Spain’s Falling Car Sales Cause Dealer Reduction

MADRID – Despite the government’s subsidy plan to scrap older vehicles in place of new models, sales in the Spanish car market fell 13.4% in 2012 and continued their slide in January, down 9.6% compared with year-ago.

As a consequence, dealer networks recorded €22.1 billion ($28.9 billion) in sales, a 6.5% drop from like-2011, and 2,734 dealers were forced to close their business, says Faconauto, the Spanish federation of official auto dealers associations.

About 5,735 employees lost their jobs in those distribution networks, leaving 130,409 workers, or 4% less than prior-year. Dealers have had to adjust their retail outlets to a market that has shrunk to half the size of just five years ago.

PSA closed 48 of its Spanish dealerships belonging to Peugeot (21) and Citroen (27) distribution networks.

SEAT, the Spanish auto maker owned by the Volkswagen group, closed only 8% of its distribution network (14 dealers), a short reduction considering its sales here plummeted 25.4% last year.

Volkswagen closed seven stores from 118 in 2011, Audi cut nine dealers and Skoda one.

General Motors’ Opel brand, which saw new-car sales fall 14.9% last year, dropped 20 dealers, or 12% of its existing network. Ford proved the exception, adding two new distribution points, bringing its total to 145 despite a 21.4% decline in sales.

Nissan, which says it cannot adequately manage the Spanish market with a distribution network with less than 160 sales points, maintained its 83 dealers, backed by 132 more sales and aftermarket outlets.

Luxury brands have been the most negatively affected, with car sales last year tumbling 20%. In addition to Audi’s 9-dealer reduction, Mercedes, down 8.6% to 21,271 deliveries last year, has closed 17 dealer points.

BMW in January announced it was cutting 30 of its 83 dealers, after sales dropped 9.3% in 2012. Analysts say the auto maker may adopt the strategy it follows in Germany of establishing a sole dealer for each of Spain’s major car markets.