As per a 2005 report, Spanish automotive industry is a key sector of Spanish economy. It accounts for around 7% of the nations industrial employment and around 26% of its exports. Spanish automobile industry is ranked high in European production ranking, both vehicle wise and component wise.

Spain automotive industry overview
Spain possesses an excellent labor climate. Spanish automotive industry is highly dependent on its trade relations with European union. This industry is particularly famous for production of industrial vehicles followed by that of passenger vehicles. Around 85% of Spain’s automotive exports are meant for EU. Multinational groups who possess the capacity of conducting high-class research and development activities mostly own Spanish automobile manufacturing units. Productivity levels of Spanish automotive production plants are also quite high, ranked among Europe’s top ten. A major manufacturer from Spain is Seat.

Passenger car sales were estimated to face a decline in 2007 as per an industry report. The second half of 2007 recorded a major decline in sales of new cars as the popular small car segment suffered a major setback. As per data provided by Anfac (an association of Spanish vehicle manufacturers) in November 2007 registrations for new cars fell by 5.9% year-on-year. It stood at 125,199 units. This decline in sales of H207 has been mostly attributed to rising cost of living and hike in mortgage payments in 2007. Spanish automotive industry was on a high in 2007 due to Volkswagen’s proposed transfer of production of Polo passenger cars from Bratislava, Slovakia to Brussels and Spain in early 2008. It may be noted that adherence to particle emission reduction norm, as per European directive for passenger cars were to impose an additional cost burden on Spanish automotive industry. This is predicted to affect business prospects of particularly medium to low priced vehicles. (It has been observed in this regard that diesel vehicles offer a lower level of CO2 emissions).