Powertrain Uncertainty Slows Car Sales in Spain

MADRID – Spanish car sales slowed 6.9% to 316,911 in the first quarter, confirming automakers’ fears that 2019 may be a year of stagnation in demand after five years of growth.

Some within the industry contend the sales slowdown is a consequence of the uncertainty over the type of mobility the Spanish government is promoting.

Despite European Commission rules forbidding member countries to adopt a specific powertrain technology, central and some regional and municipal Spanish governments have made clear their preference for the electric alternative, demonizing diesel and even gasoline engines.

Laura Ros, general manager of Volkswagen Spain, said in late March, “Car sales in Spain will not recover until the Spanish government sends a message of tranquility that allows the buyers to renew their vehicles without having to think about prohibitions of certain technologies.”

José-Vicente de los Mozos, head of the Renault-Nissan-Mitsubishi Alliance in Spain and president of ANFAC, the main Spanish association of automakers, also accuses the Spanish government of being unfriendly toward the auto industry. To maintain jobs and be awarded with new models to assemble, Spain needs a strong market and to get it, he says, all ministers involved in the industry must make clear there are no risks in buying vehicles with combustion engines.

The recent decline in car sales must be put into perspective. Last year closed with a total of 1,334,085 units registered, the highest figure since 2007 and 7.5% more than 2017.

But the implementation of the new WLTP test to control carbon-dioxide emissions during the homologation of various car models altered the course of car sales during 2018. Between 50% and 60% of car models marketed in Spain during 2018 were to be impacted by the future WLTP test, increasing prices an average 5% due to the Spanish registration tax, which is based on CO2 emissions.

As a result, many dealers opted for the “self-registration” of the affected vehicles in stock, with the intention of selling them as used cars.

With such a massive registration needing to be performed before the Sept. 1, 2018 deadline for registering vehicles not complying with the WLTP test, August 2018 new- and used-car sales soared 48.7% over same-month 2017, reaching 107,692 units – the industry’s best August in 10 years – and pushing sales during the first eight months of 2018 to 973,542 units, up 14.6% year-over-year.

The sales surge preceding the Sept. 1 registration deadline turned out to be unwarranted. The government announced Aug. 31 it was delaying by one year the deadline for vehicles in dealers’ stocks to comply with the WLTP standards, angering automakers and dealers alike.