Trade Balance Tips in Spanish Auto Industry’s Favor

MADRID – The Spanish automotive industry ended 2012 with a positive trade balance of nearly €10.6 billion ($13.8 billion), up 6.7% from prior-year, thanks to a surplus of more than €14 billion ($18.3 billion) in revenues from vehicle exports compared with imports, according to a report by ANFAC Research, a branch of the association of auto makers operating in the country.

“The evolution of the balance, with the export rate declining much slower than the import rate, has changed greatly over the (2008-2012) crisis period, generating a trade surplus loosely tripling (that of) the previous five years,” says Mario Armero, ANFAC executive vice president.

By contrast, the value of imported auto parts exceeded that of exports by €3.5 billion-€4.5 billion ($4.6 billion-$5.9 billion) in the 5-year period. This can be explained largely by the relative stability of production levels and the associated demand for imported components, accompanied by the steady decline in domestic vehicle sales.

Despite the net imports of components, vehicle exports more than offset that deficit, generating a €36 billion ($47 billion) positive balance in 2008-2012.

After four consecutive quarters of contraction, vehicle exports reached €8.8 billion ($11.5 billion) in first-quarter 2013, up 3.4% compared with year-ago, while imports declined 9.4%, resulting in a positive balance of €3 billion ($3.9 billion).

This growth came despite production and export activity depressed in March due to the Easter holiday and some model changeovers, and expansion likely will continue in the coming months, according to ANFAC.

The share of Spanish-built vehicles in major European markets (Germany, France, the U.K. and Italy) generally was constant in 2008-2011, averaging 13.4% and close to the 13.8% average in 2004-2007.

“Within the traditional export destinations, the Spanish car share remained particularly strong in Germany, with a growth of 8.3% between 2006 and 2012, despite the German market falling by 10.0% in that period,” notes Armero.

In first-quarter 2013, Spanish-built vehicles’ share of the domestic market approached 38%, almost 12 percentage points more than in 2006, due largely to the economic difficulties that spurred consumer interest in locally made, relatively inexpensive cars.

Spanish auto makers, meanwhile, made significant efforts in 2012 to diversify exports, resulting in 27% of shipments going to countries outside the 15 core European Union members in first-quarter 2013, the highest proportion to date.

According to ANFAC, that diversification effort is beginning to be felt in non-traditional markets such as Mexico and Russia, both destinations for 1.7% of Spanish exports, and 1.4% in Australia.

“The low motorization rate of these countries and the good fit of the Spanish cars offered in their markets open very interesting future possibilities for Spanish factories,” Armero says.