motor manufacture

motor manufacture
   The motor-vehicle industry has been a leading sector in Spanish industrial development in the second half of the twentieth century, with carmanufacturing capacity around two million units a year. In addition, there is a significant truck, bus and motor-cycle industry together with parts and ancillary industries, all of which make a substantial contribution to employment, total industrial production and exports. Exports of vehicles represented over one-fifth of the value of all merchandise exports in the mid-1990s, 80 percent of cars produced in Spain were exported and many of the leading export companies in Spain were motor-vehicle manufacturers. Foreign multinational companies dominate the sector, controlling all car, truck and bus assembly and most other major motor-vehicle and component manufacturers. Their investment transformed a backward industry oriented to the domestic market into a modern internationally integrated industry incorporating the latest production techniques. It also left the industry exposed to the changing strategic considerations of these multinational companies headquartered outside Spain with their own corporate goals.
   Following the Civil War, the government adopted a policy of import substitution, directing output to the protected domestic market. Two public companies were established in the 1940s, the bus and truck manufacturer ENASA (Empresa Nacional de Autocamiones) in 1946 and the car manufacturer Seat (Sociedad Española de Automóviles de Turismo) in 1949, both in Barcelona. During the 1950s and 1960s the domestic industry expanded and some foreign manufacturers secured production facilities (including Citroën and Fasa-Renault). The emphasis in motor vehicle production shifted towards exports from the 1970s onwards. Relatively low labour costs, a protected and expanding domestic market, access to component suppliers and government assistance attracted further European investment and the giant American and Japanese manufacturers Ford, General Motors, Honda, Nissan, Suzuki and Yamaha. Membership of the European Community in 1986 provided a further impetus to inward investment and opened the way for greater integration into the European motorvehicle industry, though as a concession to ease the transition to full competition, Spain was allowed, for three years after accession, to levy a special tariff of 17.4 percent on cars imported from other EC countries.
   During the first half of the 1990s international competition for new investment increased and the domestic market contracted from its peak in the late 1980s. All manufacturers sought ways of further reducing costs and increasing efficiency, frequently through shedding labour. Component supply was reorganized with global component system manufacturers emerging with their own supply chains. Component supply complexes developed around the major vehicle assembly plants in response to "just-in-time" or "immediate" delivery systems and closer co-operation between assemblers and suppliers in design and quality assurance.
   Many towns across Spain have experienced the beneficial effects of the industry in the form of direct employment, income and business development. These towns include the centres of vehicle assembly such as Barcelona, Madrid, Linares, Palencia, Pamplona, Valencia, Valladolid, Vigo and Zaragoza, plus those towns dependent on motor-vehicle component and ancillary industries. Apart from Madrid, Valencia and a few important locations in the south, the industry is concentrated in the north. All these communities must face the challenge of ongoing restructuring in a global industry subject to rapid technological change.
   See also: motor car
   Further reading
   - Hawkesworth, R. (1981) "The Rise of Spain's Automobile Industry", National Westminster Bank Review, February: 37–48 (deals with the development of the industry).
   - Lagendijk, A. (1994) "The Impact of Internationalisation and Rationalisation of Production on the Spanish Automobile Industry, 1950–90", Environment and Planning A, 26, 11: 321–43 (covers the re-organization of the industry).
   —— (1995) " The Impact of Foreign Investments in the Automobile Industry on Local Economic Development in Spain", Area, 27, 4: 335–46 (deals with the impact of the industry on local development).
   - Lagendijk, A. and van der Knaap, B. (1995) "The Impact of Internationalisation on the Spatial Structure of Automobile Production in Spain", Tijdschrift voor economische en sociale geografie, 86, 5: 426–42 (deals with the impact of industrialization of the industry on the geography of motor vehicle production in Spain).
   - Salmon, K. (1995) The Modern Spanish Economy, 2nd edn, London: Cassell Publishers, pp. 192– 202 (a good synthesis of the motor-vehicle industry in Spain).

Encyclopedia of contemporary Spanish culture. 2013.

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