The Spanish automotive components industry is suffering the consequences of the crisis that is devastating the automotive sector in Europe, with a sharp drop in demand for cars and a general slowdown in the development of electric vehicles due to the cut in public aid in some countries and the rise of Chinese brands.
The figures leave no room for doubt. After 2023 in which the companies grouped in the Spanish Association of Automotive Suppliers (Sernauto), which represents more than 80% of the sector, increased turnover by 10.3% and surpassed 40,000 million euros for the first time (41,529 million), the evolution of the first ten months of 2024 points to a contraction of around 2%according to the organization’s provisional estimates. This is a significant change in trend, especially because it is still happening in an inflationary environment.
The automobile industry is facing a global crisis that has a more pronounced impact in Europe. Not in vain, until September, The demand for electric vehicles in the Old Continent was 5.8% lower to the comparable in 2023, according to data from the European Automobile Manufacturers Association (ACEA). For cars as a whole, the evolution shows a slight advance of 0.6%.
In the case of Spain the situation is more favorable. Vehicle sales reached 911,503 units between January and November, 5.1% more than in the same period in 2023, according to statistics from Anfac (Spanish Association of Automobile and Truck Manufacturers). Registrations of electrified vehicles, for their part, increased by just 0.5%, with a decreasing trend (in November they fell 7.8%).
Faced with this contraction of activity in the European Union, many of the main Spanish automotive suppliers, whose largest business flow is in exports, are further deteriorating their marginsalready damaged in the context of the Covid-19 pandemic and lack of supply of microchips.
They show greater resilience than their European competitors largely due to their geographical diversification, with Asia as the main support, and they distance themselves, for now, from the massive layoffs presented by the largest European powers, Germany and France. Badges like the Germans Schaeffler, ZF and Continental and the galas Michelin, Valeo and Forvia have announced adjustments in recent months that affect thousands of workers. The cuts extend to other countries such as Italy and Portugal.
The difficulties that the Spanish automotive components industry is going through are evident in the numbers made public by references such as Gestamp and Antolin. The first decreased its turnover by 1.6% in the first nine months of the year, to 8,926.8 million euros. A fall motivated largely by the decline in demand in Western Europe. This is its first market, with more than a third of sales, and it recorded a revenue cut of 8.6%. The geographic exposure of the group that controls the Riberas family makes it possible to mitigate this impact with improvements in activity in Asia (7.9%), Eastern Europe (6.5%) and the United States, Canada and Mexico (3.4%).
The hit suffered is greater in terms of profitability, also influenced by the currency exchange rate. Gestamp’s gross operating result (ebitda) decreased by 7.5%, to 935.5 million. In this case, only Asia presents growth of 20.6%, which partially cushions the reductions in Western Europe (-14.3%), the United States, Canada and Mexico (-26.1%), Argentina, Brazil , Paraguay, Uruguay and Bolivia (-16.7%) and Eastern Europe (-3%). The company achieved a net profit of 127 million until September, which implies a decrease of 43.5% compared to a year before.
The forecast for 2025 is that the joint turnover of the sector in Spain will rise between 1% and 1.5%
Meanwhile, the Burgos company Antolin reduced its sales by 10.2%, to 3,174.7 million, and has revised downwards its forecasts for the year to 4,200 million. Although it improved its ebitda by 6.6%, the group incurred losses of 12.8 million euros in the first nine months of the year, compared to the 8.1 million it earned in the same period of 2023. The improvement in the result operation allowed it to boost its EBITDA margin to 8.4% half a point more than in September 2023 thanks to the Transformation Plan that is committed to efficiency and greater cost control.
Although it is a limited and specific issue, Antolin has been forced to dismissal of the 108 workers at the plant located in the Arazuri-Orkoien industrial estate (Navarra)which has supplied parts to Volkswagen Navarra for more than two decades and will close at the beginning of 2025. This measure results from the manufacturer’s decision not to award the supply of components to this factory.
Antolin replicates Gestamp’s geographic trends in terms of revenue. Thus, in Europe sales fell 12%, to 1,546 million, although they were affected by the transfer of Ebegassing and the end of project production in the United Kingdom. While, In North America they contracted 14%, to 1,038 million, and in Asia they contracted 4%, to 589 million, with India leading the way.
“We need a Country Plan for the automobile like Germany and France have”
Precisely the Indian market is where CIE Automotive, the third largest Spanish supplier by turnover, has a consolidated presence and where it foresees the greatest growth opportunities in the face of the electric vehicle crisis in Europe. Not in vain, The Basque company presents the best data in the sector with a growth in its net profit of 2.1% in the first nine months of the year, up to 258.8 million. An advance that the firm justifies in its “flexible and diversified” business model, which takes advantage of opportunities in different geographies to maximize performance.
CIE Automotive increased sales by 1.3%, to 3,012 million, and EBITDA by 4.2%, to 559.2 million. With this, the EBITDA margin rose from 18% a year ago to 18.6%. By region, at constant exchange rates, in India and Brazil – its third and fourth markets – it achieved sales increases of 9% (double that of the sector) and 16.3% (more than triple that of the sector), respectively. . In Europe, its first market, faced with an average sectoral fall of 5%, resisted with an increase in income of 0.1%and in North America, its second market, it obtained an improvement of 0.8%, thus surpassing the sector (-0.8%). On the contrary, in China, its fifth market, its turnover decreased by 10.2%, compared to the sectoral increase of 2%.
Ficosa ERTE
Aside from Antolin’s Employment Regulation File (ERE) in Navarra, Spanish manufacturers are weathering the crisis without making adjustments to their workforces in Spain. However, the drop in demand is having repercussions in other countries where they produce. This is the case of the Catalan company Ficosa, which works for the main continental groups, such as Volkswagen and Renault. Thus, it has applied a Temporary Employment Regulation File (ERTE) in the subsidiaries it has in Italy and Portugal that will affect, respectively, 240 and 700 workers, as elEconomista.es reported this week.
José Portilla, general director of Sernauto, explains to this newspaper that Spanish automotive component companies are dealing with the production crisis “with very constrained margins”, affected by the rise in labor costs, energy prices and of an ever-increasing tax level. Likewise, they are slowing down productive and R&D&I investments.” In 2023, the volume allocated to this last item amounted to 1,273 million euros, 3.1% of turnover and more than triple that of the whole With these measures they seek to “survive in the short and medium term”, but they are negative for the future development and competitiveness of this industry. Spain is today the fourth largest automotive supplier in Europe – the eighth in vehicle manufacturing. -.
Portilla emphasizes that the massive employment adjustments that are being announced in other European countries “are not reaching Spain at the moment.” In fact, the estimate for the whole of 2024 is that the volume of workers in the automotive supplier industry, cwith 204,000 direct jobs and 333,000 indirect jobsbe maintained. Looking ahead to 2025, the expectation is that it will continue at similar levels or even grow around 1%.
The activity of the Spanish sector has fallen 2 points between January and October, according to Portilla, although he is cautious about how the year will end. “It’s not going to be good,” he warns, especially when we’re coming off years of growth of between 5% and 11%. The forecast for 2025 is that joint billing will increase between 1% and 1.5%as long as there are no unexpected events.
Beyond Antolín in Navarra, Portilla has no visibility on possible new plant closures. “It will depend on the level of demand from our clients,” he says. 60% of the industry’s turnover in Spain (25,140 million in 2023) comes from exports, which is why it emphasizes the importance of “promoting competitiveness” to combat the push of markets like Morocco, with the consequent risk of relocations .
On the opposite side, Portilla points out how The arrival of Chinese manufacturers in Spain will represent an opportunity for growth in the medium term. Likewise, it trusts in the development of new electric vehicles from 2026 by manufacturers such as Volkswagen, Seat and Peugeot.
Despite the “demonstrated resilience” of the sector, Portilla emphasizes the difficulties that SMEs are going through, especially due to “the problems of access to bank financing.” For this reason, Sernauto insists that Public Administrations must facilitate unconventional financing, through, for example, mutual guarantee companies.
The Industry Law
Portilla endorses the demands of the Alliance for the Competitiveness of the Spanish Industry, of which Sernauto is a member. This organization has stressed this week on the need to include a permanent financing fund in the new Law of Industry and Strategic Autonomy, whose preliminary draft was approved on Tuesday by the council of ministers. Although the industry values the initiative positively, it considers that the current text lacks concrete measures to guarantee the necessary reindustrialization process in the country. Along these lines, they urge the availability of a fund endowed with 2,500 million euros annually that would serve to promote the circular economy, the decarbonization of the industry and to give continuity to initiatives such as PERTE (Strategic Projects for Economic Recovery and Transformation).
In Portilla’s opinion, the Law “has good music, but greater precision is needed in the objectives.” “We need a Country Plan for the automobile like Germany and France have”demand. Likewise, in order to improve the competitiveness of European industry, he urges Europe to “get serious about trying not to hyperregulate and to simplify administrative management.”
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