Spain Government Mobilises €1.05 Bn For The Renewal Of The Vehicle Fleet

sector auto spain

The Spanish government is launching a recovery plan to help the sectors most affected by the coronavirus crisis. These include the tourism and automotive industries, which account for 12% and 10% respectively of the country’s GDP.

Prime Minister Pedro Sanchez has announced a plan to help the automotive sector. The Plan for the Promotion of the Automotive Industry Value Chain, as it has been called, has a budget of 3.750 billion euros. It could be approved during today’s ordinary cabinet meeting and includes: 300 million euros for the renewal of the public fleet, recharging infrastructures, adaptation of cities to new mobility needs and electrification of transport; 300 million euros for the renewal of the fleet towards a more sustainable and efficient one; 415 million euros for R+D+i; 2.690 billion euros for investment in industry and 95 million for professional training.

The government will earmark 1.050 billion euros for the renewal of the fleet of vehicles in Spain. Of this total, 550 million euros will take the form of direct aid for the purchase of public and private vehicles of all technologies. The remaining 500 million euros will be ICO lines for the purchase of commercial and industrial vehicles. Specifically, the aid will prioritize the most efficient models, so that the purchase of cars with ‘Zero’ label by individuals or the self-employed will be subsidised with 4,000 euros. If you buy a model ‘Eco’ you will receive between 600 and 1,000 euros and between 400 and 800 euros for a model with a label ‘C’ (combustion).

This aid is already effective from today, so that all users who buy a vehicle from that date and meet the requirements will be eligible retroactively, although the regulatory development has not been published.

The plan also aims to promote research and development in the sector and to improve the financing conditions for companies. In addition, Sánchez announced a new tax system to boost the sector’s competitiveness, which includes a reduction in VAT and changes to the registration tax.

In the case of tourism, one of the sectors suffering most from the impact of the coronavirus, the opening up of borders will be brought forward to 21 June. This will allow tourists to enter Spain from the Schengen area without being subject to the quarantine period. Portugal is an exception, as it has requested a postponement. On Thursday, a plan to boost the sector will be presented, of which the details or the measures included are not yet known. The borders for non-EU tourists will open from 1 July.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.