Exports help Spain's parts sector weather COVID crisis

Spain's export-dependent automotive suppliers benefited from both a rebound in Europe and diversified exports to Asia, Africa and North America to help them weather the coronavirus crisis and outpace the EU market.

The total value of exports from January to November 2020 dropped 15 percent to 16.4 billion euros, while the overall EU auto market declined by 24 percent for all of 2020, the export initiative Autoparts From Spain said. 

Spain's automotive suppliers saw a surge in exports in the month of November, following a 4.1 percent increase in October, with the value rising by 29 percent to 2.2 billion euros for the month.

About 58 percent of Spanish suppliers' output is exported.  

The outlook for 2021 is mixed, with an expected increase in exports based on improved economic forecasts, but exports are still expected to be below 2019 levels, said Maria Begona Llamazares, the platform coordinator at Autoparts From Spain and international markets manager at Sernauto, the Spanish automotive suppliers' trade group.

"Our 2021 forecast is based on the expected rebound in global auto markets, but the effects of the recession in some economies will affect vehicle sales and aftermarket performance," she said, pointing to stronger domestic demand in Southeast Asia and an expected growth of 11 percent in European vehicle sales as positive factors.

The top export markets in the EU for the month included France, up to 100 percent, Hungary (+ 43 percent), Italy (+32 percent), Czech Republic (+22 percent) and Germany (+14 percent). By volume, France, Germany, Portugal and Italy are the biggest European export destinations. 

"The good evolution of European markets has allowed the sector to trend up in monthly exports," Autoparts From Spain said. Overall, the value of exports to the EU was up by 36 percent in the month. 

But growth was also strong in some of the biggest auto producing countries outside of Europe in November. China led the way with 51 percent increase, followed by South Korea (+34 percent), Morocco (+20 percent) and Brazil (+14 percent). That was enough to offset drops such as Japan, down 2.8 percent, or Mexico (-5.2 percent).

The coronavirus crisis affected the market not only by pushing down production of new vehicles, but also by suppressing demand for spare parts, the initiative said. 

"One of our distinguishing features in the automotive supplier sector in Spain is the export nature of our business, which has been severely affected by the impact of COVID-19 on regional and global trade," Autoparts From Spain said.  

The initiative said the pandemic has accelerated the sector's transition toward a carbon-free economy as well as the trends of digitization, sustainability and connectivity. "The COVID crisis has pushed this process forward faster in the sector,” the group said. 

For the January-November period, sales to Germany fell by 17 percent to 2.83 billion euros, French sales fell 7.2 percent to 2.95 billion euros and Italian sales fell 12 percent to 807 million euros.  

The drop was especially steep in the UK ahead of the Brexit trade agreement deadline, as export sales fell by 21 percent to 1.1 billion euros. 

Diverging results from the world's auto markets reflected the uneven pace of coronavirus shutdowns and recoveries. South Korea, where factories largely stayed up, was up 17 percent for the period, while China grew by 11 percent. 

The U.S. market fared relatively well, with exports from Spanish suppliers falling 6.3 percent to 866 million euros. 

But there were sharper drops in other major markets: Morocco, where Stellantis and Renault Group build cars for export, was down 12 percent to 772 million euros. Japan sales fell by 41 percent; South Africa was down 28 percent; and exports to Mexico fell by 27 percent.  

Exports to Turkey fell by 16 percent and to Russia by 13 percent, the initiative said.