In 2022, the Basque Country registered the fifth largest drop in the State in the sale of new cars, a drop that confirms the trend of recent years.
Car sales have traditionally been one of the best gauges for verifying social optimism in the progress of an economy. But, for a decade now, the market seems to be following a different trajectory than the rest of the vectors of consumption and, thus, this important segment of the industry did not perceive the general reactivation of family spending that occurred last year. In fact, passenger car registrations in the Basque Country fell by 11.2% in 2022 compared to the previous year, the fifth largest drop in the State. However, the fall was milder than in 2021, when the decrease was 18.2% compared to 2020, a year marked by the outbreak of the pandemic. Jon Lekue, representative of the Faconauto employers’ association in Euskadi, is confident that the market will pick up throughout this year and return to normality. “We foresee that the first half of the year will continue to be lukewarm and that the situation will improve afterwards, with an increase of 5%,” says the general director of Autonervión.
Household consumption picked up broadly last year, but new car sales continue to slow.
On a general level it has been quite a difficult year, and for our sector as well, due to the consequences of the war in Ukraine, high inflation and the rise in interest rates. This has caused consumer confidence to have been much lower than in previous years. There has also been a drop in manufacturers’ production capacity and, lastly, a transport crisis that has resulted in fewer cars being available at dealerships. All this translates into levels of activity well below those of before the pandemic. A new stimulus plan seems urgent to us, similar to the previous ones at the Basque or state level, for the scrapping of vehicles. We have a fleet of cars that is two years older than the European average, and the older it is, the more difficult it will be to reduce polluting emissions.
Last year there was a supply crisis from Asia and the new Registration Tax came into force.
How Did These Circumstances Affect?
The supply problems were not only from China or Taiwan, but also from other countries. For example, a piece of plastic used by certain manufacturers for the switch of an electric window was brought from the Ukraine, and after the war it has not been possible. Regarding the tax framework, we believe that the car is heavily taxed and we are committed to a reduction in VAT. In addition to the registration tax, there are others, such as the circulation tax, and there is a tax charge that retracts the purchase. On the other hand, the price of fuel rose last year, and whenever that circumstance occurs, car sales experience a decline.
In recent years there has been a cultural change in mobility, with young people opting for alternative formulas to owning a car. It worries them?
It is a circumstance with many nuances, because it depends on the size of the city in which you live, the orogafía, the climate… It is not that young people do not want to buy a car; it’s that they can’t afford it. There is a youth unemployment problem. It is true that these new mobility alternatives exist, but we have to see in which direction they will go. We, for example, already offer pay-as-you-go services to customers.
Are the legislative changes in Europe to promote the electric car causing confusion among those interested? In the end, it seems that whoever wants to buy a vehicle does not know whether to buy a combustion one now or wait for electric ones to be more widely developed.
There are still customers with doubts, but we insist that any customer who buys a car today, of any type, will not be prohibited from using it. Most of the cars will be able to continue accessing the big cities despite the restrictions in certain areas. In the Basque Country, 43% of all vehicles sold last year were gasoline, followed by hybrids, with 29%, and diesel, with 14%.
Is it possible to meet the deadlines that Brussels has set for the total replacement of the combustion vehicle with an electric one?
It is unfeasible that the only technology that will be used is the electric vehicle. Europe agreed to ban the sale of combustion cars from 2035 and circulation from 2050, but the Internal Market commissioner also said that the possibility of delaying those dates would be assessed by activating a review clause in 2026. It is mathematically impossible that these premises are met, because with the level of registrations, it is not enough to renew the entire current combustion park. We must continue betting on technological neutrality, net carbon dioxide emissions and the renovation of the park.
How Does This Whole Situation Affect The Maintenance of Employment?
In Euskadi, dealers represent 3.2% of GDP and employ nearly 6,300 people. It is a very important proportion, because we have a powerful auxiliary industry. But if we don’t sell cars, fewer will be made.
This article is originally published on noticiasdegipuzkoa.eus