectors of the economy.
As a leading company in precision cold rolled steel stripping, Arania is keeping a close eye on the evolution of the automotive sector after the crisis generated by the COVID-19. No wonder, as almost 75% of the production activity of rolled strip is focused on satisfying the demand of car manufacturers.
Recently, different action plans have been launched to reactivate the Spanish car market at state level, with a strong focus on the promotion of electric vehicles. For example, the Ministry of Industry recently announced the deployment of an official Booster Plan for the automotive industry value chain with a total budget of 3,750 million euros, distributed as follows over 2020 and the following years.
- Renewal of the vehicle fleet towards a more modern and efficient pool: 550 million euros.
- Investments and regulatory changes to boost competitiveness and sustainability: 2,690 million euros.
- Research, development and innovation: 415 million euros.
- Taxation adapted to boost the sector’s competitiveness.
- Optimisation and renewal of vocational training and qualifications.
In the case of the Basque Country, the Spanish Government will grant an aid of 800 euros for each vehicle, and the same amount will be granted by the dealers by means of an obligatory price reduction. On the other hand, in the Basque Country this contribution will be increased to 2,000 euros. Therefore, the user has the possibility of accumulating a grant of up to 3,600 euros per vehicle purchased. However, the condition will be to automatically scrap the old vehicle.
We are now facing a unique opportunity to bet on the future, where companies, administrations, vendors and customers must row in the same direction to assist in the recovery of a key sector for our economy.
- Spain is the 2nd largest car manufacturer in Europe, only behind Germany, and the 8th worldwide.
- It is the leading European manufacturer of commercial vehicles.
- Thousands of companies depend to a greater or lesser extent on the automotive sector, including producers of high-quality steel designed exclusively for the automotive industry such as Arania, manufacturers of components, supply chain equipment, research and development, electronics, electrical infrastructure…
- 82% of the vehicles and 50% of the automotive electrical equipment manufactured in Spain are exported to more than 100 countries.