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Government of Spain strengthens automotive sector through Plan with provision of 3.75 billion euros

Moncloa Palace, Madrid, Monday 15 June 2020

At the event to sign the Plan at Moncloa Palace, the attendees also included Nadia Calviño, Third Vice-President of the Government and Minister for Economic Affairs and Digital Transformation; Teresa Ribera, Fourth Vice-President of the Government and Minister for Ecological Transition and Demographic Challenge; José Luis Ábalos, Minister for Transport, Mobility and Urban Agenda; Reyes Maroto, Minister for Industry, Trade and Tourism; Pedro Duque, Minister for Science and Innovation; Agustín Martín, Secretary-General of the State Federation of Workers' Committees' Industries; Pedro Hojas, Secretary-General of the Federation of General Transport Union of Industry, Construction and Agriculture; Raúl Palacios, President of GANVAM; Arturo Pérez de Lucía, Director-General of AEDIVE; Gerardo Pérez, President of FACONAUTO; María Helena Antolín, President of SERNAUTO and José Vicente de los Mozos, President of ANFAC.

The "Plan to Boost the Value Chain of the Automotive Industry towards Sustainable and Connected Mobility" includes 20 measures of an economic, tax, regulatory, logistics, competitiveness, vocational training and skills, sustainable public procurement and strategic planning nature that provide cover for the entire value chain of the industry. This Plan also promotes safe and sustainable mobility in a context of changes associated with decarbonisation and the digital transformation.

The Plan has a budget of 3.75 billion euros, and includes measures with a short-term impact, which will be introduced and implemented in 2020, and medium-term strategic measures, which will be introduced and implemented in 2021, and which could be financed with the support of European recovery funds.

In the current process of economic and social reconstruction, this Plan will enable the rapid recovery of a strategic industry for the Spanish economy, which accounts for 10% of GDP, 19% of all exports, and employs 650,000 people directly and 2 million workers including indirect employment. The Plan will also contribute to alleviate the adverse effects of COVID-19 on the competitiveness of the automotive sector in Spain and provide the support necessary to ensure the continuity and leadership of the industry through its adaptation to the challenges identified and to enhancing sustainability.

"The question is to do whatever is necessary to cushion the tremendous losses of the sector in 2020 while laying the foundations for tomorrow's industry - an industry that will come out stronger through electrification and digitalisation and which will contribute to our country's progress down the path of the just ecological transition", highlighted the President of the Government.

Renewal of vehicle fleet

Pool Moncloa/Fernando CalvoThe vehicle fleet in Spain has an average age of 12.7 years, while the market for vehicles over the age of 20 has grown by 18% in recent years. Furthermore, European emissions regulations are becoming increasingly stricter while new vehicles, in addition to having better extras, gradually include emissions improvements. Accordingly, and with the aim of speeding up the reduction in emissions of the Spanish vehicle fleet, encouraging the replacement of old and polluting vehicles by cleaner vehicles and boosting the competitiveness of companies and independent contractors in our country based on savings in fuel consumption through the renewal of the vehicle fleet, the Plan includes measures to renew the vehicle fleet for the sum of 450 million euros.

In addition, it introduces the 2020 edition of the Programme to Boost Electric and Sustainable Mobility (MOVES Plan), with a 100-million euros provision. This is a plan geared towards the acquisition of alternative energy vehicles (including electric vehicles and heavy gas natural powered goods transport vehicles), to the rollout of infrastructure to charge electric vehicles, to shared electric bicycle systems, and to measures for efficient mobility.

It is estimated that for each 1 million euros allocated to the MOVES Plan, this will generate between 3.6 and 4.1 million additional euros to national GDP and increase tax revenue by between 1.5 and 1.6 million euros. This programme has a 100-million euro provision and it will be jointly managed with the regional governments according to their jurisdictional powers.

In addition, the Fleet Renewal Programme will be introduced, with a 250-million euro provision. This measure seeks to replace older vehicles by cleaner and safer vehicles, through a renewal programme that includes environmental criteria. Applying the criterion of technological neutrality, this programme incentivises the replacement of polluting vehicles on the roads with vehicles with zero or low emissions. The Programme will apply to both saloon cars and to light commercial vehicles, and to heavy industrial vehicles and buses.

The vehicle fleet renewal also includes the renewal of the Central Government's fleet of vehicles by vehicles with the ZERO emissions sticker and the rollout of infrastructure to recharge electric vehicles.

Investments and regulatory reforms to boost competitiveness

Pool Moncloa/Fernando CalvoThe Plan to Boost the Value Chain of the Automotive Industry towards Sustainable and Connected Mobility seeks to attract and mobilise the investments necessary to adapt and steer industry towards new market demands and sustainability goals, the award of the manufacture of new electric and hydrogen models and the development of new business models such that job creation is sustainable over time and resilient to future challenges, to which end a framework is necessary to accompany the sector, as well as to improve logistics with the aim of enhancing competitiveness, with several measures.

The conditions of the line of loans under the Reindustrialisation Plan (Reindus) are adapted, modifying downwards the interest rates of loans (0.1% for SMEs and 0.19% for large companies in the first year), and extending the concepts eligible for investment, and the retroactive nature of projects initiated prior to 1 March 2020. For the rounds of proposals in 2021 and 2022, a fund will be set up to manage this programme, that will provide funding to sector projects more in line with its needs and more flexibly.

Furthermore, a specific sub-tranche of the ICO-COVID line of guarantees will be established to finance the renewal of the fleet of vehicles for professional use. This sub-tranche is aimed at independent contractors and companies, and will facilitate the renewal of commercial and industrial vehicles, buses and coaches, with guarantees of up to 80%.

The broad value chain of the sector, from the manufacture of components to final distribution, depends on logistics as a driver of competitiveness. Accordingly, a series of measures is also introduced geared towards improving the competitiveness of transport allocated to both the sector supply chain and to the export of goods manufactured in Spain, to road, railway and sea transport.

Research, development and innovation for new challenges

The continuity and competitiveness of the automotive industry in Spain depends to a great extent on its capacity to innovate, in order to position itself to adequately address new challenges. For this reason, the Plan includes a budgetary item of 415 million euros in measures designed for industrial innovation in renewable H2, specific industrial innovation projects in sustainable mobility, improvements in connectivity and support for the provision of very high-speed connections and the public procurement of innovation for mobility infrastructures.

Taxation to boost competitiveness

In the context of the automotive industry, the Plan includes certain tax incentives for the sum of 100 million euros to supplement the investment and regulatory measures to boost electric and sustainable mobility. These measures include fiscal support for investments made in relation to electric, sustainable and connected mobility and to the enabling of the partial use of the surplus posted by local authorities for the efficient renewal of their vehicle fleets. In addition, the Plan provides for the introduction of a comprehensive transport taxation reform.

Measures in the field of vocational training and skills

Vocational training and skills are basic elements to strengthen human capital, employability and competitiveness, as well as to comply with the goal of protecting, accompanying and training workers, adapting profiles to needs and preventing them from remaining outside change processes in sectors associated with sustainable mobility. The need to maintain jobs in the sector requires the implementation of a mass plan to develop vocational skills, in line with a decisive strategy towards the ecological transition. For this reason, the Plan provides for 95 million euros to generate new skilled labour and to adapt existing labour to new demands.

A specific plan will be implemented to re-train and update the qualifications of sector workers, as will a campaign on procedures to accredit the professional skills acquired through work experience in the automotive sector, a training plan for new technologies, digitisation and means of sustainable transport and the comprehensive planning of training in management skills, digitalisation and the generation of innovative ecosystems in the automotive industry.

Commitment of automotive industry

Within the framework of the introduction of this Plan, the Spanish automotive industry, specifically the vehicle manufacture sector, has set the goal of enhancing the decarbonisation of the vehicle fleet and of attracting new electric and electrified models for their manufacture in Spain. To achieve this, investment efforts will be prioritised such that in 2030 annual production is attained of at least 700,000 to 800,000 electrified vehicles (pure electric and plug-in) together with the necessary components, which will allow the annual quota of 12% of European market penetration to be maintained.

The industry will also work on developing public charging infrastructures, will boost shared mobility, will drive industry 4.0 and develop programmes to attract qualified talent, among other measures. The aim is to promote an environment that contributes to attracting the necessary investment to develop mobility ecosystems that can amount to 310 billion euros in turnover in Spain by 2040, maintaining the importance of the industrial sector of vehicle and component manufacturing in the international environment, whilst supporting the development of new business lines that must go hand in hand with this ecosystem.

Non official translation