European Market Recovery Pulling Spain Along

MADRID – Auto makers here generated a combined revenue of E38.5 billion ($55.3 billion) for 2010, up10.8% from 2009 levels, according data from ANFAC, the local manufacturers’ association.

But the gain didn’t come as a result of the domestic market, which remains mired in a slump.

Audi Q3 recently launched at SEAT’s Martorell plant.

“The earnings increase was due to the recovery of export activity to other European countries,” says ANFAC Director Luis Valero.

However, most of the revenue gain may have had as much to do with increasing vehicle margins as demand improves, as with a rise in overall volume. The ANFAC data shows exports accounted for 87.1% of Spain’s vehicle production last year, only 0.3 points higher than in 2009.

The demand recovery in many European countries – Italy, Portugal and Spain, among the exceptions – enabled some local auto makers to increase production during the first half of 2010, and additional hikes in schedules are planned for the remainder of the year.

Nissan Motor Spain recently announced it would boost production of the X83 van by 3,100 units beyond initial schedules. The model is marketed as the Nissan Primastar, Renault Trafic and Opel/Vauxhall Vivaro.

Renault Spain has signaled a 20% increase in engine and gearbox output at plants in Valladolid and Seville, respectively. Both facilities are supplying more than 20 Renault-Nissan Alliance assembly plants in 15 countries, as well as some Daimler operations as a result of the recent cooperative agreement forged between the three auto makers.

Renault also will launch production of the new Twizy 2-seat electric car here later this year.

Volkswagen has revised the production slate at its Landaben plant near Pamplona. Originally scheduled to build 348,126 cars this year, it now is expected to assemble 362,128. VW produces the Polo small car at Landaben and opened a second assembly line there in May, adding 500 jobs.

Earlier this year, SEAT launched production of the Audi Q3 on a new assembly line at its Martorell plant, near Barcelona, investing E330 million ($474 million) and adding 700 jobs there for the program.

Ford has announced an E812 million ($1.2 billion) investment in its Almussafes factory, near Valencia, to produce the next-generation Kuga cross/utility vehicle and Transit Connect light-commercial vehicle.

PSA Peugeot Citroen is preparing its Vigo plant, in northwest Spain to build two new cars for the Peugeot and Citroen brands. It also is considering production of two new electric cars.

But not everyone is celebrating.

Irisbus, the coach and bus brand of Fiat’s Iveco commercial-vehicle operation, has announced it will close its factory in Barcelona July 31. The plant currently employs 100 people.

Meanwhile, Daimler has a labor hurdle to clear at its Vitoria plant, where the Mercedes-Benz Vito and Viano vans are built. The company is seeking a 10% salary reduction in exchange for a commitment to build the next-generation models – codenamed VS20 – at the facility.

If the Vitoria plant unions do not accept the new labor framework, VS20 production will be assigned to the Ludwigsfelde, Germany, facility, near Berlin, and the Spanish factory probably would be closed.