MADRID -- The Spanish government unveiled a 3.75 billion-euro ($4.2 billion) stimulus program on Monday for the country’s automotive industry.
Almost 70 percent will be invested in the sector’s “value chain,” with other parts going to renewing existing car fleets and electrifying public transport, Prime Minister Pedro Sanchez said in a speech in Madrid.
Funds also will go to replace existing cars older than 10 years for newer models and more energy-efficient vehicles.
Spain’s auto industry accounts for about 10 percent of gross domestic product, with car production comprising a fifth of the country’s exports and directly employing some 600,000 workers.
Like tourism, Spain's automotive sector has been hammered by the coronavirus pandemic, which led the government to impose one of the world’s strictest lockdowns. The economy could shrink as much as 15 percent in 2020, according to worse-case scenario estimates by the Bank of Spain.
The first installment of the stimulus, 1.535 billion euros, will be disbursed in 2020, Sanchez said.
Although it does not have any domestic automakers, large foreign players including Volkswagen Group, PSA Group, Renault Group and Ford Motor have plants in the country. CIE Automotive and Gestamp, both listed in Madrid, are among the largest Spanish car component suppliers.
Spain is Europe’s second-biggest car producer after Germany, but the local industry is suffering. Nissan has announced plans to close an an iconic plant it owns near Barcelona as part of a corporate restructuring.
