Spain Could Take a Beating as French Government Wants Car Manufacturing Back in France

IT would appear that one of the first major losses of industrial production in Spain will come in the vehicle production industry.

Japanese newspaper Nikkei suggests that when it reveals its latest results on May 28, Nissan will announce the closure of its loss-making factory in Barcelona and the transfer of production to France.

Last year the Spanish arm produced some 55,000 commercial vehicles and small lorries, but has been working to only a small percentage of capacity for some time.

Concurrent to this, the French Minister of Economy and Finance, Bruno Le Maire has called for French automobile manufacturers to repatriate production back to France if they want to receive financial support from the government.

Two of Europe’s largest car manufacturers are PSA (Citroen and Peugeot) and Renault which is 15 per cent owned by the French government.

Citroen, Opel, Peugeot and Renault vehicles are currently manufactured in Spain and in 2019, nearly 1.5 million vehicles were produced for the French companies by their Spanish plants, making the country the second largest manufacturer in Europe after Germany and the eighth largest in the world.

It would be uneconomic to move some of the production from Spain to France if no French factory has the tooling available to take over the work, but with France looking to move into an all-electric vehicle scenario by 2030, any production for new models is more likely to take place in France than see a new plant for Spain.

The European Union has made it much easier for companies to have subsidiaries in different member states, but the parlous financial situation that many countries find themselves in following the coronavirus, Covid-19 pandemic means that more countries will take the view that ‘charity begins at home’!