Spain Under Pressure

June 2006 | Industry Forecast

Spain's car-manufacturing industry accounts for a significant proportion of GDP (just over 7%, according to our calculations). The country became an attractive place to locate operations in the 1980s, especially following entry to the European Union (EU) in 1986, as the regulatory certainties that membership entailed were compounded by the additional positive effect of relatively competitive labour costs. Including indirect employment (and the components industry), the car industry is responsible for over 10% of the country's employment. Over the medium term, car production should remain reasonably stable, despite the attractions to vehicle assemblers of moving operations to the lower-wage assembly

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