Published on Monday, June 6, 2022

Spain | Why are automobile sales down?

The automobile sector offers a useful overview of many of the general trends that we are seeing in the economy. First of all, it provides a good example of the impact that society's changing preferences are having and, secondly, it demonstrates how supply-side constraints are limiting growth.

Key points

  • Key points:
  • Added to this, as with the rest of the Spanish economy, is that an increase in demand in the current scenario will lead to a persistent rise in prices.
  • Automobile sales are around 40% down on 2019. What is particularly unusual about this decline is that it comes at a time when employment figures have risen above pre-pandemic levels, and attractive financing conditions are available in the market.
  • Part of this fall is due to structural factors, like the uncertainty surrounding the transition to electric vehicles or changing preferences associated with the COVID-19 pandemic.
  • However, the main reason for the slowdown appears to be a shortage of vehicles. BBVA Research estimates that 50% of the drop in sales since 2019 can be explained by this factor.
  • What seems most likely, is that in an environment of growing demand and supply side constraints, dealers' margins will continue to increase, while sales remain at levels close to those of 2021.

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