Automotive suppliers in Spain: Prepared for the future

The times we are living in are full of uncertainty and change, both on a personal level in our daily realities and undoubtedly on an economic and business level, as a result of the impact of COVID-19 on our lives. This reality is not foreign to the Spanish automotive sector. In these months, we have seen the entire supply chain come to a halt as a result of the measures taken to manage the crisis and pandemic worldwide. Eight months have passed since the start of the halt, and the sector is gradually and unevenly recovering depending on the markets and customers we serve, but we are trying to move forward energetically and decisively and minimize as much as possible the losses expected in terms of production volume and turnover by the end of this year. In the case of automotive suppliers, an estimated revenue decline of between 20 and 30 percent is expected, figures that have never been seen in the more than six decades of history and presence of automotive suppliers in Spain.

But not everything is negative. Even before COVID-19, the sector was in an intense transformation process, moving towards a more decarbonized economy, addressing the challenges of digitalization, connectivity, automation, and all this under the premise of sustainability. This health crisis has only accelerated the transformation process through a geographical shift of some vehicle components and systems to strengthen supply chains in the face of potential future threats. Additionally, today's consumer is inclined to prefer the use of private vehicles over public transport for safety reasons. These facts remind us that despite being in an environment of uncertainty, we must act quickly, intelligently, and creatively to remain a competitive industry. Considering that suppliers contribute about 75% of the vehicle's value, it can be easily deduced that the fact that this industry is competitive represents one of the most important factors driving the transformation process.

We are prepared for the future, and the future is now

We have a strong and stable ecosystem of more than a thousand automotive suppliers and world-class technology centers, which exert a strong attraction on vehicle manufacturers worldwide. For several years, the Spanish automotive supplier sector has been working on innovation initiatives such as alternative propulsion and fuel systems, more autonomous mobility, and advanced manufacturing. Autonomous driving is unthinkable without new technologies such as high-performance computing, cybersecurity, artificial intelligence, sensors to monitor the vehicle environment, and technologies for precise positioning. To this end, it is essential to maintain and increase the investments of automotive suppliers in R&D&I (in 2019, more than 4% of their turnover was invested, which is three times the industrial average), to focus on a sustainable Industry 4.0 where no one is left behind, and to train and retrain employees so that they can fulfill the functions that digitalization demands from us.

We must act now!

Clean mobility is another identity feature to which the entire value chain feels committed. As the white paper "Contribution of the Automotive Supplier Industry to Sustainable Development" indicates, there are many initiatives and projects in which suppliers are working towards achieving the goals of the United Nations' Agenda 2030 for sustainable development. For example, EU projects to boost the circular economy are supported, as well as the Circular Car Initiative, which was launched at the World Economic Forum and officially started in Davos in 2020.

We must not forget that we need to act. Let us get to work now so that we do not fall behind as a country and as a continent. In a sector as highly competitive as ours, the game is played not only here but also beyond our borders, and we must assert our leadership position as the second largest vehicle manufacturer in Europe (the first in commercial vehicles) and the ninth in the world. Through the digital platform Autoparts from Spain, we promote the enormous potential of the Spanish component offering Made in Spain. All companies involved in this initiative are committed to the decarbonization goals set by the European Union, as well as the high standards of quality, technology, and innovation demanded by vehicle manufacturers and aftermarket suppliers around the world.

What does this mean?

We live in times that require everyone to act sincerely and united. Only in this way can we tackle this immense challenge, as we have overcome others in the history of Spain and Europe. Now, more than ever, we must demonstrate that we can advance through this turbulent process with trust and continuous work, consensus, and public-private collaboration. We have the foundations. It is time to build in the present the future we see with ambition and full of possibilities.